Southern District of California

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

NEWS RELEASE SUMMARY – January 21, 2021

SAN DIEGO – Kirill Victorovich Firsov, a Russian citizen, pleaded guilty in federal court today to a cybercrime, admitting that he was 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.

According to the plea agreement, Firsov was well-compensated as the administrator of DEER.IO, an online platform which catered to cyber criminals. DEER.IO was a Russian-based platform that allowed criminals to set up cyber storefronts and sell illegal products or services. DEER.IO started operations as of at least October 2013, and, as of March 2020, had approximately 3,000 shops with sales exceeding $17 million. 

DEER.IO offered a turnkey online storefront design and hosting platform, from which cybercriminals could advertise and sell their products, such as harvested credentials, hacked servers, and services, such as assistance performing a panoply of cyber hacking activities.  As detailed above, a criminal could simply “sign up,” “configure wallets to receive funds,” “upload products,” and “get money.”

Once the criminal paid to set up their store on the DEER.IO platform, the site then guided the newly-minted shop owner through an automated set-up to upload the products and services on offer through the shop and configure crypto-currency wallets to collect payments for the purchased products and/or services. A cybercriminal who wanted to sell contraband or offer criminal services through DEER.IO could purchase a storefront directly from the DEER.IO website for 800 Rubles (approximately $12.50) per month. The monthly fee was payable by Bitcoin or a variety of online Russian payment methods such as WebMoney, a Russian based money transfer system similar to PayPal.

The shop owner had the option to purchase a storefront name linked to DEER.IO or one its subdomains, like DEER.ST, DEER.IS or DEER.EE (e.g., https://[SHOP NAME].deer.io, such as ONLYFB.DEER.IO, SHIKISHOP.DEER.IO and SELLACCSS.DEER.IS), or a custom name (e.g., https://[SHOP NAME], such as SQLBAZAR.SHOP and ISIS.RENTS.HOUSE), which directed the prospective buyer to the storefront infrastructure hosted on DEER.IO.

A cybercriminal who wanted to purchase from storefronts on the DEER.IO website could use a web browser to navigate to the DEER.IO domain, which contained a search function that allowed individuals to search a catalog for specific items or browse popular storefronts containing items to purchase. Any purchases were conducted using cryptocurrency, such as Bitcoin, or through Russian-based money transfer systems. For example, as reflected above, a cybercriminal could purchase stolen Uber accounts with associated credit card information from SHIKISHOP.DEER.IO.  To make these purchases, the prospective buyer just needed to click on the cart on the right-hand side of the screen.

An initial scan through DEER.IO storefronts revealed thousands of compromised accounts posted for sale, including Personally Identifiable Information (PII) files containing full U.S. Social Security Numbers, dates of birth and victim addresses. Many of these victims were located in Europe and the United States, including victims in San Diego.

Firsov is set for sentencing before Judge Cynthia Bashant on April 12, 2021.

“This was one-stop shopping for criminals,” said U.S. Attorney Robert Brewer. “Cybercrime is one of the most pervasive threats facing our country. Data is being stolen and sold on the Dark Web every day, and we are devoting significant resources to combatting this serious problem.” Brewer commended the excellent work of Assistant U.S. Attorney Alexandra F. Foster and the FBI agents on this case.

“The internet allows cybercriminals and our adversaries to attack Americans in new and unexpected ways.  Therefore, the FBI is constantly pivoting to staying ahead of the evolving nature of cyber threats,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office.  “The seizure of the DEER.IO website and conviction of Firsov is an example of the FBI cyber program’s investigative prowess and jurisdictional reach in order to identify, locate and bring to justice anyone who attempts to profit from harm to U.S. persons, businesses and infrastructure.”

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:     29                      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. Attorneys Joseph Green (619) 546-6955 and Alexandra F. Foster (619) 546-6735

NEWS RELEASE SUMMARY – January 21, 2021

SAN DIEGO – Cameraman Theodore Wilfred Gyi, aka Teddy, pleaded guilty today to conspiring with the operators of the adult websites GirlsDoPorn and GirlsDoToys to fraudulently coerce young women to appear in sex videos.

Gyi pleaded guilty before U.S. Magistrate Judge Jill L. Burkhardt to Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371. Gyi, the second of six defendants to plead guilty, admitted that he worked from 2015 to 2017 as a camera operator for the GirlsDoPorn and GirlsDoToys adult websites, which were run by co-defendants Michael James Pratt and Matthew Isaac Wolfe.

Gyi admitted in his plea agreement that at the start of his employment he was instructed by Matthew Wolfe that, if any of the young female models asked, he should tell them that the videos would not be posted on the internet. Gyi admitted that over the course of his employment, he became aware that Matthew Wolfe and Michael Pratt were posting many of the sex videos that he filmed on GirlsDoPorn and GirlsDoToys, where they were publicly available to all willing purchasers. Nonetheless, Gyi continued to lie and personally assured the young women he filmed that the videos would not be posted publicly. To help convince them that the sex videos would not be posted on the internet, Gyi told some that he believed on-line pornography was “cheap.” Gyi also admitted that he was aware that Pratt, Wolfe, co-defendant Ruben Andre Garcia, and others were falsely assuring the women that if they agreed to appear in a video, the video would not be posted on the internet. Garcia pled guilty on December 17, 2020, to one count of Sex Trafficking by Force, Fraud and Coercion, and one count of Conspiracy to Sex Trafficking by Force, Fraud, and Coercion.

Gyi admitted that he filmed approximately 120 videos for GirlsDoPorn and GirlsDoToys.

“There is a high price to be paid by those who fraudulently exploit young women and forever alter their lives for profit,” said U.S. Attorney Robert Brewer. “Our prosecutors will leave no stone unturned in our effort to stop the tragedy of human trafficking and bring justice and restorative resources to its victims.”  U.S. Attorney Brewer 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.

FBI Special Agent in Charge Suzanne Turner said, “Today’s plea underscores the FBI’s commitment to aggressively pursuing anyone who seeks to profit from the exploitation of young women.  Theodore Gyi’s actions, in support of the GirlsDoPorn conspiracy, caused significant emotional pain and distress to the victims they targeted. This conviction is another step forward in the pursuit of justice for sex trafficking victims and the FBI’s role in holding perpetrators accountable for their crimes.”

Gyi is scheduled to be sentenced by U.S. District Judge Janis L. Sammartino on April 9, 2021 at 9 a.m. The next hearing in the ongoing case is January 22, 2021 at 2:00 p.m.

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

The FBI is offering a reward of up to $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                                    

Theodore Wilfred Gyi                                    Age:    42                    Aliso Viejo, 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

Valorie Moser                                                 Age:    37                    San Diego, CA

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.

 

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

NEWS RELEASE SUMMARY – January 13, 2021

SAN DIEGO – U.S. Attorney Robert Brewer and San Diego County District Attorney Summer Stephan said today their offices will not tolerate violence during inauguration-related protests and will work closely with federal, state, and local partners to aggressively pursue those involved in criminal activity at such events in San Diego and Imperial counties.

“We are issuing the strongest warning possible to anyone who is planning violence in connection with the inauguration,” Brewer said. “If you repeat the despicable behavior we saw at the Capitol last week, and if you disrespect our great democracy by bringing harm to people or property in a display of hatred and rage, the consequences will be swift and strong. You will be found, and you will be charged. Don’t let that become part of your story.”

“I want to be clear that my office will prosecute those who break state laws when they choose violence, hate, assault or vandalism to harm our community—including attacks on fellow citizens and peace officers,” DA Stephan said. “I call on our community members to work hand in hand with law enforcement to keep our neighborhoods safe and to honor our democracy by reporting suspicious activity. If you see something, say something.”

Both U.S. Attorney Brewer and DA Stephan condemned the January 6 attack on the U.S. Capitol:

“Protesting is an inalienable right recognized by the U.S. Constitution; rioting is a crime,” DA Stephan said. “The insurrection that occurred in the U.S. Capitol last week was a despicable, anti-American attack on the democratic fabric of our nation. It’s a wakeup call that locally, we must work together to keep our community safe, including alerting law enforcement to the threat of violence.”

“The attack on Congress was a shameful and reprehensible affront to our democracy. Our Constitution protects the rights of free speech and assembly, but it does not protect mob violence, threats to harm public officials, assaults on law enforcement officers, or damage to government buildings,” said Brewer.

Anyone witnessing a crime in progress or immediate danger to the public should call 911. If you have witnessed unlawful violent actions, have any information about unlawful violent actions, or have information about the Capitol violence case, the FBI urges you to submit any information, photos, or videos that could be relevant at fbi.gov/USCapitol. You may also call ‪1-800-CALL-FBI (1-‪800-225-5324) to verbally report tips and/or information.  If you do not have an attachment but have information to provide, you can also submit your information at tips.fbi.gov.

The manager of the San Diego Home Cooking restaurant chain pleaded guilty today to employment tax fraud, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Robert S. Brewer Jr. for the Southern District of California.

According to court documents and statements made in court, Aleksandar Sreckovic was a manager for San Diego Home Cooking, a restaurant group with over 110 employees and five restaurants in the San Diego area, including Café 56 & Bar and Mission Valley Café & Bar in San Diego, Lake Murray Café in La Mesa, Lakeside Café in Lakeside, and Centre City Café in Escondido. Sreckovic had significant control over the finances of the company and had a duty to account for and pay over the employment taxes on behalf of the company’s employees to the IRS.

In November 2014, Sreckovic directed an outside payroll company to stop making employment-tax payments. From the last quarter of 2014 through 2017, Sreckovic did not file employment tax returns nor pay employment taxes for San Diego Home Cooking. In total, Sreckovic caused a tax loss of over $1.5 million. Instead of paying employment taxes, Sreckovic paid other creditors and his own personal expenses. Sreckovic has agreed to pay over $2.2 million in restitution, interest, and penalties to the IRS.

U.S. District Judge Cathy Ann Bencivengo scheduled sentencing for April 2, 2021. At sentencing, Sreckovic faces a maximum sentence of five years in prison. He also faces a period of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Brewer commended the special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Andrew Galvin and Trial Attorney Matthew Hoffman, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.

Kelly Thornton (619) 546-9726

NEWS RELEASE SUMMARY – January 11, 2021

SAN DIEGO – U.S. Attorney Robert Brewer issued the following statement:

On January 6, 2021, a mob attacked the United States Capitol.  This was a shameful and reprehensible affront to our democracy, and I condemn it in the strongest possible way. Our Constitution protects the rights of free speech and assembly, but it does not protect mob violence, threats to harm public officials, assaults on law enforcement officers, or damage to government buildings. Those who engage in these behaviors commit serious crimes, and our criminal justice system will hold them accountable. 

We will work closely with our law enforcement partners, including the U.S. Attorney’s Office in the District of Columbia, to ensure that any individuals from San Diego or Imperial counties who were involved in criminal activity at the U.S. Capitol are brought to justice.  If we determine that federal charges should be brought in this District, we will aggressively prosecute all such matters.

Anyone with information regarding the events of January 6 should contact the Federal Bureau of Investigation: https://tips.fbi.gov/digitalmedia/aad18481a3e8f02.

Assistant U. S. Attorney Rebecca Church (619) 546-7721

NEWS RELEASE SUMMARY – January 8, 2021

SAN DIEGO - The U.S. Attorney’s Office for the Southern District of California is proud to honor the courageous life of Betty Marshall Graydon, the first woman Assistant U.S. Attorney in San Diego, by dedicating a conference room to her memory.

Ms. Graydon joined the U.S. Attorney’s Office in Los Angeles in 1938. She became the sole Assistant U.S. Attorney in San Diego in 1944, prosecuting criminal cases and defending the United States in civil suits until she was elevated to U.S. Commissioner in 1952.

“It is an honor to participate in this important event celebrating the life of Betty Marshall Graydon, a person of great significance to the history of the Southern District of California,” said U.S. Attorney Robert Brewer. “She had a brilliant and trailblazing career, and she represents the important role that women have played in the development and success of this office.” Brewer commended Assistant U.S. Attorney Rebecca Church for leading the effort to honor Ms. Graydon.

Graydon was known as a tenacious advocate who devoted her career to the pursuit of justice. Although she had an impactful life, her story has not been celebrated by this office until now. To learn more about Ms. Graydon’s trailblazing life, please watch conference room dedication tribute video available at https://youtu.be/_dT2UaYg4Xc. With this memorial, we hope that Ms. Graydon’s career will continue to inspire the dedicated public servants in this office, and the larger San Diego community, in the future.

The U.S. Attorney’s Office for the Southern District of California extends gratitude to the Hon. Cynthia Bashant, Hon. Barbara Major, Hon. Nita Stormes, Hon. Karen Crawford, Hon. Jill Burkhardt, and Yahariah Aristy, President of Lawyers Club, for contributing to the video, Ray Christensen for preparing the tribute, Elaine Lawrence, Executive Director of Lawyers Club, and Betty Boone, co-chair of Lawyers Club's History and Archives committee, for generously providing access to Lawyers Club’s research and resources regarding Ms. Graydon’s life and career, and to Federal Women’s Program, Special Emphasis Program Managers, AUSAs Rebecca Church, Katie McGrath, and Meghan Heesch.

Read

HERE

Assistant U. S. Attorney Stephen H. Wong (619) 546-9464 and Jennifer McCullough 546-8773    

NEWS RELEASE SUMMARY – December 21, 2020

SAN DIEGO – Zion Market and its former general manager, Timothy Moon, pleaded guilty in federal court today to knowingly hiring undocumented employees who were not authorized to work in the United States.

U.S. Magistrate Judge Michael S. Berg ordered Zion Market to pay a $500,000 fine plus special penalty assessments of $25,050. The court also ordered Moon to pay a $5,000 fine plus an additional $5,000 in special penalty assessments.

In the court-filed plea agreement, Zion Market admitted that between 2011 and 2019, about half of the market’s 100-person work force was not authorized to work in the United States, and that it had employed undocumented aliens as early as 2003, through as recently as 2019. Zion acknowledged that it realized a pecuniary gain of at least $500,000 by employing illegal aliens. Moon, the market’s manager, knew that the illegal aliens could not legally work in the United States, but hired and continued to employ the aliens as part of a pattern and practice of employing unauthorized aliens. Upon learning of the investigation, Zion took steps to comply with federal immigration and labor laws.

Under federal law, employers are required to verify the identity and employment eligibility of all individuals they hire, and to document that information using the Employment Eligibility Verification Form I-9. Homeland Security Investigations continues to focus on the criminal prosecution of employers who knowingly break the law and will continue to audit employers’ immigration forms, such as the Form I-9 that verifies employees’ authorization to work in the United States. Homeland Security Investigations will also employ civil fines to encourage compliance with the law. Worksite enforcement investigators help combat worker exploitation, illegal wages, child labor, and other crimes collateral to worksite enforcement.

“Federal labor and immigration laws protect American workers by requiring employers to hire only U.S. citizens and aliens who are authorized to work in the country,” said U.S. Attorney Robert Brewer. “Zion Market ignored those laws for over a decade, and today Zion and its general manager paid a high price for that conduct. We will continue to vigorously enforce immigration laws where we find employers engaging in a pattern or practice of hiring unauthorized individuals in reckless disregard of the law.” Brewer praised prosecutor Stephen Wong and agents with Homeland Security Investigations for their excellent work on this case.

“Today’s sentencing is an example of HSI’s commitment to the investigation of employers who knowingly break the law to exploit workers and conduct other illegal practices,” said Cardell Morant, HSI Special Agent in Charge for San Diego. “These investigations hold employers accountable by eliminating unfair advantages for companies that hire an illegal workforce, protecting jobs for those who are legally employed.”

DEFENDANTS                                            Case Number 20-mj-3948-MSB                                          

Zion Market Inc., 7655 Clairemont Mesa, Inc.                                 

Timothy Moon                                                Age: 41                                   San Diego, CA

SUMMARY OF CHARGES

Continuing to Employ Unauthorized Aliens – Title 8, U.S.C., Section 1324a(a)(2) and 1324(f)(1), a misdemeanor

Maximum penalty for an individual: Six months in prison and $5,000 fine

Maximum Penalty for an organization: Fine of $10,000 or not more than twice the gross pecuniary gain realized from the offense, whichever is greater

AGENCY

Homeland Security Investigations (HSI)

 

Assistant U. S. Attorney Stephen H. Wong (619) 546-9464    

NEWS RELEASE SUMMARY – December 17, 2020

SAN DIEGO – A former contract employee with California’s Employment Development Department, which administers the state’s unemployment insurance program, was charged in federal court today with fraud and identity theft in connection with a scheme to steal hundreds of thousands of dollars in pandemic unemployment aid.

Nyika Gomez, 40, of San Diego, was arrested at her home yesterday and charged in a criminal complaint unsealed today. She made her first appearance in federal court at 2 p.m. today before U.S. Magistrate Judge Karen S. Crawford.

According to the complaint, Gomez conspired with her boyfriend, a prisoner serving a term of 94 years to life at California State Prison, Sacramento for murder, to submit fraudulent pandemic unemployment insurance claims for California state prisoners and out-of-state residents whose identifying information was stolen.

Gomez’s job at the Employment Development Department (EDD) involved assisting unemployed Californians to qualify for benefits. As alleged in the complaint, she used her training and expertise to defraud that very program in a scheme designed to generate hundreds of thousands of dollars in stolen benefits.

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, Congress provided new unemployment benefits for those affected by the COVID-19 pandemic who would not otherwise qualify for unemployment insurance.

According to the criminal complaint, in July 2020, Gomez was employed by an EDD contractor as a Call Center Agent where she helped individuals process their unemployment insurance claims. In that position, Gomez received training in EDD’s procedures and regulations and she had access to confidential information regarding EDD’s unemployment insurance program.

The complaint said Gomez used that knowledge to submit fraudulent unemployment insurance claims using personal identifying information (PII) she acquired from California prisoners, with help from her inmate boyfriend.  With his help, she was also able to purchase stolen PII from out-of-state residents, which she used to submit additional fraudulent unemployment claims.

Gomez arranged for the stolen benefits – paid out in the form of a debit card – to be mailed directly to her residence, or to the residence of someone working with her. Gomez returned some of the proceeds to the prison inmates by transferring money to their prison accounts.

In the statement of facts submitted for the criminal complaint, agents describe how they obtained video surveillance recordings of Gomez using the fraudulently obtained debit cards at bank ATM machines. For example, the photo below is a screen-capture from an ATM video taken on July 23, 2020. Gomez is withdrawing $1,000 on a debit card issued to a California prison inmate.

According to the complaint, the following video screen-captures depict the defendant while using EDD-issued debit cards she obtained through fraud:

Below is a screen-capture of Gomez withdrawing $1,000 from an ATM issued to a California Prison Inmate on July 23, 2020.

In this screen-capture from a drive through ATM taken on July 20, 2020, Gomez is withdrawing $500 from a debit card issued to a California prison inmate.

In this screen capture from a drive-through ATM taken on August 13, 2020, Gomez is withdrawing $300 from a debit card issued to a California prison inmate.

The charges are the product of an investigation jointly undertaken by the U.S. Department of Labor, Office of the Inspector General (DOL-OIG), the California Employment Development Department Office of Investigations (EDD OI), United States Postal Inspection Service (USPIS), and Homeland Security Investigations (HSI). Investigators initiated an investigation after noting several unemployment insurance benefit claims originating from Gomez’s own computer and using her own residence as the claimant’s address. Investigators also obtained consensually monitored recorded calls between Gomez and her boyfriend discussing the scheme and supplying Gomez with PII of prison inmates. A court-authorized search of Gomez residence also revealed that she possessed, and was using, two of the debit cards that were issued for claims by prison inmates.

“Pandemic unemployment insurance programs are a critical part of our safety net designed to support hardworking citizens who are suffering during this unprecedented time,” said U.S. Attorney Brewer. “Fraud related to COVID-19 is particularly disturbing as it exploits a national crisis for personal gain.”

Brewer praised prosecutor Stephen Wong and agents from U.S. Department of Labor, Office of the Inspector General Office of Investigations-Labor Racketeering & Fraud; California Employment Development Department Office of Investigations; California Department of Corrections and Rehabilitation-Investigative Services Unit; United States Postal Inspection Service and Homeland Security Investigations for their excellent work on this case.

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

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

DEFENDANT                                               Case Number 20-MJ-5356-KSC                                         

Nyika Renada Gomez                                     Age: 40                                   San Diego, CA

SUMMARY OF CHARGES

Counts 1 through 9: Title 18, United States Code, section 1343 (wire fraud)

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

Counts 10 through 12: Title 18, United States Code, section 1028A; (aggravated identity theft)

Maximum penalty: Two-year mandatory-minimum in prison, consecutive to any prison term imposed for Counts 1 through 9.

AGENCY

U.S. Department of Labor, Office of the Inspector General (DOL-OIG) Office of Investigations-Labor Racketeering & Fraud

California Employment Development Department Office of Investigations (EDD OI)

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

United States Postal Inspection Service (USPIS)

Homeland Security Investigations (HSI) 

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

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

NEWS RELEASE SUMMARY – December 17, 2020

SAN DIEGO – Adult film performer and producer Ruben Andre Garcia pleaded guilty in federal court today to sex trafficking charges, admitting that he conspired with the owners of the adult websites GirlsDoPorn and GirlsDoToys to fraudulently coerce young women to appear in sex videos.

Garcia pleaded guilty before U.S. Magistrate Judge Jill L. Burkhardt to Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, and Sex Trafficking by Force, Fraud and Coercion. Garcia, the first of six defendants to plead guilty, admitted that he worked from 2013 to 2019 as a recruiter and adult film performer for GirlsDoPorn and GirlsDoToys adult websites, which were run by co-defendants Michael James Pratt and Matthew Isaac Wolfe. Both sites offered paid subscriptions and featured videos of young adult women appearing in their first pornographic video. The websites generated millions of dollars in revenue and the videos were viewed millions of times.

Garcia admitted in his plea agreement that in order to recruit victims to appear in the videos, he and his co-conspirators threatened, deceived and lied to them, promising that the videos would never be posted online, that “no one” would ever find out, and that the videos would never be released in the United States. In actuality, the co-conspirators were posting the videos on GirlsDoPorn, GirlsDoToys, and PornHub, one of the world’s most heavily-trafficked porn sites. Many of the victim videos were viewed millions of times.

Garcia also admitted that he recruited and paid other young women to act as “references” to falsely reassure reluctant victims that the videos would not be posted online and that there was “no way” anyone would find out. Garcia used young women as recruiters, because victims “were more likely to believe other young women.” The references were paid a fixed fee for every victim they attempted to recruit and additional compensation for victims who agreed to film a video.

