Southern District of California

A California couple pleaded guilty yesterday to conspiring to commit mail fraud and tax evasion, 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, married couple Geraldine Hill and Clayton Hill operated On Your Feet (OYF), also known as 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 by falsely representing to the donors that the items would be given to needy recipients. In fact, the Hills made charitable donations of only about $13,000, sold the remaining donated items, and used the proceeds to financially enrich themselves and others. To conceal their conduct from the Internal Revenue Service (IRS), the Hills filed false charitable tax returns for OYF and false personal tax returns that did not report the income they received from their scheme.

“The Hills not only evaded their taxes, but they did so by abusing their company’s tax-exempt charitable status and thereby cheated not only the public fisc but the donors and intended beneficiaries of the donations,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman. “As the guilty pleas make clear, this conduct will not go unpunished.”

“I am committed to using the resources of the U.S. Attorney’s Office in the Southern District of California to aggressively pursue fraudsters and tax cheats,” said U.S. Attorney Robert S. Brewer Jr. for the Southern District of California. “The conduct by Geraldine and Clayton Hill is particularly offensive because they used the benefits afforded by the 501(c)(3) status of their charity to defraud donors and conceal their profits. By abusing the generosity of companies and individuals who put their faith in the promises made by the Hills, the defendants threatened to undermine the trust and integrity underpinning charitable giving.”

“Geraldine Hill and Clayton Hill exploited the public trust and charitable giving by using their charity to solicit over $16 million in goods from hardworking businesses and falsely promising to donate those goods to assist low income families and individuals in need,” said Ryan L. Korner, Special Agent in Charge of the IRS Criminal Investigation Division. “Instead, the Hills resold the goods and profited over $1.34 million which they spent on vehicles, vacations, and entertainment, as well as personal expenses for their family members. The Hills concealed their fraud by filing false tax returns on behalf of the charity and failing to report their illicit income to the IRS. Their guilty pleas evidence the hard work of IRS Criminal Investigation Special Agents to bring to justice those that defraud businesses in the name of charity, and who benefit themselves instead of serving those most in need.”

“While fraud is always wrong, the theft of charitable donations that were to be used to help San Diego’s low income families is particularly disheartening,” said Acting FBI Special Agent in Charge Omer Meisel. “This type of fraud and deceit for personal gain simply cannot be tolerated. The FBI is committed to ensuring that white collar predators don’t prevent those less fortunate from receiving all the benefits that generous donors provide to seemingly legitimate non-profit organizations.”

U.S. District Judge Dana M. Sabraw scheduled the sentencing for Aug. 28, 2020. At sentencing, the Hills face a maximum sentence of five years in prison for each mail fraud conspiracy and tax evasion. The Hills also face a period of supervised release, restitution, and monetary penalties.

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 John Parmley (619) 546-7957   

NEWS RELEASE SUMMARY – June 10, 2020

SAN DIEGO – Rudy Alvarez of Lemon Grove was charged in federal court today with knowingly aiming the beam of a laser pointer at a San Diego Police helicopter as the aircraft flew over protests in the wake of George Floyd’s death in Minneapolis.

According to a federal complaint, the incident occurred at a large demonstration that passed through the area of 500 University Avenue in Hillcrest on June 6 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 impeded their ability to safely operate the helicopter.

“Aiming a laser pointer at or near an aircraft could cause distraction or blindness to a pilot and the consequences could be devastating,” said U.S. Attorney Robert Brewer. “We support the Constitutional rights of free speech and assembly, but it is our duty to protect the public and law enforcement from danger.”

“The use of laser pointers upon law enforcement aircraft threatened the safety of the police officers protecting lawful protestors and created a potentially dangerous incident,” said FBI San Diego Acting Special Agent in Charge Omer Meisel. “The FBI is focused on identifying and investigating individuals who commit crimes that threaten the safety of our community and will continue to work with our local partners to pursue federal prosecutions.”

Alvarez was arraigned in federal court today. U.S. Magistrate Judge Daniel E. Butcher set bond at $5,000. The next hearing is scheduled for June 23 at 9 a.m. before Judge Butcher.