Victims were recruited from throughout the United States and Canada. Once they arrived in San Diego, they were taken to local hotels or short term rental units where the videos were produced. The defendant and other co-conspirators continued to falsely assure the victims that the videos would not be posted online and that no one would find out. Garcia and other co-conspirators used aliases and companies with misleading names to ensure that the victims could not discover that they were behind GirlsDoPorn and GirlsDoToys.

Before the video shoots, Garcia offered victims marijuana or alcohol and some drank or smoked with Garcia before filming. When some victims changed their minds about going forward or finishing the video shoots, Garcia and other co-conspirators threatened to sue them, cancel their flights home, or post the footage that was already filmed online, which, unbeknownst to the victims, was going to happen anyway.

Garcia admitted that victims were also misled about how long the video shoots lasted. Most were told that the video production would take around 30 minutes, when they typically lasted for several hours. Garcia admitted that the sex was rough and caused many victims pain, and, in some cases bleeding. When victims asked to stop filming, Garcia and other co-conspirators told the victims that they had to keep going and finish the videos.  Hotel room doors were often blocked by camera and recording equipment.

The GirlsDoPorn and GirlsDoToys websites generated millions of dollars in revenue from this scheme. For his part, Garcia was paid a commission for each victim that he recruited on top of an hourly wage for his time. Garcia will be ordered to pay restitution in an amount to be determined by the court at sentencing.

“This defendant was a key player in a despicable fraud that has devastated the victims,” said U.S. Attorney Robert Brewer. “We will continue to fight for justice for them, and to prevent others from becoming victims of these schemes.” Brewer 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, on a case that resulted in tremendous pain for the victims.

FBI Special Agent in Charge Suzanne Turner said, “The FBI is committed to investigating those who prey upon trusting women and girls, causing pain and humiliation for their own personal gain. Today’s guilty plea of Garcia is just a small victory in the ongoing battle with those who commit sex trafficking.”

Garcia is scheduled to be sentenced by U.S. District Judge Janis L. Sammartino on March 5, 2021 at 9 a.m. The next hearing in the ongoing case is January 22, 2021 at 2:00 p.m.

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

The FBI is offering a reward of up to $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

DEFENDANTS                                            Case Number 19cr4488-JLS                                    

Ruben Andre Garcia                                       Age:    31                    San Diego, CA

*Pleaded guilty to Counts 1 and 7

CO-DEFENDANTS

Michael James Pratt                                       Age:     36                    Fugitive

Matthew Isaac Wolfe                                      Age     37                    San Diego, CA

Theodore Wilfred Gyi                                    Age:    42                    Aliso Viejo, CA

Valorie Moser                                                 Age:    37                    San Diego, CA

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

FBI

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.

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

NEWS RELEASE SUMMARY – December 14, 2020

SAN DIEGO – Tijuana resident John Jaimes Torres was sentenced in federal court today to six months in custody for smuggling protected sea cucumbers valued at more than $60,000 into the United States.

In November of 2019, Torres was discovered with 101 undeclared packages of sea cucumbers, totaling 145 kilograms, concealed in, under, and behind toolboxes in the bed of his truck. The sea cucumbers were of the species Isostichopus fuscus, which is protected under the Convention on International Trade in Endangered Species (CITES).  In order to lawfully import these sea cucumbers, a CITES import/export permit and CITES certificate of origin was required, as well as an import/export license from the U.S. Fish and Wildlife Service, none of which Torres possessed. 

As noted in court proceedings, in addition to the sea cucumbers, Torres possessed four cell phones. A search of these phones revealed evidence of prior smuggling events. For example, in July of 2019, Torres delivered more than 20 bags of sea cucumbers to a storage unit in the San Diego area. He sent a photo of the sea cucumbers in the storage unit to his client.

The search of the phones also indicated that Torres was an all-service smuggler, crossing food products, alcohol, medications and cigarettes in addition to the sea cucumbers, for profit. At the time he crossed the border, Torres was in possession of $1,600 in cash. In addition to the custodial sentence, Torres was also ordered to make restitution of $10,000 to the government of Mexico as compensation for the loss of its natural resources. Torres was ordered to self-surrender to begin serving his sentence on or before February 12, 2021.

“Scientists tell us that sea cucumbers play a critical role in keeping coral reef and other tropical ocean ecosystems healthy,” said U.S. Attorney Robert Brewer. “Unfortunately the black market for sea cucumbers is thriving, making these cases against smugglers even more important.” Brewer praised prosecutor Melanie Pierson and agents with U.S. Fish and Wildlife Service, Office of Law Enforcement and Homeland Security Investigations and Customs and Border Protection for their excellent work on this case.

“The unlawful commercialization of living marine faunae, such as CITES-protected sea cucumbers, not only harms the individual species, but it promotes the destruction of ocean ecosystems that other wildlife depend on for survival,” said special agent in charge Dan Crum.  “Today's sentencing sends a message that our law enforcement agents and prosecutors will continue to investigate, prosecute and bring to justice any violators who illegally exploit wildlife for profit.”

“The illegal sea cucumber trade is a real problem, and illicit trafficking in protected species fuels crime and decimates protected wildlife populations,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations.  “This arrest and conviction demonstrates our commitment to work with our law enforcement partners to protect threatened and endangered species and bring justice to the criminals that seek to profit from their exploitation.”

DEFENDANT                                               Case Number 19cr4848-W                                      

John Jaimes Torres                                          Age: 52                                   Tijuana, Mexico

SUMMARY OF CHARGES

Count 1

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

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

Counts 2-5

Smuggling/Importation Contrary to Law – Title 18, U.S.C., Sec.545

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

AGENCY

U.S. Fish and Wildlife Service, Office of Law Enforcement

Homeland Security Investigations

Customs and Border Protection

Assistant U.S. Attorneys Joshua Mellor (619) 546-9733 and Mark W. Pletcher (619) 546-9714

NEWS RELEASE SUMMARY – December 14, 2020

SAN DIEGO – Four bank accounts containing $3,971,468.40 in illicit funds generated from Phantom Secure, an encrypted telecommunications network used by transnational organized criminal syndicates, were seized by authorities in Singapore and repatriated to the United States, the U.S. Attorney’s Office for the Southern District of California announced today. 

Vincent Ramos, the chief executive of Canada-based Phantom Secure, and four of his associates were indicted by a federal grand jury in March 2018 on charges that they operated a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted telecommunications devices and services.

This was the first time the U.S. government targeted a company and its principals for conspiring with criminal organizations by providing them with the technological tools to evade law enforcement and obstruct justice while committing transnational drug trafficking.

According to court documents, Phantom Secure advertised its products as impervious to decryption, wiretapping or legal third-party records requests. Phantom Secure also guaranteed the destruction of evidence contained within a device if it was compromised, either by an informant or because it fell into the hands of law enforcement.  

Starting in 2018, U.S. authorities, working closely with the Commercial Affairs Department (CAD) of the Singapore Police Force, identified and seized over $3.9 million in illicit funds linked to the sale of Phantom Secure devices.  Those funds were seized in Singapore, forfeited as proceeds of criminal activity and have now been repatriated to the United States. 

In October 2018, Ramos pleaded guilty to leading a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications devices.  In his plea agreement, Ramos admitted that he and his co-conspirators facilitated the distribution of cocaine, heroin, and methamphetamine to locations around the world including in Australia, Canada, Europe, Mexico, Thailand and the United States by supplying narcotics traffickers with Phantom Secure encrypted communications devices designed to thwart law enforcement.

To keep the communications out of the reach of law enforcement, Ramos and others maintained Phantom Secure servers in Panama and Hong Kong, used virtual proxy servers to disguise the physical location of its servers, and remotely deleted or “wiped” devices seized by law enforcement.  Ramos’ customers used his products to devastating and sometimes deadly effect, and Ramos used this to market his encryption services to criminals across the world.  According to court documents, in response to a March 5, 2014 news article that reported investigations of a gangland murder were stymied because the suspects used Phantom Secure devices to coordinate the killing, Ramos wrote, “This is the best verification on what we have been saying all along – proven and effective for now over nine years. It is the highest level of authority confirming our effectiveness. It can’t get better than that.” 

As part of his guilty plea, Ramos agreed to an $80 million forfeiture money judgment as well as the forfeiture of tens of millions of dollars in identified assets, ranging from bank accounts worldwide, to houses, to a Lamborghini, to cryptocurrency accounts, to gold coins. The money repatriated from Singapore was among the assets identified by investigators to be forfeited. Ramos was sentenced to 108 months in prison.

“Tremendous determination by this office and our investigative partners dismantled this criminal network,” said U.S. Attorney Robert Brewer. “As a result of this ground-breaking prosecution, the network has been shut down, its founder has been brought to justice, and its money is being identified and forfeited to help victims and witnesses of crime.” Brewer praised prosecutors Mark Pletcher and Joshua Mellor as well as agents from the Federal Bureau of Investigation, U.S. Drug Enforcement Administration, and U.S. Marshals Service for their excellent work on this case. 

The Department of Justice specifically commends the efforts of our Singapore counterparts in identifying, freezing, and repatriating proceeds of this criminal enterprise.  Investigators with the Commercial Affairs Department and representatives of the Attorney General’s Chamber worked relentlessly to ensure that these proceeds would not be used to promote further illegal activity. 

The U.S. Attorney’s Office for the Southern District of California further notes the invaluable assistance of the Department of Justice’s Office of International Affairs.    

“The repatriation of close to $4 million by our Singapore-based partners ensures that Vincent Ramos and the leaders of Phantom Secure will pay for their crimes,” stated FBI Special Agent in Charge Suzanne Turner.  “The FBI’s unrelenting work to take down transnational criminal organizations like Phantom Secure and recoup their illegal financial gains is only possible through close working relationships with our global law enforcement partners.”

“This case demonstrates the U.S. Marshals’ firm commitment to tracing illicit funds and dismantling criminal enterprises worldwide,” said Assistant Director Timothy Virtue of the U.S. Marshals Asset Forfeiture Division. “We express our gratitude to our Singapore counterparts for their unflinching cooperation in clamping down on transnational organized criminal syndicates and money launderers.” 

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.

AGENCIES

Federal Bureau of Investigation

Drug Enforcement Administration

U.S. Marshals Service

Singapore Police Force - Commercial Affairs Department

Singapore Attorney-General’s Chambers

Australian Federal Police

New South Wales Police (Australia)

New South Wales Crime Commission (Australia)

Australian Criminal Intelligence Commission

Royal Canadian Mounted Police

International Assistance Group, Department of Justice, Canada Department of Justice, Organized Crime Drug Enforcement Task Forces

Office of Enforcement Operations of the Department’s Criminal Division

Department of Justice’s Office of International Affairs

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

NEWS RELEASE SUMMARY – December 11, 2020

SAN DIEGO – Escondido pain clinic doctor Bradley Chesler, M.D., has paid the United States $153,000 to resolve allegations that he overprescribed opioids. Dr. Chesler is a board-certified physiatrist who operates a pain clinic in Escondido, California.  This settlement stems from the United States’ investigation into whether Dr. Chesler illegally prescribed opioids to his patients in violation of the Controlled Substances Act.

Pursuant to the Controlled Substances Act, doctors may write prescriptions for opioids only for a legitimate medical purpose while acting in the usual course of their professional practice. Based on its investigation, the United States alleged that from January 1, 2014 to August 31, 2019, Dr. Chesler wrote opioid prescriptions that violated the Controlled Substances Act, which included prescriptions for fentanyl, hydromorphone, methadone, and oxycodone.  The United States further alleged that Dr. Chesler prescribed opioids while he concurrently prescribed benzodiazepines, and he prescribed to some patients a combination of at least one opioid, one benzodiazepine, and one muscle relaxant.  Drug abusers colloquially refer to the opioid, benzodiazepine, and muscle relaxant combination as the “Trinity” because of its rapid euphoric effects.  These drug combinations are known to increase the risk of abuse, addiction, and overdose.

The investigation exemplifies the Department of Justice’s willingness to investigate doctors who may be overprescribing opioids while treating patients who suffer painful conditions.  Health care providers treating patients who suffer from pain must still only prescribe opioids in accordance with recognized and accepted medical standards.  Indeed, public health experts have long warned health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages. As such, it has been recommended that health care providers carefully track the potency of opioids prescribed to patients by noting the Morphine Milligram Equivalent (MME, also commonly referred to as Morphine Equivalent Dose or MED) of prescribed opioids.  Among other things, tracking MMEs advances better practices for pain management by reinforcing the need for providers to consider alternatives to using high-dosage opioids to treat pain, and to appropriately justify decisions to use opioids at dosages that place patients at high risk of addiction, abuse, and overdose. Furthermore, prescribing high dosages increases the risk that patients will divert opioids to people who were not prescribed them.

Based on its investigation, the United States alleged that Dr. Chesler prescribed large quantities of opioids to his patients that reached high daily MME levels (sometimes even exceeding 180 MME).  The United States further alleged that Dr. Chesler failed to properly address aberrant urine drug test results when prescribing opioids. 

“Doctors have an important responsibility to properly treat their patients and not overprescribe opioids,” said U.S. Attorney Robert Brewer. “When doctors or other health care providers illegally prescribe opioids outside of the law, my office will pursue the appropriate legal remedy and protect our citizens.  As we have consistently demonstrated, our prosecutors will continue to use all available tools to combat the serious opioid epidemic.” Brewer praised Assistant U.S. Attorney Dylan Aste and DEA agents for their excellent work on this case.

DEA Special Agent in Charge John Callery said, “Although 99 percent of medical professionals abide by DEA guidance and federal law, we will investigate those who put illicit profits before their oaths and bring them to justice.”

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

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

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

 

Assistant U. S. Attorney Megan Rossi (619) 546-9661

NEWS RELEASE SUMMARY – December 3, 2020

SAN DIEGO – Rafeek Omar Karamat of San Diego pleaded guilty in federal court today to bank robbery before U.S. Magistrate Judge Karen S. Crawford.

Karamat admitted that on September 30, 2020, at approximately 9:59 a.m., he entered the Navy Federal Credit Union in San Diego wearing a facecovering and approached a teller.  Karamat walked around the corner of the teller’s desk, brandished a knife and demanded, “give me money,” and “give me what I came for.” The teller complied and provided Karamat with $2,500 in cash.  Karamat then ran to a white Ford Ranger and sped away.

Karamat was arrested by La Mesa Police Officers shortly after fleeing the Navy Federal Credit Union. Karamat had the stolen money and a knife at the time of his arrest.

“Bank robberies are a terrifying experience for both customers and the tellers,” said U.S. Attorney Robert Brewer. “Thanks to the swift action of federal and local law enforcement agencies in this matter, this defenedant was quickly apprehended and justice has been achieved.” Brewer praised prosecutor Megan Rossi and the FBI for excellent work on this case.

“Robbing banks may sound old-fashioned in today's high-tech world, but it's a crime problem that continues to take a toll on financial institutions and communities across the nation,” said FBI Special Agent in Charge Suzanne Turner. “In San Diego, the FBI Violent Crimes Task Force is dedicated to working with our local partners to keep our communities safe from bank robbers and other violent criminals.” Brewer praised prosecutor Megan Rossi, the FBI and La Mesa Police Department for their excellent work on this case.

“Our community is a safer place thanks to the outstanding work of the responding officers and our partners at the FBI Violent Crimes Task Force and U.S. Attorney’s Office,” said Acting La Mesa Police Chief Ray Sweeney. “The collaboration between the La Mesa Police Department and our federal partners is a critical  component to keep all of our citizens safe from violent crimes.”

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 Robert 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.

Karamat is scheduled to be sentenced on February 22, 2021 at 9 a.m. before U.S. District Judge Anthony J. Battaglia.

DEFENDANT                                               Case Number 20cr3392-AJB                                  

Rafeek Omar Karamat                                    Age: 35                       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

AGENCY

Federal Bureau of Investigations

La Mesa Police Department

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

NEWS RELEASE SUMMARY – December 3, 2020

SAN DIEGO – Dr. Jennings Ryan Staley, previously charged with one count of mail fraud, was indicted by a federal grand jury yesterday for additional crimes arising from his business venture selling COVID-19 “treatment kits,” which he advertised to one potential customer as a “miracle cure.”  Staley is a licensed physician and the former operator of Skinny Beach Med Spas in and around San Diego. 

According to the new charges, which became publicly available today, Staley agreed with a Chinese supplier to smuggle hydroxychloroquine powder into the U.S., lying to U.S. Customs by mislabeling a shipment as “yam extract.” Staley is also charged with stealing the name and identifying information of one of his employees in order to create and submit a bogus prescription for hydroxychloroquine on the employee’s behalf, in order to sell the drugs at a markup to his customers. 

In late March and early April 2020, Staley marketed and sold his treatment kits to Skinny Beach customers.  He described his product as a “concierge medicine experience,” which included hydroxychloroquine—an anti-malarial drug that Staley described to one potential customer as a “guaranteed” cure for COVID-19.  Staley’s kits were priced as high as $3,995 for a family of four, while Staley himself paid roughly $1 per tablet of hydroxychloroquine. Staley’s marketing materials, per the indictment, stressed that recipients should “NOT BELIEVE THE REPORTS THAT HYDROXYCHLOROQUINE DOESN’T WORK!” 

During a phone call with a prospective customer, in reality an undercover FBI agent, Staley repeatedly promised that the drugs he was selling would cure COVID-19.  According to the charging document, Staley said hydroxychloroquine “cures the disease,” and that it was “incredible,” a “magic bullet,” and an “amazing weapon.”  When the undercover agent asked if hydroxychloroquine and mefloquine—another anti-malarial that Staley described as “the Russian cure”—would effectively cure someone infected with COVID-19, Staley replied, “One hundred percent.  One hundred percent.”

One week later, when interviewed by FBI agents, the indictment alleges that Staley falsely denied ever saying that the Skinny Beach treatment packages were a “one hundred percent effective cure.” 

“People must be able to trust their doctors to offer honest medical advice instead of a fraudulent sales pitch, especially during a global pandemic,” said U.S. Attorney Robert Brewer. “Medical professionals who lie about their treatments to profit from a desperate, fearful public will face criminal charges and serious consequences like any other lawbreaker.” Brewer praised prosecutors Nicholas Pilchak and Jaclyn Stahl as well as agents from the FBI and U.S. Food and Drug Administration, Office of Criminal Investigations, for their excellent work on this case.

“The FBI has been vigilant in investigating anyone trying to capitalize on the COVID-19 crisis,” said FBI Special Agent in Charge Suzanne Turner. “It's clear that trust in our medical professionals is always important, but particularly so in current times. These additional charges emphasize the FBI's dedication to fully uncovering the extent of Dr. Staley's alleged fraudulent actions and our unwavering commitment to pursuing those who put personal greed before humanity.”

The charging document outlines multiple ways that Staley obtained the hydroxychloroquine pills he resold as part of his treatment kits, including soliciting them from his acquaintances and employees with preexisting hydroxychloroquine prescriptions, and writing prescriptions for immediate family members and acquaintances to get the drugs “by any means necessary.”  He even had plans to make his own tablets of hydroxychloroquine, using the mislabeled powder he planned to smuggle in from Chinese suppliers he found online.

Staley wrote one sham prescription, according to the superseding indictment, for a Skinny Beach employee.  Staley had also asked the employee for a few tablets from her own hydroxychloroquine prescription, supposedly for another Skinny Beach staff member who was sick. Instead of borrowing a few of the employee’s tablets to help a suffering colleague as he had promised, however, Staley turned around and wrote a bogus prescription using her name, date of birth, and prior home address.  Staley then took the sham prescription to multiple pharmacies to try to obtain hydroxychloroquine in the employee’s name, including by pretending to be her during the online ordering process. 

Staley also lied to agents about the employee whose identifying information he had stolen, falsely claiming that she had allowed him to use her pre-existing medical condition to get hydroxychloroquine tablets that he would re-sell at a significant profit.

“The FDA continues its steadfast efforts to identify, investigate, and bring to justice those who attempt to profit from the pandemic by offering American consumers so-called ‘miracle cures’ to treat COVID-19,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office. “We will continue to work with our law enforcement partners to bring to justice those who place profits above the public health.”

The superseding indictment also charges Staley with an importation crime, based on his agreement with a Chinese supplier to lie to U.S. Customs about a shipment that Staley believed contained 12 kilograms of hydroxychloroquine powder.  As alleged, when the supplier volunteered to “change the product name to export” in order to get the product through U.S. Customs by “replac[ing] hydroxychloroquine export with yam extract,” Staley replied “Excellent,” and then suggested the same mislabeling technique himself to another potential supplier. 

Staley later bragged to the undercover agent just days later that he “got the last tank of . . . hydroxychloroquine smuggled out of China Sunday night at 1:00 a.m. in the morning” by “saying it was sweet potato extract.”  In truth, but unbeknownst to Staley, the shipment contained only baking soda. 

As set out in the indictment, Staley also sought to raise money for his lucrative COVID-19 venture by soliciting investments.  He told one potential investor that, if she contributed a minimum of $25,000, he would promise to repay “triple [her] money in 90 days.”    

Staley’s next court date is December 17, 2020 at 11 a.m. before U.S. District Judge Gonzalo P. Curiel.

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

DEFENDANT                                               Case Number 20cr1227-GPC                                             

Jennings Ryan Staley, M.D.                           Age: 44                       Residence: San Diego, CA

SUMMARY OF CHARGES

Mail Fraud, in violation of Title 18, United States Code, Section 1341

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

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

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

False Statement, in violation of Title 18, United States Code, Section 1001

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

Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A

Mandatory minimum two years in prison; fine; special assessment

AGENCIES

Federal Bureau of Investigation

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

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

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

NEWS RELEASE SUMMARY – December 2, 2020

SAN DIEGO – A former Glendale resident pleaded guilty today to engaging in a long-running, nationwide fraud conspiracy that stole unwitting victims’ financial information by skimming it from ATMs and gas pumps in San Diego and across the country, and used the stolen information to make phony credit and debit cards.  Seven men in total are charged with participating in that conspiracy, and in a related money laundering conspiracy, that netted over a million dollars in ill-gotten gains.

Defendant Arsen Minasyan entered a guilty plea today before U.S. Magistrate Judge Linda Lopez to participating in a conspiracy to launder the proceeds of fraud committed by unauthorized access devices: essentially, fake credit and debit cards used as part of the fraud scheme. 

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

“This office will not tolerate those who prey upon unwitting victims innocently using the financial system for their everyday needs,” said U.S. Attorney Robert Brewer, “nor thieves’ criminal partners who launder their money.  Both fraudsters and their money laundering accomplices will face justice.”  Brewer praised prosecutor Nick Pilchak and U.S. Secret Service agents for their excellent work on this case.

“The fraudulent compromise of individuals’ financial security threatens our economic stability and security as a whole, and will not go undetected,” said San Diego Acting Special Agent in Charge of Secret Service Timothy Scott. “I commend the especially skilled investigators who worked tirelessly to detect these defendants and their criminal activity, despite their futile efforts to operate in the shadows.”

In his plea agreement, Minasyan admitted that he and another defendant had between them $13,380 in illicit cash and 68 phony cards on just a single day last summer during the conspiracy.  Minasyan acknowledged that the entire scheme inflicted losses and attempted losses of at least $1.2 million on its victims, and that he personally participated in the scheme in Glendale, New York, Oklahoma, and Southern California.

According to the charges in the indictment, the conspiracy victimized individuals and their accounts across the country: in New York, Illinois, Missouri, Oklahoma, and at over a dozen post offices in Southern California, including throughout the San Diego area, where the perpetrators used stolen cards to buy hundreds of thousands of dollars of postal money orders, which they then laundered through the banks.

The money laundering charges detail how three defendants—the Simonyan brothers and their accomplice, Minasyan—laundered the criminal funds through shell bank accounts and structured withdrawals.  For example, in one month alone, the Simonyan brothers allegedly withdrew $91,500 in cash from a single bank account in structured amounts under $10,000 to avoid the threshold for reporting the withdrawals to the authorities.  

Minasyan is set to be sentenced February 24 at 9:30 a.m. by U.S. District Judge Michael M. Anello. The remaining defendants are next in court on January 13, 2021 before Judge Anello.

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

DEFENDANTS                                Age                             Case Number 20cr314-MMA         

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

 

SUMMARY OF CHARGES

Conspiracy to Launder Monetary Instruments, in violation of Title 18, United States Code, Section 1956(h) (Defendants 1 through 3 only)

Maximum Penalty: Twenty years in prison; fine of $500,000 or twice the value of the property involved

Conspiracy to Possess Fifteen or More Unauthorized Access Devices, in violation of Title 18, United States Code, Sections 1029(b)(2), 1029(a)(3), and 1029(c)(1)(A)(i) (Defendants 1 and 3–7 only)

Maximum Penalty: Five years in prison; fine of $250,000 or twice the gross gain or loss

AGENCY

United States Secret Service

U.S. Postal Inspection Service

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

Special Attorneys Michael Wheat (619) 546-8437, Joseph Orabona (619) 546-7951, Janaki Chopra (619) 546-8817, and Colin McDonald (619) 546-9144

NEWS RELEASE SUMMARY – December 2, 2020

HONOLULU, Hawaii – Former Honolulu Police Chief Louis Kealoha and his wife, former Honolulu prosecutor Katherine Kealoha, were sentenced in federal court this week to 84 months and 156 months in prison, respectively, for a 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 the conspiracy.

Chief U.S. District Judge J. Michael Seabright of the District of Hawaii handed down the sentences, remarking that the conspiracy was “staggering in its breadth, its scope, and its audacity.” He stated further that “the impact on the community is clear: The conduct of the defendants has shaken the community and its trust in the Honolulu Police Department.”

The sentences mark the end of one of the largest public corruption cases in Hawaii history. In June 2019, after six weeks of trial and one day of deliberation, a federal jury in Honolulu convicted the Kealohas, Hahn, and Nguyen of conspiracy and attempted obstruction of justice pertaining to the false arrest and prosecution of Katherine’s uncle, Gerard Puana. The evidence at trial established that the conspirators used their considerable power, including commandeering the Honolulu Police Department’s elite Criminal Intelligence Unit (CIU), to frame Gerard with stealing the Kealohas’ mailbox. Hahn and Nguyen were both members of CIU, which acted directly at the behest of Louis Kealoha. The Kealohas’ motive for framing Gerard was to discredit and intimidate him after he accused Katherine of stealing money from him and his elderly mother—Katherine’s grandmother. The evidence at trial demonstrated that the Kealohas took and spent over $148,000 of the grandmother’s money in just a six-month period, with payments going towards expenses such as mortgage payments, Elton John concert tickets, Mercedes and Maserati car payments, a trip to Disneyland, and a $23,976 brunch tab at the Sheraton Waikiki to celebrate Louis Kealoha’s induction as Honolulu Police Chief in 2009.

Once Gerard started voicing claims of fraud, the Kealohas moved to silence him by falsely accusing him of a felony offense. To frame Gerard, the conspirators prepped the Kealohas’ mailbox to be “stolen,” selectively edited grainy surveillance video to conceal their preparatory acts, falsely identified Gerard as the culprit captured by the video, falsified police reports, withheld and destroyed evidence, and repeatedly lied about their activity to investigators, the federal grand jury, and the District Court for the District of Hawaii. This all occurred while Louis Kealoha was Honolulu’s Police Chief and while Katherine Kealoha was a high-ranking Honolulu prosecutor.

“This was a flagrant and stunning abuse of power that victimized an entire community by undermining public confidence in its leaders and the rule of law,” said U.S. Attorney Robert Brewer. “After years of manipulating the levers of justice to shroud their own crimes, justice has been delivered to these defendants.” Brewer praised FBI agents and Special Attorneys Michael Wheat, Joseph Orabona, Janaki Chopra, and Colin McDonald for achieving justice in this case after many years of tenacious investigation and skillful litigation.

“Our citizens entrust public servants with great powers and authorities. It is our responsibility to serve our community with integrity and authenticity – with truth and justice as our hallmark,” said Special Agent in Charge Eli S. Miranda. “The Kealohas betrayed this trust for their own selfish entitlements, using deception and breaking the same laws they swore to uphold. The FBI will enthusiastically continue to investigate any corrupt public official who willfully and maliciously abuse their office.”

In addition to their custodial sentences, Katherine Kealoha and Louis Kealoha were ordered to pay $454,984.78 and $237,698.56, respectively, in restitution to their victims, and ordered to forfeit property representing proceeds of fraud, including the Kealohas’ former home in Honolulu, a Rolex watch, and $228,746.79. Katherine Kealoha is already in custody; Louis Kealoha, Hahn, and Nguyen were ordered to self-surrender to the Bureau of Prisons on April 12, 2021.

DEFENDANTS                               

Louis M. Kealoha                               Age: 60                       Honolulu, Hawaii

Katherine P. Kealoha                          Age: 50                       Honolulu, Hawaii
Derek Wayne Hahn                            Age: 48                       Honolulu, Hawaii

Minh-Hung “Bobby” Nguyen            Age: 46                       Kaneohe, Hawaii

SUMMARY OF CONVICTIONS

Louis Kealoha                                  

CR No. 17-00582-JMS-WRP

Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371

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

Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)

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

CR No. 18-00068-JMS-WRP

Bank Fraud, in violation of 18 U.S.C. § 1344

Maximum Penalty: Thirty years in prison, $1 million fine

Katherine Kealoha                          

CR No. 17-00582-JMS-WRP

Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371

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

Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)

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

CR No. 18-00068-JMS-WRP

Bank Fraud, in violation of 18 U.S.C. § 1344

Maximum Penalty: Thirty years in prison, $1 million fine

Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A

Maximum Penalty: Mandatory term of imprisonment of two years, to be served consecutive to the sentence imposed for any underlying charge; fine of up to $250,000

CR No. 19-00015 JMS-WRP

Misprision of Felony, in violation of 18 U.S.C. § 4

Maximum Penalty: Three years in prison; fine of up to $250,000

Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen

CR No. 17-00582-JMS-WRP

Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371

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

Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)

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

AGENCY

Federal Bureau of Investigation

Honolulu, Portland, and San Diego Divisions

 

 

 

 

 

Special Attorneys Michael Wheat (619) 546-8437, Joseph Orabona (619) 546-7951, Janaki Chopra (619) 546-8817, and Colin McDonald (619) 546-9144

NEWS RELEASE SUMMARY – December 1, 2020

HONOLULU, Hawaii – Two former Honolulu police officers, Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen, were sentenced today for conspiring to obstruct justice by framing an innocent man with a crime he did not commit. Hahn and Nguyen were sentenced to 42 and 54 months in custody, respectively, by Chief U.S. District Judge J. Michael Seabright. Each will also be subject to two years of supervised release following their sentence.

In imposing the sentences, Judge Seabright remarked that the conspiracy was “staggering in its breadth, its scope, and its audacity.” He stated further that “the impact on the community is clear: the conduct of the defendants has shaken the community and its trust in the Honolulu Police Department.”

The sentences imposed today mark the end of one of the largest public corruption cases in Hawaii. In June 2019, after six weeks of trial and one day of deliberation, a federal jury in Honolulu convicted Hahn, Nguyen, and their two co-conspirators, former Honolulu prosecutor Katherine Kealoha and former Honolulu Chief of Police Louis Kealoha, of conspiracy and attempted obstruction of justice pertaining to the false arrest and prosecution of Katherine’s uncle, Gerard Puana. The evidence at trial established that the conspirators used their considerable power, including commandeering the Honolulu Police Department’s elite Criminal Intelligence Unit (CIU), to frame Gerard with stealing the Kealohas’ mailbox. The Kealohas’ motive for framing Gerard was to discredit and intimidate him after he accused Katherine of extensive fraud, of which Gerard and his elderly mother—Katherine’s grandmother—Florence Puana were victims. Hahn and Nguyen were both members of CIU, which acted directly at the behest of Louis. 

As Lieutenant of CIU, Hahn—who also had a business relationship with Katherine—played an integral role in the conspiracy to frame, arrest, and prosecute Gerard Puana. As Judge Seabright said at sentencing, Hahn “had his fingerprints all over the efforts the Kealohas were making to frame Gerard Puana for a crime he did not commit.” To accomplish the frame job, Hahn directed 20-30 police officers to conduct 24-hour surveillance of Gerard and initiate unnecessary law enforcement database searches of Gerard, his residence, and vehicle. Hahn also directed a CIU officer to selectively edit the surveillance video of the alleged mailbox “theft,” write false reports about the surveillance video, and destroy the original evidence so that the conspirators’ criminal acts could not be uncovered. Judge Seabright commented that Hahn “wanted to make it look as clean as possible. As sterile as possible. As by the book as possible.”

For his part, Nguyen—who was related by marriage to the Kealohas at the time—manipulated Florence into providing information about Gerard that would later be used to frame him. Nguyen also participated in an illegal search of Gerard’s residence, falsely identified Gerard as the “thief” in the surveillance video of the frame job, generated false police reports about Gerard, and conducted surveillance of Gerard leading to Gerard’s false arrest. Doubling down on all of his criminal actions, Nguyen then repeatedly lied with “ease and arrogance,” as noted by Judge Seabright, to the Honolulu Ethics Commission, federal agents, and the federal grand jury about the conspirators’ scheme and his extensive involvement in it. “Bobby Nguyen was a willing participant in all this. Happy to help. Happy to set up Gerard. Happy to leave this trail of destruction,” Judge Seabright said today.

“These officers shattered the victims’ lives and dishonored the Honolulu Police Department, said U.S. Attorney Robert Brewer. “This community deserved so much better from these officers. Today’s sentences, which bring this chapter to a close, will aid in restoring faith in a system that ultimately delivered justice.” Brewer praised FBI agents and Special Attorneys Michael Wheat, Joseph Orabona, Janaki Chopra, and Colin McDonald for achieving justice in this case after many years of tenacious investigation and skillful litigation.

Yesterday, Katherine Kealoha and Louis Kealoha were sentenced to 13 years and seven years, respectively. At the conclusion of their sentencing hearings, Hahn and Nguyen were ordered to report to prison on April 12, 2021. 

DEFENDANTS                                Case Number: CR 17-00582-JMS-WRP   

Derek Wayne Hahn                            Age: 48                       Honolulu, Hawaii

Minh-Hung “Bobby” Nguyen            Age: 46                       Kaneohe, Hawaii

SUMMARY OF CONVICTIONS

Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371

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

Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)

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

AGENCY

Federal Bureau of Investigation

Honolulu, Portland, and San Diego Divisions

 

Special Attorneys Michael Wheat (619) 546-8437, Joseph Orabona (619) 546-7951, Janaki Chopra (619) 546-8817, and Colin McDonald (619) 546-9144

NEWS RELEASE SUMMARY – November 30, 2020

HONOLULU, Hawaii – Former prosecutor Katherine Kealoha and former police chief Louis Kealoha were sentenced during separate hearings in federal court today to 13 years and seven years in prison, respectively, following a number of convictions, including conspiring to frame a relative with a crime to conceal their own fraud.

Chief U.S. District Judge J. Michael Seabright of the District of Hawaii also ordered the Kealohas to pay $454,984.78 and $237,698.56, respectively, in restitution to their victims, and ordered forfeiture of property representing proceeds of fraud, including the Kealohas’ former home in Honolulu, a Rolex watch, and $228,746.79. Katherine Kealoha is already in custody; Louis Kealoha was ordered to report to prison on April 12, 2021.

Judge Seabright rebuked the Kealohas for their “grotesque deprivation of civil rights,” which “staggered the community in many ways” and had “truly shaken confidence in our governing institutions.” He further remarked that “the Kealohas used their power to nurture, feed, and conceal their corrupt activity.”

The sentences imposed today mark the end of a series of criminal cases against the Kealohas. In June 2019, after six weeks of trial and one day of deliberation, a federal jury in Honolulu convicted the Honolulu power couple and Honolulu police officers Derek Hahn and Minh-Hung “Bobby” Nguyen of conspiracy and attempted obstruction of justice pertaining to the false arrest and prosecution of Katherine’s uncle, Gerard Puana. The evidence at trial established that the Kealohas used their considerable power, including commandeering the Honolulu Police Department’s elite Criminal Intelligence Unit, to frame Gerard with stealing their mailbox. To accomplish this, the conspirators prepped the mailbox to be “stolen,” selectively edited grainy surveillance video to conceal their preparatory acts, falsely identified Gerard as the culprit captured by the video, falsified police reports, withheld and destroyed evidence, and repeatedly lied about their activity to investigators, the federal grand jury, and the District Court for the District of Hawaii.

The Kealohas’ motive for framing Gerard was to discredit and intimidate him after he accused Katherine Kealoha of fraud. Trial evidence established that Katherine stole over $200,000 from him and Katherine’s elderly grandmother, Florence Puana. Acting as her grandmother’s “attorney,” Katherine convinced Florence—who was 89 years old at the time—to place a reverse mortgage on Florence’s family home. Katherine promised Florence that she would pay off the reverse mortgage after using some of the proceeds to consolidate the Kealohas’ debt. Instead, unbeknownst to Florence, Katherine funneled the reverse mortgage proceeds into a bank account that Katherine controlled. And within seven months, the Kealohas drained the account dry—spending over $148,000 on various personal expenses, including mortgage payments, Elton John concert tickets, Mercedes and Maserati car payments, a trip to Disneyland, and a $23,976 brunch tab at the Sheraton Waikiki to celebrate Louis Kealoha’s induction as Honolulu Police Chief in 2009. In the meantime, Katherine made no payments on the reverse mortgage, allowed the balance to balloon out of control, and diverted mortgage statements away from Florence’s mailbox to keep Florence from finding out. Once Florence did find out—almost a year and a half later—she was forced to sell her family home.

After they learned of the missing money and ballooning mortgage, Florence and Gerard confronted Katherine Kealoha about her actions. Katherine responded indignantly, threatening in a letter to seek “the highest form of legal retribution against ANYONE and EVERYONE who has written or verbally uttered those LIES about me!” True to her word, after Florence and Gerard filed a civil lawsuit against her, Katherine attempted to have Florence declared legally incompetent, and Katherine and her co-conspirators had Gerard arrested for a crime he did not commit. At Gerard’s theft trial, Louis Kealoha testified falsely that Gerard was the person displayed taking the mailbox in the grainy surveillance video. “That’s what makes this case so shocking: this could not have succeeded but for you and your position,” Judge Seabright told Louis Kealoha.

“Today, after years of manipulating the levers of justice to shroud their own crimes, justice was delivered to two corrupt public officials,” said U.S. Attorney Robert Brewer. “This was a flagrant and stunning abuse of power that victimized an entire community by undermining public confidence in its leaders and the rule of law. If not for the initial dogged investigation by former First Assistant Federal Defender Alexander Silvert, who brought this matter to the attention of federal authorities, followed by incredible work by FBI agents and prosecutors Michael Wheat, Joseph Orabona, Janaki Chopra and Colin McDonald, the Kealohas would still be manipulating justice, not meeting it.”

“Our citizens entrust public servants with great powers and authorities. It is our responsibility to serve our community with integrity and authenticity – with truth and justice as our hallmark,” said Special Agent in Charge Eli S. Miranda. “The Kealohas betrayed this trust for their own selfish entitlements, using deception and breaking the same laws they swore to uphold. The FBI will enthusiastically continue to investigate any corrupt public official who willfully and maliciously abuse their office.”

Today’s sentences also accounted for separate crimes committed by the Kealohas. In October 2019, Katherine pleaded guilty to misprision of a felony after using her position of authority within the city prosecutor’s office to actively conceal the drug distribution activities of her brother, Rudolph B. Puana, an anesthesiologist in Hawaii. In her plea agreement, Katherine admitted she arranged to have herself assigned as the prosecutor overseeing the investigation of her brother’s co-conspirators and that she cultivated a close relationship with one co-conspirator—a defendant Katherine was then prosecuting—to reduce the likelihood that the individual would reveal Rudolph Puana’s role in the drug conspiracy. “I always got ur back, I love you and will protect you always!!!” read one private text message Katherine sent to the defendant she was prosecuting. “GO TEAM!!! Can’t wait for this s*** to be over,” read another, to which the defendant replied, “Ditto[.] Then we’re free[.]”

Finally, in October 2019, the Kealohas pleaded guilty to bank fraud. As part of their pleas, the Kealohas admitted that between January 1, 2009 and December 31, 2014, they spent more than $591,000 derived from stolen funds or loan proceeds obtained through fraud. Their bank fraud scheme included falsely claiming assets that belonged to others (including money belonging to children over whom Katherine had been appointed guardian), falsely inflating their monthly income, and falsely denying derogatory information on their credit. To legitimize their denial of poor credit, the Kealohas submitted a forged police report in loan applications that purported to document Katherine’s false claims of identity theft. The act of forging the police officer’s signature on the report was itself identity theft, for which Katherine pleaded guilty. Katherine further admitted using an alias “Alison Lee Wong” to facilitate the bank fraud. This alias also played a role in Gerard Puana’s claims of fraud. As evidence at trial established, in 2009, Katherine used the “Wong” alias to notarize and create a fraudulent trust in Gerard’s name. And in 2008, under the customer name “Kathryn Aloha,” Katherine ordered a notary seal for “Alison Lee Wong” from the American Association of Notaries and had it mailed to the State of Hawaii’s Office of Environmental Quality Control, where Katherine served as Director. As Judge Seabright stated today, Katherine “perverted justice over and over and over and over again.”

The Kealohas’ co-conspirators, Derek Wayne Hahn and Bobby Nguyen, are scheduled to be sentenced on December 1, 2020 for their involvement in framing Gerard Puana. Katherine Kealoha’s brother, Rudolph B. Puana, is currently facing drug distribution and firearm charges, and is scheduled for trial in April 2021.

DEFENDANTS                               

Katherine P. Kealoha                          Age: 50                       Honolulu, Hawaii

Louis M. Kealoha                               Age: 60                       Honolulu, Hawaii

SUMMARY OF CONVICTIONS

Katherine Kealoha                          

CR No. 17-00582-JMS-WRP

Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371

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

Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)

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

CR No. 18-00068-JMS-WRP

Bank Fraud, in violation of 18 U.S.C. § 1344

Maximum Penalty: Thirty years in prison, $1 million fine

Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A

Maximum Penalty: Mandatory term of imprisonment of two years, to be served consecutive to the sentence imposed for any underlying charge; fine of up to $250,000

CR No. 19-00015 JMS-WRP

Misprision of Felony, in violation of 18 U.S.C. § 4

Maximum Penalty: Three years in prison; fine of up to $250,000;

Louis Kealoha                                  

CR No. 17-00582-JMS-WRP

Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371

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

Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)

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

CR No. 18-00068-JMS-WRP

Bank Fraud, in violation of 18 U.S.C. § 1344

Maximum Penalty: Thirty years in prison, $1 million fine

AGENCY

Federal Bureau of Investigation

Honolulu, Portland, and San Diego Divisions

Assistant U.S. Attorney Matthew J. Sutton (619) 546-8941

NEWS RELEASE SUMMARY - November 24, 2020

SAN DIEGO – Three Mexican nationals suspected of trafficking huge quantities of illicit drugs for the Sinaloa Cartel were charged in federal court today in connection with what is believed to be the largest single seizure of cash, narcotics and ammunition in this district.

Jesus Burgos Arias, Juan Alatorre Venegas, and Jose Yee Perez were arrested on November 20, 2020, as a result of a long-term joint investigation by the Drug Enforcement Administration, Homeland Security Investigations, the San Diego Sheriff’s Department, San Diego Police Department, and the U.S. Attorney’s Office for the Southern District of California, targeting associates of the Sinaloa Cartel.

In addition to the arrests, agents seized approximately $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 at a truck yard in Otay Mesa.

The defendants were charged with a drug trafficking conspiracy in a complaint filed in federal court. They will be transferred from the San Diego Central Jail to federal custody and will be scheduled to make their initial appearance before U.S. Magistrate Judge Barbara L. Major this week.

“This historic seizure and prosecution is a clear indication of the success of our joint investigative efforts,” said U.S. Attorney Robert Brewer. “To eradicate this threat to San Diego and our partners in the Republic of Mexico, we will continue to aggressively attack the Sinaloa Cartel’s drug smuggling, money laundering, and arms smuggling operations – depriving them of their illegal merchandise, their profits, and a safe haven.” Brewer praised prosecutor Matthew J. Sutton and the federal and local agents and officers for their excellent work on this case.

“Thanks to the collaborative work with our state and federal law enforcement partners, we are able to announce this blow to the Mexican Cartels operating in San Diego,” said DEA Special Agent in Charge John W. Callery.  “We are further encouraged that we were able to separate them from their dangerous .50 caliber ammunition and over $3 million in drug proceeds that they have gained through selling death here in our community and throughout the US.”

“This seizure is significant not just because of its size, but because it demonstrates the direct correlation between narcotics, illicit money, and guns that drives violence in our communities and destroys lives,” said Homeland Security Investigation (HSI) Special Agent in Charge Cardell T. Morant. “HSI will continue to work with our law enforcement partners and prosecutors to aggressively pursue the Sinaloa Cartel and other transnational criminal organizations.”

“The Sheriff's Department is committed in working with our justice partners throughout the region to combat the dangerous drugs and violence associated with narcotic trafficking,” said San Diego County Sheriff Bill Gore. “Sheriff's deputies see the destruction and damage that illegal drugs cause every day.  We are proud of what this case has accomplished, and the continued work being done to hold these criminals accountable.”

This case is part of a five-year investigation led by the Southern District of California, 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.

The investigation first 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) 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 United States is represented in court by Assistant U.S. Attorney Matthew J. Sutton.

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

Defendant Information

Defendant                                                                                    Criminal Case No: 20-mj-5099-BLM

Defendant Number

Name

Age

Hometown

1

Jesus Burgos Arias

32

Chula Vista, California

2

Juan Alatorre Venegas

44

Tijuana, Mexico

3

Jose Yee Perez

54

Tijuana, Mexico

Summary Of Charges

Conspiracy to Possess with Intent to Distribute a Controlled Substance, in violation of Title 21 U.S.C. §§ 841(a)(1) and 846. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine.

AGENCIES

Drug Enforcement Administration

Homeland Security Investigations

San Diego County Sheriff’s Department

San Diego Police Department

Border Crime Suppression Team

San Diego County District Attorney’s Office

Customs and Border Protection, Office of Field Operations

Customs and Border Protection, Office of Border Patrol

United States Marshals Service

Internal Revenue Service - Criminal Investigation

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

NEWS RELEASE SUMMARY – November 20, 2020

SAN DIEGO – Jonny Ngo, the former president and chief executive officer of NL Technology, LLC, was sentenced in federal court today to 75 months in prison for operating a $65 million Ponzi scheme that caused investors to lose over $20 million.  He was also ordered to pay $20,292,490.60 in restitution to the victims of his fraud. 

According to court filings, Ngo induced his victims to invest funds in various short-term investment contracts by making false representations, including that: (a) Investor money would be used to fund wholesale purchase orders of smartphone screens and other electronic goods; (b) NL Technology was a regular supplier of smartphone screens to a number of buyers, including two buyers who each ordered approximately $2 million of product from NL Technology; (c) All wholesale orders funded by investor money was pre-purchased by NL Technology clients; and (d) The quality of the products and safety of investor funds used to purchase the products were guaranteed by a third-party escrow company. 

In his plea agreement, Ngo admitted he created counterfeit invoices falsely indicating that NL Technology had substantial purchase orders from alleged wholesale companies. Ngo also provided false financial statements purportedly certified by an accountant showing NL Technology earned income from its wholesale business totaling $12.5 million in 2015 and $15.4 million in 2016.  Moreover, Ngo admitted he fabricated bank statements or screenshots from bank statements held in the name of NL Technology with individual line items altered to appear as legitimate wholesale business transactions.  Lastly, Ngo created false checks from wholesale companies allegedly doing business with NL Technology.   

According to court documents, Ngo told investors that they could roll over their investments into future investment contracts with NL Technology, when in fact no such future investments were possible.  Also, Ngo lulled investors about the continued viability of NL Technology through materially false representations, including that NL Technology had an outstanding purchase order from a smartphone repair company for approximately $300,000, when in fact, no such order existed. 

Instead of investing the funds in the business, Ngo admitted that he converted investor funds to his own personal use and benefit by spending the money on a home, luxury cars and gambling.  As a result of his investment fraud, Ngo caused more than $20 million in losses to investors in his Ponzi scheme.

During today’s sentencing hearing, U.S. District Judge Jeffrey T. Miller said that Ngo was “motivated by greed” to perpetrate a fraud that “was no mere mistake. This was calculated, broad in nature, deep in planning, and deadly in execution.” Judge Miller further noted that the victims “suffered a substantial loss and have had financial ruin, dreams dashed, fruits of a lifetime of labor dissipated, emotional distress, shame, shock, embarrassment, and emotional damage to last a lifetime.”

“Defendant Ngo preyed on his victims, cheated many of them out of their life savings, and caused a devastating impact on their personal and financial health,” said U.S. Attorney Robert Brewer. “Defendant Ngo destroyed the finances of many innocent and hardworking people. Today’s sentence sends a clear message to financial predators: The United States Attorney’s Office and our federal law enforcement partners will work tirelessly and relentlessly to unravel your fraud and bring you to justice.” Brewer praised prosecutor Joseph Orabona and agents with the Federal Bureau of Investigation and United States Postal Inspection Service for their outstanding work on this case.

FBI Special Agent in Charge Suzanne Turner said, “Ngo swindled and conned innocent investors out of their hard-earned money to support his lavish lifestyle. The false representations about wholesale purchase orders worth millions and supporting phony business records were all lies. Ngo's actions serve as an example of the unconscionable greed that fuels these all too common fraud cases. The FBI is committed to investigating those who prey upon trusting individuals for their own personal gain. We ask anyone who has information related to investor fraud submit a tip at https://tips.fbi.gov/.”

“Today’s sentencing sends a clear message to scammers who prey upon the public,” stated Postal Inspector in Charge Melisa Llosa. “The Postal Inspection Service has zero tolerance for those who use the nation’s mail system to commit fraud. Postal Inspectors will aggressively investigate these cases with our law enforcement partners to bring the scammers to justice.”

DEFENDANT                                                           Case Number: 19CR1391-JM                                

Jonny Ngo                               Age: 34                       San Diego, CA

SUMMARY OF THE CHARGE

Title 18, United States Code, Section 1341 – Mail Fraud

Maximum Penalties: Twenty years in prison, $250,000 fine, three years of supervised release

AGENCIES

Federal Bureau of Investigation

United States Postal Inspection Service

 

NEWS RELEASE SUMMARY – November 19, 2020

SAN DIEGO – Ramon Santoyo-Cristobal, aka Dr. Wagner, a former Mexican Federal Police officer and alleged Sinaloa Cartel drug trafficker, was extradited to the United States from Italy yesterday.

On August 19, 2016, a federal grand jury sitting in the Southern District of California returned an indictment charging Santoyo-Cristobal with participating in a long-running worldwide conspiracy to traffic substantial quantities of methamphetamine, cocaine, and heroin from Mexico into the United States, as well as laundering millions of dollars in drug proceeds.

A fugitive for almost three years, Santoyo-Cristobal was apprehended by Italian authorities in August 2019 while visiting Rome. Santoyo-Cristobal contested extradition in the Italian courts,   but in July 2020, the Supreme Court of Cassation rejected his arguments, and the following month the Ministry of Justice authorized his extradition to the United States. He arrived in San Diego on November 18, 2020, and made his initial appearance today before U.S. Magistrate Judge Andrew Schopler. He is scheduled for a detention hearing before Judge Schopler on November 24, 2020 at 10:30 a.m.

“This extradition ruling by the Italian courts demonstrates that those who violate U.S. laws and seek to evade justice will find no place to hide,” said U.S. Attorney Robert Brewer. “The Department of Justice appreciates the cooperation of the Italian authorities in this matter. With the assistance of our law enforcement colleagues at home and around the world, we will aggressively pursue every avenue available in bringing drug traffickers to justice.” Brewer praised prosecutor Matthew J. Sutton and DEA agents for their excellent work on this case.

“DEA and our law enforcement partners will continue to use all available resources to bring drug traffickers to justice,” said DEA Special Agent in Charge John W. Callery. “This extradition should serve as a warning to other members of the Sinaloa Cartel: we will find you no matter where in the world you try to hide and we will bring you back to the United States for prosecution.”

The U.S. Attorney’s Office for the Southern District of California and the Drug Enforcement Administration led the United States’ extradition effort. The Justice Department extends its gratitude to the Italian Ministry of Justice, and prosecutorial and law enforcement authorities for making the extradition possible. The Criminal Division’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from Italy. The U.S. Marshals Service assisted in bringing the defendant back to the United States.

This case is part of a five-year investigation led by the Southern District of California, 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 prosecution is also 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 United States is represented in court by Assistant U.S. Attorney Matthew J. Sutton.

The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Defendant Information

 

Defendant Number: 4                                                                  Criminal Case No: 16-cr-1896-DMS

Name: Ramon Santoyo-Cristobal, aka Dr. Wagner

Age:  44

Hometown: Mexico City, 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.

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.

Conspiracy to Launder Monetary Instruments, in violation of Title 18 U.S.C. 1956(h). Term of custody up to 20 years in prison, a fine of $500,000 or twice the value of the monetary instrument or funds involved.

AGENCIES

Drug Enforcement Administration

Customs and Border Protection, Office of Field Operations Customs and Border Protection, Office of Border Patrol United States Marshals Service

Internal Revenue Service

Department of Justice, Organized Crime Drug Enforcement Task Forces Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

Assistant U. S. Attorneys John Parmley (619) 546-7957 and Jonathan Shapiro (619) 546-8225

NEWS RELEASE SUMMARY – November 19, 2020

SAN DIEGO – Rudy Alvarez of Lemon Grove was convicted by a federal jury late yesterday for knowingly aiming the beam of a laser pointer at a San Diego Police helicopter as the aircraft flew over a protest in the wake of George Floyd’s death in Minneapolis.

After a two-day trial, the jury deliberated for 2.5 hours before rendering its verdict. Alvarez is scheduled to be sentenced on February 22 at 9 a.m. before Chief U.S. District Judge Larry Burns.

“This is a very important verdict,” said U.S. Attorney Robert Brewer. “This kind of crime could have a disastrous impact if a pilot’s sight is compromised. We support the Constitutional rights of free speech and assembly, but the rule of law must be respected. It’s there for a reason – to protect the public and law enforcement from danger.” Brewer praised prosecutors John Parmley and Jonathan Shapiro as well as San Diego police officers and detectives and agents from the FBI for their diligence in seeking justice.

“The guilty verdict returned in this case is a reminder that using a laser pointer as a weapon against aircraft is a federal crime and offenders will face justice,” said FBI Special Agent in Charge Suzanne Turner.  “The FBI will continue to protect the public and pilots from the dangerous actions of those intentionally using lasers pointers to cause harm.”

The incident occurred at a large demonstration that passed through the area of 500 University Avenue in San Diego on June 4 at 8:30 p.m. Two officers from the San Diego Police Department’s Air Support Unit were monitoring the crowd in a marked San Diego Police Department helicopter. The officers reported that one of the demonstrators in the crowd was shining a laser at their aircraft that threatened their ability to safely operate the helicopter.

The San Diego police officers were able to locate the man who pointed the laser at the helicopter multiple times over the course of an hour as he marched with the protestors in downtown San Diego.

DEFENDANT                                               Case Number 20cr1809                                           

Rudy Alvarez                                                  Age: 25                       Lemon Grove

SUMMARY OF CHARGES

Aiming a Laser Pointer at an Aircraft – Title 18, United States Code, Section 39A

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

AGENCIES

San Diego Police Department

Federal Bureau of Investigation

 

Assistant U. S. Attorney Cindy Cipriani (619) 546-9408   

NEWS RELEASE SUMMARY – November 13, 2020

SAN DIEGO – Attorney General William P. Barr has announced the recipients for the 68th Annual Attorney General’s Awards, recognizing Department of Justice employees and partners for extraordinary contributions to the enforcement of our nation’s laws.

Of the 267 recipients, 240 DOJ employees received awards while 27 non-department individuals are also being honored for their work. This year, due to coronavirus restrictions, Attorney General Barr is honoring recipients virtually.

“I am honored to recognize the recipients of this year’s Attorney General’s Awards, whose tireless work and steadfast dedication have proven critical to enforcing the rule of law and protecting all Americans,” said Attorney General William P. Barr. “Those honored have demonstrated exceptional efforts and made tremendous personal sacrifices throughout their time working at the Department of Justice, and for that, I am truly thankful.”

In San Diego, David Leshner and Todd W. Robinson were awarded the John Marshall Award in the Trial of Litigation category. The John Marshall Awards are the highest DOJ awards offered to attorneys, recognizing extraordinary contributions and excellence in specialized areas of legal performance. Thirteen awards in nine categories are being presented this year.

Leshner and Robinson were recognized for successfully trying and convicting multiple defendants who murdered U.S. Border Patrol Agent Brian Terry. Over a 10-year period, Leshner and Robinson doggedly and successfully sought justice for the family of Agent Terry, who was murdered in 2010 by an armed group of illegal alien bandits. Due to the staggered extradition of the defendants responsible for the murder of Agent Terry, Leshner and Robinson successfully conducted two lengthy and high-stakes trials, obtaining convictions and life sentences for those responsible for Agent Terry’s death.

“These are two of the finest lawyers in our district, a fact that is demonstrated by their high level leadership positions in this office,” said U.S. Attorney Robert Brewer. “David Leshner currently serves as our Criminal Division Chief, and Todd Robinson was a highly regarded Senior Litigation Counsel before the Senate confirmed him as a U.S. District Court judge on September 16, 2020.  Their work on this case exemplifies the best of what DOJ stands for: honor, integrity, professionalism, skill and the wholehearted dedication to seeking justice for a fallen law enforcement officer.”

For a list of all recipients, please see https://www.justice.gov/opa/pr/attorney-general-william-p-barr-honors-department-justice-employees-and-others-68th-annual.

 

 

 

Assistant U.S. Attorney Mark W. Pletcher (619) 546-9714

NEWS RELEASE SUMMARY – November 9, 2020

SAN DIEGO – Self-christened campaign guru Ravneet (“Ravi”) Singh was re-sentenced in federal court today to one year in prison for conspiring with Mexican billionaire Susumo Azano to make almost $600,000 in illegal political contributions to candidates Bonnie Dumanis and Bob Filner in the 2012 San Diego mayoral campaign in an effort to buy “a friend in the Mayor’s office.”

U.S. District Judge Michael M. Anello also ordered Singh to pay a $10,000 fine. Singh’s re-sentencing brings to a successful end this long-running investigation into corruption in local San Diego politics. 

“Today’s sentence once again stands testament to the resolve of the FBI, the IRS, and the U.S. Attorney’s Office to safeguard San Diego politics against those who attempt to illegally undermine the fundamental principles of American democracy,” said Executive U.S. Attorney Linda Frakes. “Today, more than ever, the integrity of our election system matters and attempts to illegally manipulate it will be punished.”

“Public corruption and campaign finance fraud undermines the strength and confidence in our system of government which is why these cases have always been a top criminal priority for the FBI,” said Special Agent in Charge Suzanne Turner. “The American people can count on the FBI to continue to expose those, like Azano and Singh, who attempt to illegally influence American political processes and bring them to justice.”

In September 2016, after six weeks of trial and five days of deliberations, a federal jury in San Diego returned guilty verdicts against Azano and Singh as well as Azano’s son, Edward Susumo Azano Hester.

According to evidence presented at trial, Azano, Singh, and others conspired to inject hundreds of thousands of dollars in cash and in-kind consulting services to the Dumanis and Filner campaigns, despite the fact that Azano’s foreign national status made such contributions illegal. To conceal his connection to these contributions, Azano arranged with Singh, his son Edward Hester, and others to funnel this illegal foreign money through corporate and third person “straw donor” contributions.

In return for his money, Azano sought to buy political influence and support for his vision: “Miami West” – a San Diego waterfront development project with a yacht marina, a branded five-star hotel and luxury bayside condominiums, a development project that promised Azano hundreds of millions in profit. Azano also demanded access, like the ability to summon influential political figures to his home on a moment’s notice or to obtain letters of reference to secure his son’s admission to the University of San Diego.

According to testimony at trial, Azano’s illegal money harnessed by Singh in an effective Internet fusillade made the difference in electing Bob Filner as Mayor. Within weeks after the election, with the Mayor squarely in his pocket, Azano met in London with renowned, Middle East-based master developers to refine his plans for “Miami West.” A month after the election, Azano invited the developers to fly halfway around the globe to meet with him and Mayor Filner about the Miami West project, and just four days after Filner’s inauguration, that meeting occurred, catered by Nobu, at Azano’s Coronado Cays mansion. 

Filner resigned six months later amid allegations of sexual misconduct.

Azano and Singh were initially sentenced in 2017 to incarceration periods of 36 months and 15 months.  After multiple lengthy appeals to the Ninth Circuit Court of Appeals and a petition for review at the Supreme Court, which invalidated their convictions on one of the 36 counts charged in the indictment, Judge Anello re-sentenced Azano in 2019 to the same sentence of 36-months in prison. Today, Judge Anello sentenced Singh to a 12-month sentence. Singh was ordered to report to prison on January 11, 2021.  

In addition to Azano, Singh, and Hester, local car dealer Marc Chase, his company South Beach Acquisitions, consultant Marco Polo Cortes, and former police detective Ernesto Encinas were also convicted of various campaign fraud-related offenses as part of this long-running investigation.

Executive U.S. Attorney Linda Frakes specially commended all the law enforcement agents and agencies who rigorously pursued this matter since its inception through its conclusion.

DEFENDANT                                   Case Number: 14CR0388-MMA 

Ravneet Singh                                     Age:  48          Coral Springs, FLA

SUMMARY OF CONVICTIONS

Count 1: Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Sec. 371.

Maximum Penalties: Up to five years in prison and $250,000 fine

Count 3: Donation and Contribution by a Foreign National Aggregating $25,000 or more – Title 2, U.S.C., Secs. 437g (d) (1) (A) (i) and 441e (A) (1).

Maximum Penalties: Up to five years in prison and $250,000 fine

Counts 32: Falsification of Records – Title 18, U.S.C., Sec. 1519.

Maximum Penalties: Up to 20 years in prison per count and $250,000 fine per count.

AGENCIES

Federal Bureau of Investigation

Internal Revenue Service, Criminal Investigation

San Diego Police Department

Geraldine Hill and Clayton Hill, a California couple who operated a charity that purported to provide goods to the needy, were sentenced to prison for conspiracy to commit mail fraud and tax evasion. Geraldine Hill was sentenced to 15 months in in prison, and Clayton Hill was sentenced to 9 months in prison, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Robert S. Brewer, Jr. for the Southern District of California.

According to court documents and statements made in court, the Hills operated On Your Feet (OYF), also known as the Family Resource Center, a tax-exempt charitable organization whose stated mission was to provide assistance to low income families and individuals in need. From 2011 through 2016, the Hills fraudulently obtained more than $1.35 million in donated clothing and other items for OYF by falsely representing to the donors that the items would be given to needy recipients. In fact, the Hills caused OYF to make only about $13,000 in charitable donations, and then sold the remaining donated items, and used the proceeds to support themselves and their family members. Between January 2011 and February 2017, the Hills spent nearly $380,000 from their personal and charity bank accounts on personal expenses including some luxury retail purchases, vacations, entertainment, and vehicles. To conceal their conduct from the IRS, the Hills filed false charitable tax returns for OYF, and did not pay taxes or file personal tax returns for 2013 and 2014.

“The defendants defrauded the IRS and companies that donated goods in an effort to alleviate poverty and suffering among the least fortunate,” said Principal Deputy Assistant Attorney General Zuckerman. “The Tax Division is committed to investigating and prosecuting those individuals who seek to use the cover of a charity to illegally line their own pockets.”

“Geraldine and Clayton Hill lied to unsuspecting donors about the direction of charitable contributions and engaged in tax fraud to cover their trail,” said Jim Lee, Chief of IRS Criminal Investigation. “Unfortunately, the donors were well-meaning organizations interested in helping the needy and this fraud prevented real people in need from receiving assistance. IRS Criminal Investigation works tirelessly to ensure that criminals like the Hills are brought to justice. In cases like these, not only do the needy of our communities suffer, but also taxpayers and the U.S. government.”

On June 9, 2020, the Hills pleaded guilty to conspiracy to commit mail fraud and tax evasion.

In addition to the terms of imprisonment, U.S. District Judge Dana M. Sabraw ordered the Hills to serve three years of supervised release, and to pay $50,933 in restitution to the United States for their tax evasion. A hearing to address victim restitution for the mail fraud will take place at later date.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Brewer commended special agents of the IRS-Criminal Investigation Division and the FBI, who conducted the investigation, and Trial Attorney Valerie Preiss of the Tax Division and Assistant U.S. Attorney Rebecca Kanter, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Assistant U.S. Attorney Rebecca S. Kanter (619) 546-7304

NEWS RELEASE SUMMARY – November 6, 2020

SAN DIEGO – A Bonita husband and wife were sentenced in federal court today to 9 months and 15 months, respectively, in prison for using their charity to obtain donations from various companies – supposedly to give to the needy - and then selling those donations for a profit and failing to pay taxes on the profits.

According to plea agreements, Geraldine and Clayton Hill admitted they used lies and false promises to induce prominent companies to donate valuable goods to the Hills’ 501(c)(3) tax-exempt non-profit organization, known as On Your Feet, Inc., also known as Family Resource Center.  Instead of using all the clothing and other donations to help the down-on-their luck get back on their feet, as their charity’s name suggested, or to provide resources for families, the Hills brazenly sold many donated goods  for cash to be resold at discount outlets, and pocketed the proceeds.  By preying on the generosity of others, they managed to get valuable goods at no cost and tax-free, which they resold for their personal benefit. What is more, the Hills used the tax-exempt charity as their personal bank account and evaded their own tax obligations, cheating the IRS by failing to pay over $50,000 in taxes on over a million dollars in ill-gotten gains from their fraud. 

According to court documents, On Your Feet, Inc. claimed to “provid[e] assistance to low-income families and individuals in need to better their living conditions and quality of life.” Beginning at least as early as March 2009, however, the Hills conspired to fraudulently obtain charitable donations of clothing and other items from multiple companies by falsely promising and certifying that they would not to sell the merchandise for profit. The Hills violated those promises, knowingly reselling donated merchandise and using the proceeds from selling donated items to financially support themselves, their family members and other associates.

The Hills tricked multiple companies, including Forever 21, Feed the Children, Brooks Sports and Goods360, into donating millions of dollars of goods to their so-called charity.  For example, in soliciting donations from Forever 21, the Hills falsely claimed in their marketing materials that “[t]he merchandise is never sold by On Your Feet Incorporated and any merchandise impossible to sell is disposed of.” In an email on May 20, 2015, to Forever 21, Geraldine Hill explained that the “routine for processing donated items” included “cutting [the] inside label in half” and “defacing [the] inside label with permanent marker,” and falsely insisted that “we’ve never had a problem with any donations we have received that companies have been so kind to donate.”  In fact, Geraldine Hill knew at the time she sent that email to Forever 21 that her statement was a lie, because at least three years earlier, she had learned that Disney no longer wanted its donations to go to On Your Feet because the donated goods were appearing at local flea markets for sale. 

In reliance on Ms. Hill’s false promises that the goods would not be re-sold, in June 2015, Forever 21 donated to On Your Feet approximately 161 pallets of clothing, which Forever 21 estimated had a retail value of $5.6 million. Immediately upon receiving the pallets from Forever 21, the Hills sold the donated goods to an operator of for-profit discount retailers. In September 2016, the Hills solicited additional donations from Forever 21 by promising to use them for a “Christmas Giveaway,” and in response, in October Forever 21 donated another 16 pallets of clothing with a retail value of $314,371. Once again, immediately upon receiving the pallets from Forever 21, the Hills sold donated goods to the same for-profit discount retailer. Based on the Hills’ series of false representations, Feed the Children and Forever 21 – just two of the Hills’ multiple victims – donated over $16 million in goods between 2010 and 2017.

With their repeated lies, between 2011 and 2016, the Hills personally received proceeds from the fraud totaling over $1.3 million. They spent the money on personal expenses including luxury retail purchases, vacations, entertainment, vehicles (including a $124,000 Mercedes), rent on a seven-bedroom, seven-bathroom home, and donations to their church. In their plea agreements, they admitted that they paid no taxes on their illegal gains. 

The Hills further exploited their non-profit organization to cheat in other ways.  For example, they falsified pay stubs claiming that defendant Clayton Hill earned a salary of over $100,000 from On Your Feet (even though the organization had never issued paystubs or W2s to Hill, and Hill was not claiming income in any tax filing).  Armed with the phony pay stubs to demonstrate their income, the Hills applied to rent a seven-bedroom, seven-bathroom home that cost $6,000 per month.     

In order to conceal their true income from the IRS and obstruct the IRS’s ability to monitor the charity’s tax-exempt status, the Hills filed false charitable tax returns. The charity’s tax returns falsely claimed that On Your Feet received less than $25,000 in gross receipts in tax year 2009, and less than $50,000 in tax years 2011-2015.  In reality, the organization had received millions of dollars in valuable in-kind donations, and hundreds of thousands of proceeds from the unauthorized sale of those donations.  By hiding the non-profit’s income, the Hills were able to hide their own income. As a result of the Hills’ fraudulent concealment of their income, they avoided paying $50,933 in tax years 2013 and 2014.

In addition to their prison sentences, the Hills were ordered to pay $50,933 in restitution to the IRS; a further restitution hearing related to the donor victims is scheduled for December 11, 2020.

“Geraldine and Clayton Hill abused the generosity of charitable donors and used their non-profit charity organization as their personal bank account,” said U.S. Attorney Robert Brewer “Although all tax evasion is serious, the conduct by the Hills is particularly offensive because they have undermined the faith of donors in charitable giving.” Brewer commended Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Valerie Preiss of the Justice Department’s Tax Division, as well as agents from the IRS and FBI for their excellent work on this case.

“The Hills’ fraudulent scheme undermined legitimate charities with true intent to benefit low income families in order to satisfy their personal greed and an indulgent lifestyle,” said Suzanne Turner, Special Agent in Charge of FBI San Diego. “The FBI is hopeful that this sentence will send a message to anyone who would try to take advantage of the generosity of donors intending to help those in need.”

“Geraldine and Clayton Hill lied to unsuspecting donors about the direction of charitable contributions and engaged in tax fraud to cover their trail,” said Jim Lee, Chief of IRS Criminal Investigation. “Unfortunately, the donors were well-meaning organizations interested in helping the needy and this fraud prevented real people in need from receiving assistance. IRS Criminal Investigation works tirelessly to ensure that criminals like the Hills are brought to justice. In cases like these, not only do the needy of our communities suffer, but also taxpayers and the United States government.”

This case was prosecuted by Assistant U.S. Attorney Rebecca Kanter and Special Assistant U.S. Attorney Valerie Preiss.  

DEFENDANTS                                            Case Number 20CR0783-DMS                              

Geraldine Hill                                                 Age: 60                                   Bonita, CA

Clayton Hill                                                    Age: 59                                   Bonita, CA

SUMMARY OF CHARGES

Conspiracy to Commit Mail Fraud – Title 18, U.S.C., Section 371

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

Tax Evasion – Title 26, U.S.C., Section 7201

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

AGENCIES

Internal Revenue Service Criminal Investigations

Federal Bureau of Investigation

 

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

NEWS RELEASE SUMMARY –November 5, 2020

SAN DIEGO – A federal jury has found Veronica Perez of Hemet, California, guilty of smuggling an unregistered Mexican pesticide into the United States.

After a three-day trial, the jury found that Perez concealed twenty containers of Fosfuro de Zinc (zinc phosphide) in her purse, and failed to declare them at the border when she attempted to cross into the United States from Mexico on July 11, 2019. The jury returned its verdict late yesterday.

According to the EPA, zinc phosphide is an extremely toxic rodenticide, and the ingestion of small amounts can cause death in animals and humans. In fact, consumption of a single bait zinc phosphide pellet can be lethal to a small bird or mammal. Ingestion of seven drops to one 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. Phosphine gas is extremely toxic and damages the heart, brain, kidney, and liver.

“There’s a reason these toxic chemicals are restricted in the United States,” said U.S. Attorney Robert Brewer. “This verdict serves as a warning that violators will be prosecuted as part of our best effort to protect people and the environment from deadly pesticides.” Brewer commended prosecutors Melanie Pierson and Steve DaPonte, and federal agents with Homeland Security Investigations and the U.S. Environmental Protection Agency, Criminal Investigations Division, for their excellent work to achieve justice in this matter.

“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-CID, CBP, 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 verdict in this case demonstrates that individuals who intentionally violate smuggling and environmental protection laws will be held responsible for their crimes.”

This case was prosecuted by Assistant U.S. Attorney Melanie Pierson from the Southern District of California and Special Assistant U.S. Attorney Steve DaPonte of the Department of Justice Environmental Crimes Section.

DEFENDANT                                               Case Number 20cr869-DMS                                               

Veronica Perez                                                Age: 40                                   Hemet, CA

SUMMARY OF CHARGES

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

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

AGENCY

Homeland Security Investigations

U.S. Environmental Protection Agency, Criminal Investigations Division

 

Assistant U. S. Attorney Cindy Cipriani (619) 546-9608    

NEWS RELEASE SUMMARY – November 3, 2020

SAN DIEGO – U.S. Attorney Robert S. Brewer today announced that Social Advocates for Youth, San Diego Inc. (“SAY”) has received a $488,495 Department of Justice grant to fight and prevent violent crime in the Southern District of California. The grant, awarded by the Department’s Office of Justice Programs, is part of more than $458 million in funding to support state, local and tribal law enforcement efforts to combat violent crime in jurisdictions across the United States.

“One of the fundamental missions of government is to protect its citizens and safeguard the rule of law,” said Attorney General William P. Barr. “The Department of Justice will continue to meet this critical responsibility by doing everything within its power to help our state, local and tribal law enforcement and criminal justice partners fight crime and deliver justice on behalf of all Americans.”

“This grant to SAY will support comprehensive intervention strategies (including mentoring, restorative circles and emotional literacy education), that both dissuade youth from joining gangs and help them escape if they are already entrenched in the lifestyle,” said U.S. Attorney Brewer. “It is programs like this that can pull kids from the clutches of gangs and put them on a path to a better life.”

With this money, Social Advocates for Youth will implement project REJUVENATE, a comprehensive intervention program to reduce violence and gang involvement among youth living in opportunity zones in San Diego. This program will employ prevention and intervention strategies that address individual, family, and community factors that contribute to gang activities. In partnership with Project Aware and Union of Pan Asian Communities, SAY will serve 192 high-risk youth and reach 3,000 youth ages 12–17. The program will seek to reduce gang involvement by 80 percent for participants by providing work experience, life skills, and counseling. SAY will increase rates of participants in alcohol and drug education, intervention and referral for treatment, and increase community connectedness. Activities include employment training, restorative talk circles, counseling, and the development of a youth-led task force.

The funding announced today continues the Trump Administration’s commitment to reducing crime and improving public safety. In the two years before President Trump took office, America had experienced a precipitous rise in crime, particularly in serious violent crime. The President elevated community safety to the top of his domestic agenda and crime rates have fallen steadily since. Recent data from the FBI and the Bureau of Justice Statistics for 2019 show a drop in crime and serious victimization for the third year in a row. However, a number of cities are experiencing conspicuous countertrends. Today’s grants will bolster crime-fighting efforts in those communities and in jurisdictions throughout the United States.

“Violence has become a tragic reality in too many of America’s communities,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “Working with officials across the Trump Administration and with thousands of state, local and tribal crime-fighters across the country, the Department of Justice is leading the response to this urgent challenge. OJP is pleased to make these resources available to support innovative, tested and diverse solutions to violent crime.”

Of the more than $458 million awarded nationwide, OJP’s Bureau of Justice Assistance made 1,094 grants totaling more than $369 million to support a broad range of initiatives, including efforts in enforcement, prosecution, adjudication, detention and rehabilitation.

OJP’s Office of Juvenile Justice and Delinquency Prevention awarded more than $10 million across 24 jurisdictions to intervene in and suppress youth gang activity as well as $1 million to the Institute for Intergovernmental Research to continue operating the National Gang Center. OJP’s National Institute of Justice awarded $7.8 million to fund research and evaluation on the prevention and reduction of violent crime. OJP’s Bureau of Justice Statistics provided more than $69 million to strengthen the quality and accessibility of records within the National Instant Criminal Background Check System.

For a complete list of individual grant programs, award amounts, and jurisdictions that will receive funding, click here. More information about OJP and its components can be found at www.ojp.gov.

Assistant U. S. Attorney Christopher P. Tenorio (619) 909-7556    

NEWS RELEASE SUMMARY – November 2, 2020

SAN DIEGO – In anticipation of the upcoming general elections, the U.S. Department of Justice is providing detailed information about its particular efforts, through the Criminal Division, Civil Rights Division, and National Security Division, to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation, or fraud in the election process.

“We are prepared to address any Election Day issues that arise,” said U.S. Attorney Robert Brewer. “Voters should feel confident that local, state and federal law enforcement officials are committed to making sure they will be able to vote safely, and without interference or discrimination.”

Criminal Division and the U.S. Attorney’s Office:

The department’s Criminal Division oversees the enforcement of federal laws that criminalize certain forms of election fraud and vindicate the integrity of the federal election process. The Criminal Division’s Public Integrity Section and the department’s U.S. Attorney’s Offices, including U.S. Attorney Robert Brewer in the Southern District of California, are responsible for enforcing the federal criminal laws that prohibit various forms of election fraud, such as destruction of ballots, vote-buying, multiple voting, submission of fraudulent ballots or registrations, and alteration of votes, and malfeasance by postal or election officials and employees.  The Criminal Division is also responsible for enforcing federal criminal law prohibiting voter intimidation for reasons other than race, color, national origin, or religion (as noted below, voter intimidation that has a basis in race, color, national origin, or religion is addressed by the Civil Rights Division).

The U.S. Attorney’s Offices around the country have designated Assistant U.S. Attorneys to serve as District Election Officers (DEOs) in the respective Districts. DEOs are responsible for overseeing potential election-crime matters in their Districts, and for coordinating with the department’s election-crime experts in Washington, D.C.  In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Brewer has designated AUSA/DEO Christopher Tenorio to remain on duty while the polls are open. The public can reach him at (619) 909-7556.

From now through Nov. 3, 2020, the U.S. Attorney’s Offices will work with specially trained FBI personnel in each district to ensure that complaints from the public involving possible election fraud are handled appropriately.  Specifically:

•        In consultation with federal prosecutors at the Public Integrity Section in Washington, D.C., the District Election Officers in U.S. Attorney’s Offices, FBI officials at headquarters in Washington, D.C., and FBI special agents serving as Election Crime Coordinators in the FBI’s 56 field offices will be on duty while polls are open to receive complaints from the public.

•        Election-crime complaints should be directed to the local U.S. Attorney’s Offices or the local FBI office.  The FBI will have special agents and an Election Crimes Coordinator available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses. The public can contact the San Diego FBI at (858) 320-1800. The public may also contact the Department of Justice’s Civil Rights Division in Washington, D.C. at (800) 253-3931 or (202) 307-2767, or by complaint form at https://civilrights.justice.gov/

•        DOJ’s Public Integrity Section prosecutors are available to consult and coordinate with the U.S. Attorney’s Offices and the FBI regarding the handling of election-crime allegations.

All complaints related to violence, threats of violence, or intimidation at a polling place should be reported first to local police authorities by calling 911; after alerting local law enforcement to such emergencies by calling 911, the public should contact the department.

The U.S. DOJ Civil Rights Division:

The department's Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote, and with the criminal provisions of federal statutes prohibiting discriminatory interference with that right.

The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including:  the Voting Rights Act; the Uniformed and Overseas Citizens Absentee Voting Act; the National Voter Registration Act; the Help America Vote Act; and the Civil Rights Acts.  Among other things, collectively, these laws:

•        Prohibit election practices that have either a discriminatory purpose or a discriminatory result on account of race, color, or language minority status;

•        Prohibit intimidation of voters;

•        Provide that voters who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice (other than agents of their employer or union);

•        Provide for accessible voting systems for voters with disabilities;

•        Provide for provisional ballots for voters who assert they are registered and eligible, but whose names do not appear on poll books;

•        Provide for absentee voting for absent uniformed service members, their family members, and U.S. citizens living abroad; and

•        Provide for covered States to offer citizens the opportunity to register to vote through offices that provide driver licenses, public assistance, and disability services, as well as through the mail; and to take steps regarding maintaining voter registration lists.

The Civil Rights Division’s Disability Rights Section enforces the Americans with Disabilities Act (ADA) that prohibits discrimination in voting based on disability.

The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and vote suppression based on race, color, national origin, or religion.

On Election Day, Nov. 3, 2020, the Civil Rights Division will implement a comprehensive program to help ensure the right to vote that will include the following:

•        The Civil Rights Division will conduct monitoring in the field under the federal voting rights statutes.

•        Civil Rights Division attorneys in the Voting, Disability Rights, and Criminal Sections in Washington, D.C., will be ready to receive complaints of potential violations relating to any of the statutes the Civil Rights Division enforces.  Attorneys in the division will coordinate within the Department of Justice and will take appropriate action concerning these complaints before, during, and after Election Day.

•        Individuals with complaints related to possible violations of the federal voting rights laws can call the department’s toll-free telephone line at 800-253-3931, and also can submit complaints through a link on the department’s website, at https://civilrights.justice.gov/.•        Individuals with questions or complaints related to the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or submit a complaint through a link on the department’s ADA website, at ada.gov.

•        Once again, complaints related to violence, threats of violence, or intimidation at a polling place should always be reported immediately to local authorities by calling 911.  They should also be reported to the department after local authorities are contacted.

The U.S. DOJ National Security Division:

The department's National Security Division supervises the investigation and prosecution of cases affecting or relating to national security, including any cases involving foreign interference in elections or violent extremist threats to elections.  In this context:

•        The National Security Division’s Counterintelligence and Export Control Section oversees matters involving a range of malign influence activities that foreign governments may attempt, including computer hacking of election or campaign infrastructure; covert information operations (e.g., to promulgate disinformation through social media); covert efforts to support or denigrate political candidates or organizations; and other covert influence operations that might violate various criminal statutes.

•        The National Security Division’s Counterterrorism Section oversees matters involving international and domestic terrorism and supports law enforcement in preventing any acts of terrorism that impact Americans, including any violent extremism that might threaten election security.

As in past elections, on Nov. 3, 2020, the National Security Division will work closely with counterparts at the FBI and our U.S. Attorney’s Offices to protect our nation’s elections from any national security threats.  In particular, attorneys from both sections will be partnered with FBI Headquarters components to provide support to U.S. Attorney’s Offices and FBI Field Offices to counter any such threats.  Again, complaints related to violence, threats of violence, or intimidation at a polling place should always be reported immediately to local authorities by calling 911 and, after local authorities are contacted, then should also be reported to the department.

Both protecting the right to vote and combating election fraud are essential to maintaining the confidence of all Americans in our democratic system of government.  The department encourages anyone with information suggesting voting rights concerns or ballot fraud to contact the appropriate authorities, and notes in particular that the Department of Homeland Security plays its own important role in safeguarding critical election infrastructure from cyber and other threats.

NEWS RELEASE SUMMARY – October 30, 2020

SAN DIEGO – Jeffrey John Lenhof was sentenced in federal court today to 7 years in federal prison for receipt of child pornography.

Lenhof first came to the attention of law enforcement when Homeland Security Investigations (HSI) Agents discovered that files of child pornography had been made available from Lenhof’s residence, from as early as March 2017, via a peer-to-peer file sharing program that is easily accessible on the internet.

A federal search warrant was executed at Lenhof’s residence on April 30, 2019. Agents found that three computers, as well as an iPhone and an SD card seized from Lenhof’s residence, contained child pornography, or had been used to download or view child pornography.

Lenhof was charged with federal child pornography offenses, and pleaded guilty in December 2019 to having received child pornography. During the course of the investigation, Agents also discovered on

devices seized from Lenhof’s residence multiple videos which appeared to have been taken with hidden cameras, both in Lenhof’s residence and in other locations. One of those videos showed an adult man setting up a camera in a small bathroom. After the man exited the bathroom, what appeared to be a young teenaged girl entered the bathroom, undressed, and showered. After the girl exited the bathroom, the man could be seen returning to the bathroom to retrieve the camera.

Witnesses later confirmed that the video was taken in approximately 2009 in Lenhof’s home, that Lenhof is the man seen in the video setting up and retrieving the camera, that the girl in the video was 13 or 14 years old at the time the video was taken, and that the girl did not know she was being recorded. Agents seized a hidden camera from the residence at the time of the April 30, 2019, search warrant. After discovering this video, HSI agents executed a second search warrant at Lenhof’s residence on May 14, 2019, at which time agents seized three additional hidden cameras.

At the sentencing hearing, the U.S. District Court Judge Jeffrey Miller noted that child pornography offenses represent "one of the most serious and egregious forms of crimes" and that Lenhof’s non-consensual videorecording of women, including of the girl in his home, "speak to a pattern of conduct that became very troubling."

"Sexual crimes against children are heinous and tragic, and we will protect vulnerable victims whenever possible," said U.S. Attorney Robert Brewer. "We are focused on disrupting and dismantling these vile networks of predators who exploit children and share images online. Today is one more productive step in that direction." Brewer commended the excellent work of prosecutor Janet Cabral and HSI agents on this case.

"Today’s sentencing highlights the hard work of our agents and the U.S. Attorney’s Office to take a child predator offline, and should serve as a warning to others who perpetuate the exploitation of children," said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). "Every one of the images and movies Lenhof produced and possessed was created at the expense of an innocent child, and sending criminals like Lenhof to jail will continue to be a top priority for HSI."

Following his release from federal prison, Lenhof will be on federal supervised release for a period of 10 years. During that time, Lenhof will be required to comply with special conditions, including conditions prohibiting him from having contact with minors and accessing the internet.

This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section of the U.S. Attorney’s Office. Formed in 2019, by U.S. Attorney Robert 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 Childhood, Project Safe Neighborhoods, and Human Trafficking.

DEFENDANT Criminal Case No. 19cr2128-JM

Jeffrey John Lenhof Age: 41 Vista, CA

SUMMARY OF CHARGE

Title 18, United States Code, Section 2252(a)(2), Receipt of Images of Minors Engaged in Sexually Explicit Conduct

Maximum penalty: Twenty years in prison

INVESTIGATING AGENCY

Homeland Security Investigations

 

NEWS RELEASE SUMMARY – October 30, 2020

SAN DIEGO – Former U.S. Navy Chief Petty Officer Brooks Alonzo Parks was sentenced today to 27 months in prison and $25,405.76 in restitution for federal bribery conspiracy charges by U.S. District Judge Janis L. Sammartino.

Parks is the latest U.S. Navy official to be sentenced in the wide-ranging corruption and fraud investigation involving foreign defense contractor Leonard Glenn Francis and his Singapore-based company, Glenn Defense Marine Asia (GDMA).

"Parks traded on his important position of trust, selling his loyalty to a foreign defense contractor," said U.S. Attorney Robert S. Brewer. "Today’s sentence reinforces our commitment to promote respect for the law and to advocate for just punishment." U.S. Attorney Brewer commended the work of Assistant U.S. Attorney Mark Pletcher and the stellar team of law enforcement agents who dedicated countless hours to the successful investigation and prosecution of the GDMA corruption scheme.

"Brooks Parks’ sentencing is another unfortunate but fitting outcome because he willingly chose to put himself and his greed before the needs of the U.S. Navy," said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS), Western Field Office. "Mr. Parks succumbed to and personally benefited from the corrupt temptations provided to him by the disgraced Department of Defense contractor Glenn Defense Marine Asia, Ltd. and its chief executive officer Leonard Francis. His actions were and remain inconsistent with the core values of the Navy and as this investigation demonstrates, the DCIS will work diligently with its law enforcement partners to protect those core values and associated taxpayers’ dollars the Department of Defense and the military services so immeasurably value."

"Ret. Chief Petty Officer Parks, who previously held a position of trust and responsibility within the Navy, betrayed his former service and deserves to be held accountable for illicitly seeking to receive gifts and other items of value in exchange for using his influence to benefit GDMA," 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’s acquisition process and wastes taxpayer money."

Parks, 48, of Upper Marlboro, Maryland, earlier this year pleaded guilty to one count of conspiracy to commit bribery, admitting that he conspired with Francis and others to receive things of value, including luxury hotel and travel expenses in exchange for taking official acts for the benefit of GDMA and violating his official duties to the United States Navy.

Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving scores of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes - from cash, prostitutes and luxury travel accommodations to Cuban cigars, Kobe beef and Spanish suckling pigs.

According to admissions made as part of his guilty plea, from December 2005 to February 2009, Parks, a Petty Officer First Class, served as the Logistics Lead Petty Officer ("LPO") on the staff of Commander, U.S. Navy Seventh Fleet, embarked on the USS Blue Ridge, the command ship for the Seventh Fleet. Parks was actively involved in managing the Seventh Fleet’s logistics support budget, signing and processing invoices, and performing other supervisory logistics functions for the Seventh Fleet.

Parks admitted that from March 2006 through March 2010, Francis paid for lavish hotel accommodations for Parks and his friends throughout Asia, as the USS Blue Ridge came into port. Parks had expensive taste and wasn’t restrained in demanding ever more luxuriant accommodations from GDMA. In one instance, Parks demanded the $4,800 per night Ritz Carlton Suite in Singapore, though he was ultimately provided

Executive Club Rooms at the Singapore Hilton at a cost of $3,400 for himself and his friends. In another instance related to a port visit in Hong Kong, Parks demanded "3 suites at a 5-star hotel," for himself. He specified, "I’m wanting a Presidential KING Suite (5 Star))." As Parks put it, "the Glen [GDMA] bug had bit the sh** out of me!!!" He assured Francis, "You know I’ve got your back like you’ve got mine."

In return for these bribes, Parks approved and expedited GDMA invoices and payment requests, provided substantial bidding and pricing information to GDMA as part of GDMA’s effort to crush its competitor in the Philippines, and provided limited ship port visit scheduling information.

So far, 34 defendants have been charged and 23 have pleaded guilty as part of this investigation, many admitting they accepted luxury travel and accommodations, meals or services of prostitutes from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by millions of dollars.

DEFENDANT Case Number: 18-CR-3657-JLS

Brooks Alonzo Parks Age: 48 Upper Marlboro, Maryland

SUMMARY OF CHARGES

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

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

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

NEWS RELEASE SUMMARY – October 29, 2020

SAN DIEGO— The United States Attorneys for the Southern District of California, Eastern District of California, Northern District of California and Central District of California and the District Attorneys of San Diego, Sacramento, Alameda and Ventura counties launched an online outreach campaign today to help victims of domestic violence during the COVID-19 pandemic. The United States Attorneys and District Attorneys are joined by Childhelp, a national nonprofit organization aiding victims of child abuse.

The outreach campaign was created to combat an unintended consequence of COVID-19 public health measures— an alarming rise in domestic violence with victims trapped at home with their abusers under increasing stress. The National Domestic Violence Hotline has reported an increase in contacts to the hotline during COVID-19. Reports show that physicians are treating more domestic violence injuries and that these injuries are more severe. According to the CDC, roughly one in six homicide victims are killed by an intimate partner. Research further shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have access to a firearm. Under federal law, it is illegal to possess a firearm if you are a felon, and the United States Attorney’s Offices prioritize prosecuting individuals with domestic violence felony convictions who possess a firearm.

The Southern District of California U.S. Attorney’s Office has made significant efforts to prosecute individuals who possessed firearms in violation of a domestic violence restraining order. For example, in October 2019, a San Diego Superior Court judge imposed a domestic violence restraining order upon Daniel Anthony Fischbeck. According to the criminal complaint, the restraining order explicitly prohibited Fischbeck from possessing firearms. On January 1, 2020, Fischbeck was arrested after violating the restraining order a second time. At the time of Fischbeck’s arrest, a Springfield XD .45 caliber handgun was found in his car. He was then charged federally for several federal firearms offenses. Fischbeck recently pleaded guilty in federal court to being a methamphetamine addict while in possession of the Springfield handgun, in violation of Title 18, United States Code, Section 922(g)(3). Fischbeck is set to be sentenced in federal court on November 2, 2020. U.S. v. Fischbeck, 20-CR-479-LAB.

The focus on domestic violence and firearms is rendered even more critical in light of recent crime data. In September, a report by the San Diego Association of Governments, also known as SANDAG, revealed that the San Diego region saw a 3 percent increase in domestic violence in the first half of 2020 over the same period last year. SANDAG’s data shows more notable increases in domestic violence in certain local communities: Santee (18 percent); El Cajon (18 percent); and National City (74 percent). Meanwhile, statistics cited by the National Coalition Against Domestic Violence indicate that one in three female murder victims are killed by intimate partners and that an abuser’s access to a firearm increases the risk of femicide significantly.

"Domestic violence plays a significant role in how we prioritize federal prosecutions," said U.S. Attorney Robert Brewer of the Southern District of California. "We frequently consider past domestic violence arrests and convictions in both firearms and immigration prosecutions. That type of criminal history serves as a possible indication of anger and impulse control issues, which makes a defendant a larger threat to public safety, especially when a firearm is present. As a result, the Department of Justice has urged all U.S. Attorneys to aggressively prosecute firearms violations in order to disrupt the escalating cycle of violence."

According to Childhelp Founder & CEO, Sara O’Meara, "The partnership of California’s safety leaders with Childhelp to secure children during COVID-19 is a model for child welfare across the country. All these huge hearts coming together to find children trapped in the shadows of abuse will not only save lives, but create a culture of compassion that will exist long after this virus is behind us."

The campaign includes a video public service announcement (see https://youtu.be/QwWHxAFTRK8) and public awareness messages posted on Facebook, Twitter, and other social media platforms with a new post made each day for one week. The posts provide information for victims with resources, such as 24-hour hotlines and other services vital to reporting abuse. The posts also provide tips for concerned friends, relatives, and educators on how they can help victims of abuse. This outreach campaign follows a July campaign addressing domestic violence and child abuse and exploitation by U.S. Attorney Scott, Childhelp, and the District Attorneys of Alameda, Sacramento, and San Diego counties.

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

NEWS RELEASE SUMMARY – October 28, 2020

SAN DIEGO ­– Fan Wang pleaded guilty in federal court today to operating an unlicensed money transmitting business. His guilty plea is the fourth in this ongoing investigation targeting operators of unlawful underground financial institutions that transfer money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls.

As part of his agreement to plead guilty, Wang agreed to forfeit $225,000 to the United States as property involved in the operation of his unlicensed money transmitting business.

“As this series of guilty pleas makes abundantly clear, individuals facilitating the illegal transfer of money to and from China will be held accountable,” said U.S. Attorney Robert Brewer. “The security of our banking system depends on it.” Brewer commended prosecutors Mark Pletcher and Daniel Silva, as well as agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force and the Drug Enforcement Administration for their excellent work on this case.

“HSI will continue to hunt down these underground hawalas and disrupt the ability of criminal organizations to cash-in on their ill-gotten gains,” said Cardell T. Morant, special agent in charge for Homeland Security Investigations (HSI). “HSI and our partners are committed to pursuing criminal prosecutions and civil monetary penalties against those who choose to operate in the shadows of our financial system and enable the flow of dirty money across international borders.”

As admitted in the plea agreement entered today before U.S. Magistrate Judge Daniel E. Butcher, Wang sold hard currency in U.S. dollars that he collected from various third parties.  His customers were typically individuals with bank accounts in China who could not readily access cash in the United States due to capital controls that cap the amount of Chinese yuan that an individual can convert to foreign currency.  Often these customers needed the money to gamble at the casinos in Las Vegas and elsewhere. Upon receiving U.S. dollars, the customers would transfer from a Chinese bank account an equivalent value in yuan, over their mobile phones in the United States, to a separate bank account in China designated by Wang.  As part of a typical money exchange transaction, Wang was introduced to his customers by a casino host whose job it was to facilitate that customer’s play at a particular casino.  The customer then used the U.S. currency to gamble.

Sentencing is scheduled for January 29, 2021.  

Extending the series of guilty pleas in this investigation, Jeffrey B. Miklus of Phoenix, Arizona admitted to tax fraud, after using funds from his business to fund his gambling activity at casinos throughout the southwestern United States.

As admitted this morning in his plea agreement that was also entered before U.S. Magistrate Judge Daniel E. Butcher, Miklus withdrew over $1.5 million dollars from his pest control business, and used these proceeds to gamble—all without reporting that income to the IRS. This activity spanned years, resulting in restitution and taxes due and owing to the IRS of more than $650,000, an amount that will grow with interest and a 75 percent fraud penalty. As a material term of his plea agreement, Miklus must satisfy the tax due in full before his sentencing date.

Sentencing for Miklus is scheduled for January 31, 2021.  

DEFENDANTS                                           

Fan Wang                                            Case Number 20CR3390-DMS                                          

                                                            Las Vegas, NV                        Age: 38

Jeffrey B. Miklus                                Case Number 20CR3328-GPC                                           

                                                            Phoenix, AZ                            Age: 57

SUMMARY OF CHARGES

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

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

Tax Fraud and False Statements Under Penalties of Perjury – Title 26, U.S.C., Section 7206(1)

Maximum Penalty: Three years in prison, restitution, and $250,000 fine

AGENCIES

Homeland Security Investigations

IRS Criminal Investigation Las Vegas Financial Crimes Task Force

Drug Enforcement Administration

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

NEWS RELEASE SUMMARY – October 27, 2020

SAN DIEGO – Nimesh Shah, owner of Blue Star Learning, a technical training school in San Diego, was sentenced in federal court today to 45 months in custody as a result of a multi-year scheme that defrauded the Department of Veterans Affairs out of almost $30 million in Post-9/11 G.I. Bill benefits. 

As laid out in Shah’s plea agreement and court documents, Shah took extraordinary efforts to deceive regulators from the Department of Veterans Affairs (VA) to ensure the school continued to receive VA funds. Shah provided the VA with false documents, invented fake students and created fake student files. He provided spreadsheets with false employment information and fraudulent contact information for purported graduates of the school and their made up employers. He purchased cellular telephones so that he and his employees could field VA regulator calls to purported employers of school graduates, and hired individuals overseas to pretend to be satisfied Blue Star Learning students in response to VA regulator emails.  As laid out in court records, Shah’s scheme appears to be one of the largest Post-9/11 G.I. Bill fraud cases that has been prosecuted around the country.

Shah was also ordered to forfeit $3,076,361.77 and to pay the VA $29,350,999 in restitution.  Shah’s wife Nidhi Shah, who was the vice president and director of education at the school, was sentenced to two years of probation as a result of lying to investigators in the course of the investigation into the school. 

The Post-9/11 G.I. Bill provides veterans and other eligible individuals educational assistance, including tuition, housing costs, and other educational costs and fees. The VA pays tuition and fees directly to the school where the veteran is enrolled, and if the veteran is enrolled on more than a half time basis, the VA additionally provides a monthly housing allowance directly to the veteran, as well as money for books, supplies, equipment and other educational expenses.  In October 2011, the VA began paying Post-9/11 G.I. Bill benefits for individuals pursuing non-institute of higher learning, non-degree programs, including non-accredited, non-college degree schools like Blue Star Learning. 

In order to receive funds from the VA under the Post-9/11 G.I. Bill, Blue Star Learning was required to have at least 15 percent non-veterans for each course for which the VA was paying educational benefits - a rule called the “85/15 Rule.”  As laid out in court records, the “85/15 Rule” is designed to minimize the risk that veterans’ benefits are wasted on educational programs of little value and to ensure that the cost of a course is acceptable and paid on the open market by non-veterans. As part of its yearly accreditation process, Blue Star Learning was also required to provide vocational attainment data for graduates of the school to VA regulators that corroborated employment statistics posted on the Blue Star website. This data was requested to ensure that individuals attending the school were getting jobs in the fields in which they were receiving training, as a measure of quality. 

As part of his multi-year fraud scheme, between March 2016 and June 2019, Shah lied to the VA about the percentage of non-veteran students at the school, and made up fake non-veteran students – when in fact nearly all of their business came from veteran students. He also created spreadsheets of fraudulent employment data, including false emails, phone numbers, jobs and employers to support made-up graduate employment data. And he falsely claimed that all of the students at the school were enrolled full-time.  Shah’s lies ensured that Blue Star Learning received millions of dollars in VA education benefits that the school was not entitled to.

Blue Star Learning, which charged up to $20,560 per course, had close to 100% veteran students. Shah nonetheless repeatedly misrepresented to the California State Approving Agency for Veterans Education (“CSAAVE”) and the VA that Blue Star Learning was in compliance with the “85/15 Rule.”  Shah took extraordinary efforts to deceive VA regulators regarding non-veteran students at the school, including creating fake enrollment agreements and student files for the purported non-veterans in each program.  Shah emailed the VA 48 fraudulent enrollment agreements for fictitious people he represented were non-veteran students at Blue Star Learning, complete with fraudulent dates of birth, social security numbers, addresses, phone numbers and emails for each fraudulent non-veteran student. 

Shah knew that the vast majority of Blue Star Learning graduates did not obtain jobs in the fields in which they were purportedly receiving training, and that the employment statistics on Blue Star Learning’s website were false.  Shah nonetheless submitted fraudulent spreadsheets to CSAAVE claiming that all of the Blue Star Learning students listed were employed in the informational technology field. On these spreadsheets, Shah provided fraudulent phone numbers, email addresses, employers, and employer contact information for each student. Shah then took his fraud a step further: Because he knew CSAAVE could contact the students/employers to verify the data submitted, Shah hired individuals to create the fraudulent email addresses for the Blue Star Learning students, and directed these individuals, who resided overseas, to answer emails received at the fraudulent email addresses pretending to be satisfied Blue Star Learning graduates working in the information technology field. Shah additionally created 30 fictitious companies that he listed as the employers on the fraudulent spreadsheets, and hired individuals to create fraudulent email addresses and domain names for each fictitious company. Shah directed a Blue Star Learning employee to purchase 30 cellular telephones, one for each fictitious employer, and had employees of Blue Star Learning create voicemail greetings on each cellular telephone so that it would appear that the fraudulent businesses were legitimate if CSAAVE called to check.

“This was an extraordinary fraud in terms of the elaborate deception, the years-long duration and the amount of money involved,” said U.S. Attorney Robert Brewer. “This defendant knowingly violated the rules to enrich himself, and for that he will go to prison.” Brewer commended prosecutor Michelle Wasserman and agents from the Department of Veterans Affairs Office of Inspector General and Federal Bureau of Investigation for excellent work on this case.

“The FBI worked with our partners at the VA-OIG to investigate this elaborate fraud scheme resulting in a loss of over $29 million dollars,” said FBI Special Agent in Charge Suzanne Turner.  “Fraud affecting educational benefits meant for our military veterans will not be tolerated.  Today, justice was served against the Shahs, the owners of Blue Star Learning, who put greed and deceit above the men and women of our U.S. military.”

Rebeccalynn Staples, Special Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Western Field Office, stated, “This case demonstrates VA OIG’s commitment to aggressively pursuing individuals and schools who seek to exploit the education benefits earned by veterans.  VA OIG will continue to protect the integrity of the VA education benefits program by identifying unscrupulous schools who take advantage of veteran students.  VA OIG urges anyone with knowledge of possible fraud against VA to contact the VA OIG Hotline Division at 1-800-488-8244.”

As a result of Shah’s fraud, the VA issued over $11 million in tuition payments to Blue Star Learning, and over $18 million in housing allowances and stipends. In total, as a result of Shah’s fraud, the VA lost $29,350,999. 

DEFENDANT                                               Case Number 19CR4551-JAH; 19CR4550-JAH  

Nimesh Shah                                       Age: 37                                   San Diego, CA

Nidhi Shah                                          Age: 35                                   San Diego, CA

SUMMARY OF CHARGES

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

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

Nidhi Shah: False Statement – Title 18 U.S.C., Section 1001

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

AGENCY

Department of Veterans Affairs Office of Inspector General

Federal Bureau of Investigation

 

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

NEWS RELEASE SUMMARY – October 26, 2020

SAN DIEGO – Javier Felix Bayardo, a resident of Sinaloa, Mexico who was living in the San Diego area, was sentenced in federal court today to 17 years in custody for his role as the organizer of drug and money- laundering conspiracies and for possessing firearms in furtherance of a drug trafficking crime.

Felix pleaded guilty in August of 2018, admitting that from 2014 until 2017, Felix coordinated the receipt of cocaine, methamphetamine and marijuana that were smuggled to the San Diego area. He arranged to store the drugs and then deliver them to customers in Southern California and elsewhere.  To do so, Felix maintained control of multiple commercial storage units that he used to store large quantities of drugs following their importation. Felix supervised drug couriers and money launderers in these efforts.

Through his plea agreement, Felix also acknowledged that he and others opened dozens of bank accounts that were used to receive cash deposits of drug proceeds from throughout the United States and then withdrawn from the San Diego area for bulk transport to drug suppliers in Mexico.

According to the plea documents, the conspiracy involved the laundering of at least $4.5 million in drug proceeds and at least 26.5 kilograms of cocaine, 938 grams of methamphetamine and 486 kilograms of marijuana that were seized during the investigation. Felix possessed five firearms, which included a .223 caliber automatic rifle and a Glock semi-automatic pistol. 

In addition to the 17-year sentence, the court imposed a $30,000 fine. In connection with this case, the court has previously ordered the forfeiture of more than $27,500 in United States currency; Las Vegas real property; two Kawasaki Jet Skis; 25 wristwatches; 26 women’s handbags; 42 pairs of women’s shoes; three large screen televisions; a currency counter and the five firearms.

“Those who attempt to use Southern California as a hub for their illicit drug trafficking and money laundering efforts will continue to face stiff penalties,” said U.S. Attorney Robert Brewer. “Not only will we aggressively pursue significant prison sentences in these cases but also forfeiture of the ill-gotten gains of the perpetrators in whatever form.” Brewer commended prosecutor Larry Casper and agents from the Drug Enforcement Administration, IRS Criminal Investigation Division, Homeland Security Investigations and U.S. Postal Service for their excellent work on this case.

“Today’s sentencing of Javier Felix Bayardo is a victory for our community,” said DEA Special Agent in Charge John Callery.  “Felix Bayardo will spend the next 17 years in federal prison for dealing deadly drugs that caused the destruction of an untold number of lives.  This just sentencing should serve as a warning to anyone who puts profits above the lives of Americans – DEA and our law enforcement partners will use every resource to ensure you are brought to justice and serve time for your crimes.”

“Traffickers of illegal drugs who corrupt our financial systems to launder their illicit proceeds will be caught and brought to justice,” said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “Our IRS Special Agents are committed to dismantling these drug and money laundering networks by using our financial expertise to identify and trace criminal transactions, stem the flow of dirty money and seize all assets that fund drug cartels.”

“This sentencing is the product of federal law enforcement agencies collaborating together and working with our partners at the U.S. Attorney’s Office on ridding our communities of illegal narcotics and the violence that so often comes with it,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI).  “I hope today’s outcome is seen as a warning to others who are thinking of getting involved in narcotics smuggling to make money.  We will find you and we will bring you to justice.”

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the highest-level drug traffickers, money launderers and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime.  The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.

DEFENDANT                                   Case Number 17-cr-2538-BAS                                                       

Javier Felix Bayardo                           Age:    36                    Sinaloa, Mexico         

SUMMARY OF COUNTS OF CONVICTION

Javier Felix-Bayardo

Count 1:                      Conspiracy to Distribute Cocaine, Methamphetamine and Marijuana, 21 U.S.C. Secs. 841(a)(1) and 846.

Sentence Imposed:      Twelve years (concurrent with Count 2)

Count 2:                      Conspiracy to Launder Monetary Instruments, 18 U.S.C Secs. 1956(h) and (a)(1)(B)(i).

Sentence Imposed:      Twelve years (concurrent with Count 1)

Count 3:                      Possession of Firearm in Furtherance of a Drug Trafficking Crime, 18 U.S.C. Sec. 924(c).

Sentence Imposed:      Five years (consecutive to Counts 1 and 2)

INVESTIGATING AGENCIES

Drug Enforcement Administration

IRS Criminal Investigation Division

Homeland Security Investigations

U.S. Postal Service

Assistant U. S. Attorneys Larry Casper (619) 546-6734 and Victor White (619) 546-8439   

SAN DIEGO – Egisto Salerno, M.D., a San Diego resident, was sentenced to 18 months in custody by U.S. District Judge Cynthia Ann Bashant for causing the illegal distribution of an opioid pain medication commonly known as Norco or Vicodin.

Salerno, whose medical practice was located on El Cajon Boulevard, pleaded guilty in January, admitting that he signed prescriptions for 78,544 pills that lacked a legitimate medical purpose and were outside the usual course of professional medical practice.

“This defendant ignored and defied his medical obligation to his patients, his duty to the practice of medicine and his duty to the community,” Assistant U.S. Attorney Larry Casper said during today’s hearing. “The defendant committed this federal crime in the midst of an opioid crisis in this country. And he admittedly abused his position of trust.”

“Corrupt doctors who blatantly ignore their medical oath and the best interests of their patients to illegally distribute opioids in the midst of a nationwide opioid crisis will face severe consequences” said U.S. Attorney Robert Brewer. “We will continue to battle this crisis on every front including zealously pursuing all who seek to profit from illegally distributing opioids whether or not they may have a medical degree.” Brewer praised prosecutors Larry Casper and Victor White and DEA agents for their efforts to achieve justice in this case.

“While the vast majority of doctors prescribe medications in compliance with federal laws, there will always be doctors like Egisto Salerno who seek profit over their patients’ best interests,” said DEA Special Agent in Charge John W. Callery.  “DEA has a team dedicated to investigating those doctors who choose to violate their medical oath and illegally distribute opioids.  DEA will bring these doctors to justice for their contribution to the growing opioid problem in our country.”

Through his plea agreement, Salerno also admitted that an undercover federal agent who visited Salerno’s office on six occasions received six hydrocodone prescriptions.  In a separate instance, on a date when the undercover agent did not visit Salerno’s office and the doctor did not see him, Salerno acknowleged that a prescription was improperly issued by him in the name used by the undercover agent. After the prescription was issued, Salerno ginned up and signed a progress note in the “patient” chart for the purported visit that did not occur.

The prescription was then picked up by another as part of a larger scheme to divert these pills. That scheme involved two medical assistants in Salerno’s practice who falsified medical records and sold prescriptions that Salerno had pre-signed to a co-defendant though the “patients” identified on those prescriptions did not even see Salerno. In fact, as Salerno acknowledged, many of those in whose names these prescriptions were written were deceased or jailed at the time the prescriptions were written.

The pills were, in turn, diverted to the “capper” or patient recruiter, who also arranged to bring homeless and other individuals to Salerno’s office and paid them to secure these prescriptions from Salerno. Others assisted the patient recruiter by transporting the purported patients to Salerno’s office and then to pharmacies to pick up the pills.  In turn, pills were sold in San Diego and delivered to a pharmacy in Mexico for cash.   

As the plea documents show, the criminal activity occurred between November 2014 and February 2018. Seven other defendants have been convicted in this case including Salerno’s two medical assistants – April J. Cervantes and David D. Apple; the lead patient “recruiter” – Stephen Toney; and Toney’s associates – Shalina D. Latson, Lonnell Ligon, LaJuan D. Smith and Amber N. Grabau.

Defendant David D. Apple, one of Salerno’s medical assistants, will be sentenced on December 2, 2020.

DEFENDANT                                   Case Number 18-cr-1405-BAS                                                       

Egisto Salerno, M.D.                          Age:    76                    San Diego, California

SUMMARY OF CONVICTIONS

Egisto Salerno, M.D.

Distribution of Hydrocodone in violation of Title 21 U.S.C. Sec. 841(a)(1) and (b)(1)(C)

Maximum Penalties: Twenty years in prison and $1 million fine.

Prior Sentences Imposed

Stephen Toney, Sr.:                Seventy four months in custody - Conspiracy to Possess With Intent to Distribute Hydrocodone in violation of 18 U.S.C.,Sec. 841(a)(1) and 846.                                   

Amber Nicole Grabau:            Twenty months in custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.

Lonell J. Ligon:                       Twenty four months custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.     

Shalina D. Latson:                  Five years probation - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.

LaJuan D. Smith:                    Thirty seven months custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.       

April J. Cervantes:                  Twenty four months custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.

Remaining to be Sentenced

David D. Apple                       Conspiracy to Possess With Intent to Distribute Hydrocodone in violation of                                                 Title 18, U.S.C., Sec. 841(a)(1) and 846.         

INVESTIGATING AGENCY

Drug Enforcement Administration

Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Andrew Galvin (619) 546-9721

NEWS RELEASE SUMMARY – October 23, 2020

SAN DIEGO – Two U.S. Navy service members caught in a sweeping corruption case involving false claims to the Traumatic Servicemembers Group Life Insurance Program were sentenced in federal court today.

Ronald Olmsted and Anthony Coco, who each entered guilty pleas earlier this year, were sentenced by U.S. District Judge Janis L. Sammartino.  Olmsted was sentenced to four months in prison followed by four months of home detention to be served as part of three years of supervised release.  Coco was sentenced to four months of home detention to be served as part of three years of probation.

The charges arise from a scheme led by co-defendant Christopher Toups, who according to plea agreements and an indictment, recruited Olmsted, Coco, and a number of other fellow service members he met through his work in the Navy.  According to court documents, Toups helped these coworkers to create and file fraudulent claims to obtain unearned benefits from Traumatic Servicemembers Group Life Insurance Program, or TSGLI, an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty.  He had help from U.S. Navy Commander Dr. Michael Villarroel, the medical doctor for the unit where Toups worked, and from Kelene Meyer, a former nurse in the U.S. Navy who was married to Toups during the scheme. 

According to the superseding indictment and other court records, including Olmsted’s and Coco’s plea agreements, the co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One  (“EOD ESU One”), based in Coronado, California.  Christopher Toups, a former Chief Petty Officer Construction Mechanic, filed his own fraudulent claims, and collected kickbacks from the participants he recruited once their fraudulent TSGLI benefits were paid.  Dr. Villarroel knowingly signed off on false and fraudulent TSGLI applications on behalf of multiple service members that were part of or connected to EOD ESU One.  To support their applications, each defendant submitted fabricated applications that included forged signatures and altered hospital records, which Meyer helped to create. 

Relevant to today’s hearings, Ronald Olmsted admitted in his plea agreement to submitting two separate fraudulent claims, for which he received a total payout from TSGLI of $175,000.  Olmsted’s claims falsely reported that he lost the ability to do basic tasks and care for himself for months after a rappelling accident in 2011 and a fall down a flight of stairs in 2012.  Olmsted kicked back $55,000 to Toups, some in cash and some in cashier’s check.  Coco, for his part, admitted that he was paid $100,000 after falsely reporting on medical forms that he suffered a fall from a piece of equipment that broke both his ankles and left him confined to a wheelchair.  After he received the unwarranted payout from TSGLI, Coco kicked back $65,000 to Toups, paid all in cash.

To date, 11 individuals have been charged in connection with this scheme.  Seven of those individuals – Richard Cote, Earnest Thompson, Kelene Meyer, Paul Craig, and Stephen Mulholland, as well as Olmsted and Coco – have pleaded guilty to fraud charges.  According to court records, Toups, Villarroel, and Meyer were at the center of the scheme, and together the conspirators defrauded the TSGLI program of nearly $2 million.   Toups, Villarroel, and Meyer received kickbacks for creating and filing the fraudulent TSGLI applications for other U.S. Navy service members.   

DEFENDANTS AND CHARGES              Case Number            Age                 Hometown

Christopher Toups                                          18CR1674-JLS           43                    Woodstock, GA

Kelene Meyer                                                  18CR1674-JLS           44                    Jacksonville, FL

Dr. Michael Villarroel                                     18CR1674-JLS           48                    Coronado, CA

Paul Craig                                                       18CR1674-JLS           47                    Austin, TX

Richard Cote                                                   18CR1674-JLS           45                    Oceanside, CA

Earnest Thompson                                          18CR1674-JLS           46                    Murrieta, CA

James Brown                                                  18CR1674-JLS           46                    San Diego, CA

David Hawley                                                 18CR1674-JLS           51                    San Diego, CA

Ronald Olmsted                                              20CR0659-JLS           48                    Mobile, AL

Anthony Coco                                                 20CR0197-JLS           43                    San Diego, CA

Stephen Mulholland                                        20CR0052-JLS           51                    Panama City Beach, FL

SUMMARY OF CHARGES

18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud

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

18 U.S.C. § 1343, Wire Fraud

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

18 U.S.C. § 287, Making a False Claim

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

AGENCIES

Federal Bureau of Investigation

Naval Criminal Investigative Service

Department of Veterans Affairs - Office of Inspector General

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

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

NEWS RELEASE SUMMARY – October 23, 2020

SAN DIEGO – Christopher Glenn Emison of El Cajon was sentenced today by U.S. District Judge Anthony J. Battaglia to 168 months in prison for distributing more than 40 grams of fentanyl - including the fentanyl that caused the death of 45-year old Derrick Hotchkiss.

On April 11, 2019, Hotchkiss, who played rugby for the San Diego Old Aztecs Rugby Football Club for many years and continued to attend matches, overdosed on fentanyl and died at his home in San Diego. Upon responding to the death scene, law enforcement officials recovered Hotchkiss’ cellular telephone and located a text message exchange between Emison and Hotchkiss indicating that the defendant sold fentanyl to Hotchkiss the night before his death.

In imposing sentence, Judge Battaglia said, “Dealing in drugs is dangerous. Dealing in fentanyl is deadly.” He also explained that, “For those that survive the victim, they have a whole lifetime to consider [what happened] and to grieve.”

“This case and the fact that deadly fentanyl continues to ravage our community, taking more than 300 lives this year alone in San Diego County, demonstrates the urgent need to hold these dealers of death accountable for their actions” said U.S. Attorney Robert Brewer. “Law enforcement must continue to devote resources to the opioid epidemic and stop those who profit from drug trafficking, while robbing sons and daughters of their parents, and parents of their children.”

“Selling drugs is not a victimless crime. Selling drugs is a root cause of crime, cartel violence, the  destruction of families, and in this case, death,” said DEA Special Agent in Charge John W. Callery.  “If you make the choice to sell drugs, DEA and our law enforcement partners will work tirelessly to bring you to justice.”

On the same day as Hotchkiss’ death, law enforcement executed a search warrant at Emison’s residence and seized 11.6 grams of fentanyl; 95.6 grams of heroin residue; a loaded Ruger .357 Magnum revolver on Emison’s bed; a .22 calibert semi-automatic rifle; over 1,000 rounds of various caliber ammunition; a “butane honey oil” (hash oil) extraction laboratory; a digital scale; a “pay and owe” notebook; and considerable evidence of Emison’s own drug usage. A search of Emison’s vehicle yielded additional ammunition and firearms.

After waiving his Miranda rights, while speaking with agents, Emison acknowledged his understanding of the dangers associated with the drug he was selling, as he told agents that fentanyl was “as dangerous as shit.” Emison also told law enforcement to handle the “China,” meaning the fentanyl, in his residence with care and claimed to have warned the victim about the drug’s strength, although the text messages he apparently sent to the victim with that warning after he sold the fentanyl did not generate a response and, thus, apparently came too late.

Hotchkiss’ mother, who addressed the court at sentencing, explained that her “life was shattered” when she was informed of her son’s death. In filed papers, she wrote: “I don’t know why these guys are selling [fentanyl], whether it’s money or they themselves are using, but if this is going to save another mother’s son then I’m glad they were arrested.” Hotchkiss’ spouse also told the court in filed papers that their young son “does not have a father” and he “will have no memories of [his father], just photographs and stories that I will share.”  

The Old Aztecs Rugby Football Club also noted that, “we continue to grieve our beloved Deez…Saturdays won’t be the same; he was a large man with a heart to match.” 

U.S. Attorney Brewer praised prosecutor Larry Casper as well as the agents from Narcotics Task Force Team 10 and the El Cajon Police Department.  Team 10 is a multi-agency team housed by DEA that was created in July 2018 to address drug overdose deaths in San Diego.

Co-defendant Jeffrey Alden Blair pleaded guilty on February 26, 2020 and is scheduled to be sentenced on November 23, 2020.

DEFENDANTS                                Case Number 19cr3252-AJB                                                          

Christopher Glenn Emison                 Age: 33                       El Cajon, California

Jeffrey Alden Blair                             Age:  34                      San Diego, California

SUMMARY OF CHARGE

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

Maximum Penalties – Mandatory minimum of five years, and maximum of 40 years in prison and $5 million fine

INVESTIGATING AGENCIES

Drug Enforcement Administration

San Diego Medical Examiner’s Office

El Cajon Police Department

 

Assistant U. S. Attorney Joseph Price (619) 546-7642

NEWS RELEASE SUMMARY – October 22, 2020

SAN DIEGO – Guild Mortgage Company has agreed to pay the United States $24.9 million to resolve allegations that it violated the False Claims Act and the common law by knowingly breaching material program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), the Department of Justice announced today. Guild Mortgage Company is headquartered in San Diego, California, with branches across the United States.

“Ensuring the integrity of federal lending programs is important to keeping those programs financially sound,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division.  “Together, with our partners at HUD, we have worked hard to hold accountable FHA lenders that knowingly and materially violate program requirements that help Americans achieve the dream of home ownership.”

“As this settlement demonstrates, we are committed to holding mortgage lenders accountable when they choose to abuse the integrity of vital government programs that are designed to assist homeownership,” said U.S. Attorney Robert Brewer.  “We also commend the whistleblower for coming forward, exposing these wrongs, and working with the government investigative team.”

“The United States is committed to providing Americans opportunities to own their own homes,” said Acting U.S. Attorney for the District of Columbia Michael R. Sherwin.  “This settlement reflects the diligent work of officials from the Department of Justice and HUD to ensure that the programs that provide those opportunities are operated with integrity and in accordance with requirements established by law.”

“The Federal Housing Administration insurance program is a critical tool that helps hardworking Americans achieve their dream of homeownership.  Any abuse of that program is unacceptable and the bad actors will be held accountable,” said Rae Oliver Davis, U.S. Department of Housing and Urban Development, Inspector General.  “This case highlights the effectiveness and the importance of whistleblower programs.” 

Participants in the FHA mortgage insurance program, like Guild Mortgage Company, can originate and underwrite mortgages without first having the government review the loans for compliance with the agency’s underwriting and origination requirements.  If an FHA-insured loan defaults, the holder of the loan can then recover from the United States for certain losses.  Lenders must follow FHA rules designed to ensure that only mortgages that meet key credit and underwriting criteria are insured by the government. 

The settlement announced today resolves allegations that Guild Mortgage Company knowingly approved ineligible loans that later defaulted and resulted in claims to FHA for mortgage insurance, failed to comply with material program rules that require lenders to maintain quality control programs to prevent and correct underwriting deficiencies, and failed to self-report materially deficient loans that it identified.

The agreement resolves allegations brought by the former head of quality control at Guild Mortgage Company, Kevin Dougherty, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  The Act permits the United States to intervene in such a lawsuit, as it did in part here.  Dougherty will receive $4,980,000 as his share of the government’s recovery.

The investigation, litigation, and settlement were the result of a coordinated effort among the Commercial Litigation Branch of the Department of Justice’s Civil Division, the U.S. Attorney’s Offices for the District of Columbia and the Southern District of California, HUD, and HUD-OIG. 

The qui tam case is captioned United States ex rel. Dougherty v. Guild Mortgage Company, Civ. A. No. 16-2909 (S.D. Cal.). 

The claims asserted against the defendant are allegations only, and there has been no determination of liability.

 

 

Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924

NEWS RELEASE SUMMARY – October 21, 2020

SAN DIEGO ­– Former San Diego Zoo biologist Matthew John Anderson was sentenced in federal court today to six months in prison for embezzling hundreds of thousands of dollars from the San Diego Zoo.

In March, Anderson pleaded guilty to a theft charge, admitting that he created dozens of fake invoices, often in the names of fictitious vendors, and submitted them to the zoo for payment for products never purchased or received. Anderson also submitted invoices for personal expenses. The zoo paid these invoices by, in some cases, sending money to accounts controlled by Anderson, and in others by sending payments to third parties who kicked back the bulk of the payments to Anderson. Over the course of eight years of fraud, Anderson caused the zoo to suffer a total loss of $236,682.86.

In imposing sentence, Chief U.S. District Judge Larry A. Burns noted that Mr. Anderson not only abused a position of trust, but that he did so “over the long haul” and that this was not a case of one discreet lapse of judgment.  Anderson, 50, appeared for his sentencing hearing having tendered full restitution to the zoo.  In imposing a custodial term, Chief Judge Burns noted that “you cannot systematically steal over a period and just say that you will pay it back.” The judge then remanded Mr. Anderson into custody to serve his term.

Anderson worked for the zoo for more than 17 years, starting as a research fellow and ultimately serving as the Director of Behavioral Biology for the zoo’s Institute for Conservation Research until the zoo terminated his employment in late 2017. A citizen of the United Kingdom, Anderson faces likely deportation as a consequence of his sentence.

“For years, this defendant took advantage of the trust of one of our city’s most beloved institutions,” said U.S. Attorney Robert Brewer. “His theft compromised the San Diego Zoo’s world-renowned conservation work, made possible by government grants, charitable donations and the work of thousands of unpaid volunteers.” Brewer praised the excellent work of prosecutor Jeffrey Hill and FBI agents.

“The FBI unraveled a years-long plot to steal money from San Diego's prized institution by a trusted employee,” said FBI Special Agent in Charge Suzanne Turner.  “Today, the zoo has been made whole again through payment of full restitution and Mr. Anderson was forced to face justice for his fraudulent actions through his prison sentence.”

DEFENDANT                                               Case No. 20-CR-0812-LAB

Matthew John Anderson                                 Ramona, California                 Age: 50

SUMMARY OF CHARGES

Theft or conversion concerning programs receiving federal funds – 18 U.S.C. § 666

INVESTIGATING AGENCIES

Federal Bureau of Investigation

NEWS RELEASE SUMMARY – October 20, 2020

SAN DIEGO – An indictment was unsealed in federal court today charging San Diego resident Stephen Glenn McLeod with knowingly aiming the beam of a laser pointer at an aircraft on August 28, 2020.

McLeod was arraigned in federal court today. At the hearing, Assistant U.S. Attorney Jonathan Shapiro told U.S. Magistrate Allison Goddard that McLeod is alleged to have pointed a laser pointer at a San Diego Police Department helicopter multiple times while participating in a protest on August 28, 2020.    

U.S. Magistrate Judge Goddard set a personal appearance bond of $35,000, guaranteed by two financial responsible adults.  The next hearing is scheduled for November 20, 2020 at 1:30 p.m. before U.S. District Court Judge Janis Sammartino.

“We support everyone’s right to peacefully assemble and protest.  Aiming a laser pointer at a police helicopter, however, is highly dangerous and a serious violation of federal law,” said U.S. Attorney Robert Brewer.

“When aimed at an aircraft, a beam of light from a handheld laser can illuminate a cockpit, disorienting and temporarily blinding the pilots,” said Suzanne Turner, Special Agent in Charge of FBI San Diego. “It's a federal felony that the FBI and our law enforcement partners take very seriously.”

DEFENDANT                                               Case Number 20CR3106JLS

Stephen Glenn McLeod                                                  Age: 38           San Diego

SUMMARY OF CHARGES

Aiming a Laser Pointer at an Aircraft – Title 18, United States Code, Section 39A

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

AGENCY

San Diego Police Department

Federal Bureau of Investigation

Joint Terrorism 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.

 

Assistant U. S. Attorney Christopher P. Tenorio (619) 909-7556    

NEWS RELEASE SUMMARY – October 19, 2020

U.S. Attorney Robert Brewer announced today that Assistant U.S. Attorney Christopher P. Tenorio will lead the efforts on behalf of the U.S. Attorney’s Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming general election on November 3, 2020.

Mr. Tenorio has been appointed to serve as the District Election Officer for the Southern District of California, which includes San Diego and Imperial Counties. He will be responsible for overseeing the district’s handling of complaints of voting rights abuses and election fraud, in consultation with Justice Department Headquarters in Washington, D.C.  

“Every citizen must be able to vote without interference or discrimination,” Brewer said. “The Department of Justice is committed to protecting the integrity of the election process, stopping fraud, and making sure votes are not stolen.”

The Department of Justice has an important role in deterring and responding to election fraud and discrimination at the polls. The Department’s long-standing Election Day Program aims to enhance this role and ensure public confidence in the integrity of the election process. To this end, the Department is providing local points of contact for the public to report possible election fraud and voting rights violations through Election Day.

Federal law prohibits intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. Federal law also protects voters from intimidation and harassment, including challenges at polling places designed to interrupt or intimidate voters, or the photographing or videotaping of voters under the pretext of uncovering illegal voting. Federal law also protects the right of voters to mark their own ballot or to receive assistance by a person of their choice to overcome a disability or illiteracy.

In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Brewer stated that AUSA/DEO Tenorio will be on duty while the polls are open. The public can reach him at (619) 909-7556.

In addition, the FBI will have special agents and an Election Crimes Coordinator available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses. The public can contact the San Diego FBI at (858) 320-1800. The public may also contact the Department of Justice’s Civil Rights Division in Washington, D.C. at (800) 253-3931 or (202) 307-2767, or by complaint form at https://civilrights.justice.gov/.

The public is advised, however, to call 911 immediately in the case of a crime of violence or active intimidation. State and local police have primary jurisdiction over polling places and can generally respond more quickly in an emergency. Federal authorities can respond thereafter.

Brewer said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available to my Office, the FBI, or the Civil Rights Division.”

 

NEWS RELEASE SUMMARY – October 19, 2020

SAN DIEGO – Two former tax preparers based in El Cajon, California were arraigned in federal court today on an indictment alleging they participated in a tax return scam that resulted in the filing of hundreds of false returns and the request of more than $1.4 million in bogus tax refunds.    

Mimi Bozzo, also known as Mimi Morrison, and Vincent Bozzo, are charged in the indictment with conspiracy to defraud the United States and aiding and assisting the filing of false income tax returns.  According to the indictment, Mimi and Vincent Bozzo owned and operated a tax return preparation business in El Cajon, California, under various business names, including “All Pro Services” and “A to Z Tax Preparation.”

The indictment alleges that from at least January 2012 through April 2018, Mimi and Vincent Bozzo knowingly prepared and filed approximately 500 federal income tax returns that contained false Schedule C business income and false Schedule C business expenses resulting in fraudulently inflated tax credits and refunds. Mimi and Vincent Bozzo allegedly charged their customers approximately $800 per tax return. As part of the tax fraud, Mimi and Vincent Bozzo allegedly transported or accompanied some customers to check-cashing businesses to cash their falsely inflated tax refund checks, and at times, demanded from the customers a portion of the cashed refund check in addition to the tax preparation fees that had already been deducted from the inflated tax refunds. According to the indictment, Mimi and Vincent Bozzo also used their customers to recruit new clients in order to prepare fraudulent returns, paying a fee for each new referral.

The indictment further alleges that Mimi and Vincent Bozzo solicited and obtained the false income from taxpayers by encouraging the creation of receipts for income that the taxpayers did not earn in order to inflate tax credits and refunds that the taxpayers were not entitled.  Mimi and Vincent Bozzo allegedly solicited and obtained personal identifying information of taxpayers by passing out flyers and business cards, which offered people assistance in obtaining money from the government.

To further their tax fraud, Mimi and Vincent Bozzo allegedly prepared tax returns using taxpayers’ personal identifying information and including false and fraudulent information as to income, expenses, deductions and credits. Of note, the indictment alleges that Mimi and Vincent Bozzo falsely claimed on the tax returns that the taxpayers had engaged in the businesses listed on Schedule C, such as household employment. As the indictment alleges, Mimi and Vincent Bozzo’s conspiracy and tax fraud caused the submission of false claims to the IRS for tax refunds totaling at least approximately $1.4 million and caused the IRS to disperse the refunds to the taxpayers. 

“Tax fraud continues to be a growing problem plaguing our community,” said United States Attorney Robert Brewer. “When tax fraud scams are brought to our attention, we will diligently work together with the IRS to unravel the fraud and prosecute those responsible for defrauding the IRS and honest taxpayers in order to protect the integrity of our tax system.”

“Over the course of several years the Bozzos knowingly prepared and filed hundreds of false tax returns,” said Ryan L. Korner, IRS Criminal Investigation Special Agent in Charge of the Los Angeles Field Office. “This is yet another example of suspect tax preparers taking advantage of fellow Americans. American taxpayers who file accurate, honest and timely returns can be assured that the government will hold accountable those who don't.”

At the end of the arraignment, Mimi and Vincent Bozzo were ordered to post bond before returning to their home in Texas. The next hearing is scheduled for December 3, 2020 at 9:00 a.m. before U.S. District Judge Gonzalo P. Curiel. 

DEFENDANTS                                Criminal Case No. 20CR2944-GPC

Mimi Bozzo                                        Age: 60           Trinity, Texas

Vincent Bozzo                                     Age: 60           Trinity, Texas

SUMMARY OF CHARGES:

Count 1 – Title 18, United States Code, Section 371 B Conspiracy to Defraud the United States

Maximum penalties: 5 years in prison, $250,000 fine, 3 years of supervised release.

Counts 2-19 – Title 26, United States Code, Section 7206(2) – Aiding or Assisting the Filing of False Income Tax Returns

Maximum penalties: Three years in prison per count, $250,000 fine per count, one year of supervised release per count

INVESTIGATING AGENCIES

Internal Revenue Service-Criminal Investigation

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

 

Assistant U.S. Attorney Joseph Smith (619) 546-8299

NEWS RELEASE SUMMARY – October 15, 2020

SAN DIEGO – U.S. Attorneys Robert S. Brewer Jr. of the Southern District of California and Nicola T. Hanna of the Central District of California announced today that through a coordinated operation conducted over the last three months, hundreds of kilograms of dangerous narcotics were taken off of the streets of Southern California.

State and federal law enforcement agencies worked together to plan and execute this operation, which culminated in a one week coordinated surge in mid-September which resulted in the seizures of approximately 778 kilograms of methamphetamine, 268 kilograms of cocaine, 30 kilograms of fentanyl, 31 kilograms of heroin,  and $281,000 in U.S. currency.

In addition to the substantial seizures, six individuals were arrested and charged with various federal drug trafficking charges in the Central District of California out of the International Narcotics, Money Laundering, and Racketeering Section, and numerous additional individuals were charged with federal drug trafficking offenses in the Southern District of California.

The operation focused on identifying narcotics entering the United States though numerous Southern California ports of entry and then being transported to various locations throughout Southern California  for further distribution around the country. Numerous High Intensity Drug Trafficking Area (HIDTA) teams from Southern California, comprised of both state and federal law enforcement officers and agents, worked throughout the operation to identify and arrest individuals involved in the illegal activity and to seize narcotics and narcotics proceeds.     

“Drug traffickers and their networks are not bound by city or county boundaries, and neither are we,” said U.S. Attorney Brewer. “With the combined resources of our federal, state and local law enforcement partners, our reach is far and wide. We are seizing the drugs and dismantling the networks that are injecting our neighborhoods with poison.” Brewer praised Assistant U.S. Attorney Joseph Smith and his team of prosecutors, as well as law enforcement partners, for their commendable work on this operation.

“This operation underscores our significant – and successful – efforts to disrupt the smuggling routes used by international drug cartels to deliver narcotics to the United States,” said U.S. Attorney Hanna. “This concerted effort allowed us to identify shipments coming in from Mexico and being delivered to stash houses across the region. As a result of the excellent work of law enforcement agents, we were able to make substantial seizures and arrest individuals who played important roles in the distribution chain.”

This effort is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) operation jointly undertaken by law enforcement agencies and prosecutors in the Southern and Central Districts of California. OCDETF identifies, disrupts, and dismantles the highest-level transnational criminal organizations that threaten the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime.         

OCDETF Director Adam W. Cohen said, “We must salute the coordinated efforts led by dedicated OCDETF prosecutors from these two U.S. Attorney’s Offices to leverage our multi-agency strengths against these criminal networks.”

The three-month operation was coordinated by Assistant U.S. Attorney Joseph Smith, Chief of the OCDETF Section in San Diego, and Assistant U.S. Attorney Carol Alexis Chen, Chief of the International Narcotics, Money Laundering, and Racketeering Section in Los Angeles.

INVESTIGATING AGENCY

Homeland Security Investigations

Customs and Border Protection, Office of Field Operations

Drug Enforcement Administration

San Diego County Sheriff’s Department

LA IMPACT

SD-NET

Assistant U. S. Attorney Cindy Cipriani (619) 546-9608    

NEWS RELEASE SUMMARY – October 14, 2020

SAN DIEGO, CA – U.S. Attorney Robert Brewer today announced $1,222.116 in Department of Justice grants to San Diego agencies to fund crime laboratories, decrease DNA backlogs, support basic and applied forensic research, and help law enforcement identify missing persons. The grants, awarded by the Department’s Office of Justice Programs, are part of $192 million in funding to advance forensic science nationwide.

“Developments in forensic science have given investigators an extraordinary array of tools that can be enlisted to solve crimes and bring answers to victims and survivors, often after many years and even decades,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “These investments in crime-fighting technology, from DNA analysis to drug toxicology to forensic anthropology, will help identify and convict perpetrators, ensure justice for innocent victims and keep communities safe by deterring future criminal activity.”

“DOJ’s significant investment in new technologies is an important piece of the puzzle posed by cold cases,” said U.S. Attorney Robert Brewer.  “We must leave no stone unturned in our effort to increase public safety and deliver accountability and closure to victims.” 

Since 2004, the Office of Justice Programs has received an annual appropriation for DNA and other forensic science activities. The funding, administered through OJP’s Bureau of Justice Assistance and National Institute of Justice, supports DNA analysis, laboratory capacity enhancement and forensic science research that provides knowledge and tools to improve the quality and practice of forensic science.

U.S. Attorney Brewer announced the following sizable grants to San Diego agencies:

• $376,004 to the City of San Diego and $376,112 to San Diego County funded by DOJ’s DNA Capacity Enhancement and Backlog Reduction Program, which has provided funding to states and local jurisdictions since 2011. The funding is awarded to states, then divided among eligible crime labs within the state. The awards assist with increasing the capacity for DNA analysis and the number of DNA samples, thereby decreasing the backlog and turnaround time for DNA analysis. Recipients may use funding to upgrade laboratories and purchase equipment and supplies, such as DNA sample collection kits.                                                                                                                                                       
•  
• $470,000 to the County of San Diego District Attorney for the prosecution of violent crime cold cases where DNA from a suspect has been identified.  These funds are designed to decrease the number of unresolved violent crime cold cases, using advances in forensic technologies that are resulting in successful analysis of evidence once thought to be unsuitable for testing.

For a complete list of individual grant programs, award amounts, and jurisdictions that will receive funding, visit https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/forensics-factsheet-102020.pdf. More information about OJP and its components can be found at www.ojp.gov.

# # #

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

NEWS RELEASE SUMMARY –October 14, 2020

SAN DIEGO – Oscar Rodriguez-Guevara of Tijuana, Mexico was sentenced today to 162 months in prison for smuggling multi-kilogram quantities of cocaine and methamphetamine into the United States from Mexico and then laundering the illicit proceeds, all for the Sinaloa Cartel. U.S. District Judge Roger T. Benitez also imposed a $50,000 fine.

Rodriguez, known as “El Guero Chihuahua” in the Mexican press, managed an extensive transportation network for the cartel that smuggled cocaine, methamphetamine and other drugs from Mexico, northbound through Southern California ports of entry in vehicles with hidden compartments. In turn, he received the proceeds from cartel drug sales at an exchange house in Tijuana, Mexico. He smuggled the cash back through the border, southbound into Mexico.

Rodriguez was extradited from Mexico to San Diego in April 2019. In his plea agreement, Rodriguez admitted to coordinating the movement of drug proceeds to Mexico and supervising, for the extensive trafficking network, the laundering of these proceeds. Rodriguez coordinated the movement of the cocaine and methamphetamine to the United States and worked closely with Omar Ayon-Diaz, who was previously sentenced in this case, to receive the drug proceeds at “Tanga,” a Tijuana exchange house owned by Ayon Diaz. Rodriguez admitted that these proceeds were also intended to promote the continued importation and trafficking of drugs into the United States. 

According to his plea agreement, Rodriguez admitted that he arranged the smuggling of 100 or more kilograms of cocaine as well as methamphetamine into the United States during an 11-month period. Through the wiretap investigation leading to this prosecution, federal agents intercepted Rodriguez’s conversations as he communicated about the smuggling of a load of drugs and firearms from the interior of Mexico to an area of Tijuana near the United States-Mexico border. On another occasion, agents intercepted communications that led to a search warrant at a stash location in San Diego at which more than 27 kilograms of cocaine were seized.  On that occasion, Rodriguez messaged an associate explaining that “[t]hey hit my office…the one inside” (meaning in the United States).

“These drugs are destroying lives through addiction and violence,” said U.S. Attorney Robert Brewer. “It is no small victory to bring justice to  drug traffickers – particularly those who act on behalf of one of the world’s most violent and prolific drug cartels.” Brewer thanked prosecutor Larry Casper and agents from Homeland Security Investigations for their excellent work on this case.

In addition to Rodriguez-Guevara and the defendants in this case, approximately twenty other individuals have entered guilty pleas and been sentenced previously in related cases.  Those cases have involved individuals based in the United States or who frequently crossed into the United States and served as money couriers, drug couriers and drug stash house operators and who were part of, or related to, the same money laundering and drug trafficking organization.

Five other defendants have previously entered guilty pleas in this case and been sentenced (Omar Ayon-Diaz; Osvaldo Contreras-Arriaga; Joel Acedo-Ojeda; Cesar Hernandez-Martinez and Gibran Rodriguez-Mejia). Another defendant, Bianca Acedo-Ojeda, was also extradited from Mexico to face the same international money laundering conspiracy charges and is presently pending trial.

The U.S. Attorney’s Office is working this matter together with the Money Laundering and Asset Recovery Section of the Criminal Division of the Department of Justice in Washington, D.C.

DEFENDANT                                   Case Number 15-cr-950                                                                   

Oscar Rodriguez-Guevara                  Age: 41           Tijuana, Mexico                     

SUMMARY OF CHARGES

Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h).

Maximum Penalties: Twenty years in prison; $500,000 fine or twice the value of the funds involved.

SUMMARY OF CHARGES/SENTENCES FOR OTHER DEFENDANTS

Prior Guilty Pleas and Sentences

Cesar Hernandez-Martinez: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i); sentenced to 137 months custody and $250 fine.

Gibran Rodriguez-Mejia: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h); sentenced to 96 months in custody and $500 fine.

Joel Acedo-Ojeda: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h); sentenced to 135 months custody and $20,000 fine.

Omar Ayon-Diaz: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h); sentenced to 120 months custody and $15,000 fine.

Osvaldo Contreras-Arriaga: Pleaded guilty to Conspiracy to import cocaine, in violation of Title 21, U.S.C., Secs. 952, 960 and 963; sentenced to 132 months custody and $1,000 fine.

INVESTIGATING AGENCY

Homeland Security Investigations

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

NEWS RELEASE SUMMARY – October 13, 2020

SAN DIEGO, CA – A member of a North Park based gang, who was previously convicted of participating in a conspiracy to engage in racketeering enterprise (RICO) involving sex trafficking of minors and adults, pleaded guilty to once again being involved in sex trafficking. 

Jonathan Devon Price, aka Lil’ TY, who was a member of Black MOB, previously pled guilty to RICO in October 2015, where he admitted he was involved transporting females from San Diego, California to El Paso, Texas for purposes of prostitution.  He also admitted to transporting an adult female in San Diego, California to a hotel to engage in prostitution after an online ad had been posted.

Today, Price admitted that in November 2019, he transported a minor in San Diego, California to meet with “johns” for the purpose of her to engage in commercial sex acts.  In addition, Price caused online advertisements to be posted offering the minor for commercial sex. An undercover sting operation conducted by members of the San Diego Human Trafficking Task Force resulted in the arrest of Price, who was transporting the minor for prostitution. 

Price also admitted during his guilty plea that he used fraud, force and coercion against another adult female in order to cause her to engage in commercial sex acts.  This conducted occurred between June 2018 and November 2019, while Price was on federal supervised release.  As a result of his criminal conduct in November 2019, Price has violated his supervised release in his prior RICO case, Criminal Case No. 13CR4510-JAH. 

“Sex trafficking is a crime that causes devastating long-term effects for victims, especially minors,” said U.S. Attorney Robert Brewer. “Our office will continue to vigorously enforce federal laws that are in place to protect women and girls from the pain, humiliation and suffering associated with sex trafficking.” Brewer praised prosecutor Joseph Orabona and members of the San Diego Human Trafficking Task Force for their excellent work on this case.

A sentencing hearing is scheduled for January 4, 2021 at 10:00 a.m. before the U.S. District Judge John A. Houston.  Price has been detained in custody since his arrest in November 2019. 

This case was prosecuted by Assistant U.S. Attorney Joseph J.M. Orabona. This guilty plea is the result of the collaborative work by the FBI and the San Diego Police Department. 

DEFENDANTS                                Case Numbers: 20CR0852-JAH

Jonathan “Lil’ TY” Devon Price        Age: 30           San Diego, CA

SUMMARY OF CHARGES

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

Maximum Penalties: Ten-year mandatory minimum and a maximum of life in prison, Sex Offender Registration

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 Andrew R. Haden (619) 546-6961 and Timothy D. Coughlin (619) 546-6768 

NEWS RELEASE SUMMARY – October 13, 2020

SAN DIEGO – The Department of Justice announced today it has charged more than 14,200 defendants with firearms-related crimes during Fiscal Year (FY) 2020, despite the challenges of COVID 19 and its impact on the criminal justice process.

These cases have been a Department priority since November 2019 when Attorney General William P. Barr announced his commitment to investigating, prosecuting, and combatting gun crimes as a critical part of the Department’s anti-violent crime strategy. These firearms-related charges are the result of the critical law enforcement partnership between United States Attorneys’ Offices and the Bureau of Alcohol, Tobacco, Firearms and Explosives, led by Acting Director Regina Lombardo, who has made firearms-related investigations a priority.

“The number one priority of government is to keep its citizens safe,” said Attorney General Barr. “By preventing firearms from falling into the hands of individuals who are prohibited from having them, we can stop violent crime before it happens. Violating federal firearms laws is a serious crime and offenders face serious consequences.  The Department of Justice is committed to investigating and prosecuting individuals who illegally buy, sell, use, or possess firearms. Reducing gun violence requires a coordinated effort, and we could not have charged more than 14,000 individuals with firearms-related crimes without the hard work of the dedicated law enforcement professionals at the ATF, our U.S. Attorneys’ Offices across the country, and especially all of our state and local law enforcement partners.”

“Protecting the public from violent crime involving firearms is at the core of ATF’s mission,” commented ATF Acting Director Regina Lombardo.  “Every day the men and women of ATF pursue and investigate those who use firearms to commit violent crimes in our communities, many of whom are prohibited from possessing firearms from previous convictions.  ATF, in collaboration with the U.S. Attorneys’ Offices across the nation, is committed to bringing these offenders to justice for their egregious and violent criminal acts.”

“Each violent crime committed with a gun has a ripple effect that causes an entire community to feel vulnerable and fearful.  For that reason, reducing gun violence and enforcing federal firearms laws remain top priorities in this district,” said U.S. Attorney Robert Brewer.  “We are determined to make our communities safer by aggressively pursuing any individual who has acquired, possessed, or used a firearm in violation of federal law.”

Of the more than 14,200 defendants charged, 107 were prosecuted for federal firearms violations by the U.S. Attorney’s Office in the Southern District of California. 

Under federal law, it is illegal to possess a firearm if you fall into one of nine prohibited categories including being a felon, illegal alien, or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime.  It is also illegal to purchase – or even to attempt to illegally purchase - firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, is also a federal offense. 

In the Southern District of California, the majority of firearms cases were brought against felons who unlawfully possessed firearms.  In the last year, however, there was also an increased effort to prosecute individuals who were in possession of firearms in violation of a domestic violence restraining order.

For example, in October 2019, a San Diego Superior Court judge imposed a domestic violence restraining order upon Daniel Anthony Fischbeck. According to the criminal complaint, the restraining order explicitly prohibited Fischbeck from possessing firearms. On January 1, 2020, Fischbeck was arrested after violating the restraining order for the second time.  At the time of Fischbeck’s arrest, a Springfield XD .45 caliber handgun was found in his car.  He was then charged federally for several federal firearms offenses. Fischbeck recently pleaded guilty in federal court to being a methamphetamine addict while in possession of the Springfield handgun, in violation of Title 18, United States Code, Section 922(g)(3).  Fischbeck is set to be sentenced in federal court on November 2, 2020. U.S. v. Fischbeck, 20-CR-479-LAB.

The focus on domestic violence and firearms is supported by recent crime data.  In September, a report by the San Diego Association of Governments, also known as SANDAG, revealed that the San Diego region saw a 3 percent increase in domestic violence in the first half of 2020 over the same period last year.  SANDAG’s data shows more notable increases in domestic violence in certain local communities: Santee (18 percent); El Cajon (18 percent); and National City (74 percent).  Meanwhile, statistics cited by the National Coalition Against Domestic Violence indicate that one in three female murder victims are killed by intimate partners and that an abuser’s access to a firearm increases the risk of femicide by at least 400 percent.

The Department of Justice is committed to prosecuting these firearms offenses as well as using all modern technologies available to law enforcement such as the National Integrated Ballistic Information Network, known as NIBIN, to promote gun crime intelligence. Keeping illegal firearms out of the hands of violent criminals will continue to be a priority of the Department of Justice and we will use all appropriate, available means to keep the law abiding people of this country safe from gun crime. 

For more information on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atf-form-4473.     

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Andrew J. Galvin (619) 546-9721

NEWS RELEASE SUMMARY – October 13, 2020

SAN DIEGO – Micheline Pollock was indicted by a federal grand jury for participating in a scheme to defraud the United States Army Corps of Engineers (USACE) and the U.S. Navy Facilities Engineering Command (NAVFAC) in connection with construction contracts for military and humanitarian projects across Africa. 

According to the 98-count indictment, Pollock was the chief executive officer of Dover Vantage, a U.S. construction firm that specialized in expeditionary projects in Africa.  Between 2011 and 2018, Dover Vantage competed for and won construction contracts for various USACE and NAVFAC projects in Africa, including a maternity ward and a school for the deaf in Togo, and a military aircraft hangar in Niger.

These USACE projects were undertaken in support of the United States Africa Command (AFRICOM), one of 10 combatant commands within the U.S. Department of Defense.  AFRICOM’s mission is to support diplomacy and development with partner governments and militaries, to apply pressure to various violent extremist organizations, to increase security and U.S. influence, and to protect U.S. government personnel and property. To this end, AFRICOM spends billions of dollars in contracts, grants, and other funding for African militaries to increase their capabilities in fighting violent extremists such as Boko Haram, Al-Shabbab and ISIS. AFRICOM also funds humanitarian assistance projects to benefit populations in areas of Africa where violent extremist groups recruit membership

During the tenure of these contracts, Pollock and other individuals at Dover Vantage submitted fraudulent quality control plans with résumés of fictitious employees; fabricated quality control checklists, certifying quality control work that was never performed; fraudulent concrete strength test results; and fraudulent claims for construction that was never performed or that did not adhere to specification.  As a result of the fraudulent conduct, many of the structures constructed by Dover Vantage were so poorly constructed that they collapsed, including the aircraft hangar in Niger and a training facility in Senegal.  Most of the other structures constructed by Dover Vantage are now unusable. Pollock’s conduct has required USACE to reissue contracts, repair damaged buildings, and reduce operating capacity.

This case is the first arising from the Africa Strike Force initiative out of the Southern District of California, developed to combat fraud and corruption as the United States expends resources across Africa.

“To protect the American and coalition warfighter, vigilance does not end at our borders,” said U.S. Attorney Robert Brewer. “Where our military goes, we go, whether to support and defend military construction dollars or those dollars spent to improve the lives of the communities we assist. To combat fraud, waste, and abuse, we’ve toiled in Iraq, Afghanistan, and Asia-Pacific, and now, through our participation in the Africa Strike Force, we turn our substantial attention to Africa. Corrupt fraudsters in Africa beware, the bright light of justice now shines directly on you.” Brewer praised Assistant U.S. Attorneys Mark W. Pletcher and Andrew J. Galvin and agents from Defense Criminal Investigative Service and Department of the Army, Criminal Investigative Command, for their excellent work on this case.

“Those who seek to blatantly defraud the American taxpayer and jeopardize the safety of the American warfighter and then hide behind an elaborate web of lies will be held accountable” said Stanley A. Newell of Defense Criminal Investigative Service, Transnational Operations Field Office.  “Even in the most distant points on the globe, DCIS works tirelessly with our investigative partners of the U.S. Army Criminal Investigative Command and the United States Attorney’s Office to ferret out this type of egregious fraud and to protect the integrity of the Department of Defense procurement system.”

Pollock was arrested on September 22, 2020 in Tbilisi, Georgia by Georgian authorities based on a provisional arrest warrant issued at the request of the United States. She is currently in custody in Georgia and awaiting extradition proceedings.

This case is being investigated by the Defense Criminal Investigative Service, European Post of Duty in Germany, and the US Army Criminal Investigation Command, Major Procurement Fraud Unit, European Fraud Resident Agency.  Additional investigative assistance was rendered domestically and internationally by the Naval Criminal Investigative Service.  Substantial ongoing assistance in prosecuting this case has been provided by the Department of Justice’s Office of International Affairs.

The U.S. Attorney’s Office for the Southern District of California specially acknowledges the assistance provided by our international partners in Georgia, including the Office of the Prosecutor General of Georgia, Georgia Border Police, Isani Police Department, and the Isani Prosecutor’s Office.  

DEFENDANT:                                             Case Number 20-CR-3167-DMS

Micheline Pollock                                           Age:    50                    Dubai, United Arab Emirates

SUMMARY OF CHARGES

Count 1 -- Conspiracy to Defraud the United States – Title 18, U.S.C., Section 371

Counts 2-35 -- Wire Fraud – Title 18, U.S.C., Section 1343

Counts 36-98 -- Aggravated Identity Theft – Title 18, U.S.C., Section 1028A

AGENCY

Department of Defense, Defense Criminal Investigative Service

Department of the Army, Criminal Investigative Command

*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. Attorney Matthew Brehm (619) 546-8983

SAN DIEGO – Ryan W. Nelson of San Diego pleaded guilty in federal court today to three robberies, including two bank robberies and the armed robbery of a shoe store.

Nelson entered his guilty pleas to the three counts before U.S. Magistrate Judge Michael S. Berg. Nelson admitted 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.

According to Nelson’s plea agreement, 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 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 at the U.S. Bank teller window at Vons Supermarket on August 15, 2019

 

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 at the Wells Fargo teller window at Vons Supermarket on August 23, 2019

 

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 .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.

"These robberies were meticulously planned for maximum impact on the victims and maximum payout," said U.S. Attorney Robert Brewer. "The threat of violence is a terrifying experience that these victims will never forget." 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 San Diego FBI Violent Crimes Task Force takes their work very seriously, said FBI Special Agent in Charge Suzanne Turner. "Robberies committed with the threat of violence and while using a firearm is a top priority for our agents and task force officers. The bank tellers, store workers, and San Diego citizens have the right to be free from violent criminal acts that threaten the safety and security of our community."

Nelson will be sentenced on January 11, 2021 at 9 a.m. by District Court Judge Cynthia Bashant.

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