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.

Based on a description of the man pointing the laser, San Diego police detectives located and later identified Rudy Alvarez in the crowd of demonstrators in the vicinity of 600 G Street at approximately 9:45 p.m. One detective noted that Alvarez was wearing the same clothing as described by the officers in the helicopter. Alvarez was arrested without incident.

After his arrest, detectives found a high-powered gray metal laser pointer in Alvarez’s front left pant pocket.

DEFENDANT                                               Case Number 20MJ2212                                         

Rudy Alvarez                                                  Age: 24                       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

AGENCY

San Diego Police Department

Federal Bureau of Investigation

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

 

 

 

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

NEWS RELEASE SUMMARY – June 8, 2020

SAN DIEGO – Timothy Huss of El Cajon was sentenced in federal court today to 41 months in prison and ordered to pay restitution for robbing two San Diego banks in 2019.

Huss pleaded guilty on November 19, 2019, admitting that he robbed the banks by presenting demand notes that threatened the tellers. He was apprehended by police officers after he fled the second robbery.

“Bank robberies are terrifying and dangerous experiences for tellers and customers,” said U.S. Attorney Robert Brewer. “Thanks to the hard work of prosecutor Matt Brehm and our law enforcement partners, we achieved justice in this case.”

In his plea agreement, Huss admitted that, on September 14, 2019, at approximately 9:46 a.m., he entered the Chase Bank branch at 3490 College Avenue in San Diego, approached the teller window and presented the teller with a demand note, which requested money and threatened the teller. The teller complied with Huss’ demands and provided him with approximately $4,410. He made his getaway on foot.

Huss also admitted that, on September 20, 2019, at approximately 3:13 p.m., he entered the Well Fargo branch at 1350 Fashion Valley Road in San Diego and approached the teller window. Huss provided the teller with a demand note which read, “Keep Actin (sic) Normal. Put the cash in a bag no die (sic) or GPS or Im coming back.” The teller passed $520 in U.S. currency and $40 in bait bills to Huss, including a GPS tracker pack with a specific serial number. Huss took the bills and bait bills, placed them in a laptop bag, took the demand note and fled the bank on foot.

“The successful conclusion of this case was due to coordinated and ongoing teamwork between the SDPD Robbery Unit, the FBI, and the Violent Crime and Human Trafficking Section,” said San Diego Police Lt. Julie Epperson. “Collaboration with our law enforcement partners creates a stronger defense against criminals who prey on the public.”

FBI San Diego Acting Special Agent-in-Charge Omer Meisel commented, “The FBI will continue to work with our law enforcement partners to keep the San Diego community safe from those whose criminal behavior threatens the well-being and security of our citizens.”

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.

DEFENDANT                                               Case Number 19cr4038-W                          

Timothy Huss                                                 Age: 30                                               El Cajon, CA

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 Investigation

San Diego Police Department

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

NEWS RELEASE SUMMARY – June 9, 2020

SAN DIEGO –Claudia Castillo of Tijuana was sentenced in federal court today to eight months in custody for smuggling endangered sea cucumber into the United States from Mexico. U.S. District Judge Jeffrey T. Miller handed down the sentence and also ordered Castillo to pay $12,000 restitution to the government of Mexico.

Castillo previously pleaded guilty to Conspiring to Import Merchandise Contrary to Law, in violation of Title 18, United States Code, Section 371 and 545.

At the time of her guilty plea, Castillo admitted that between January 19, 2018 and September 4, 2019, she conspired with others to smuggle and illegally import sea cucumbers of the species Isostichopus fuscus into the United States from Mexico. Castillo obtained bags containing approximately 2 kg of the sea cucumbers from others in Mexico and would either smuggle the packages into the United States herself, or deliver the packages to others she recruited in order to be smuggled into the United States. Castillo directed the individuals she recruited to deliver the sea cucumbers to a self-storage unit near the border in San Ysidro, California, where the sea cucumber could be accessed by others for further transportation and sale

Castillo had the individuals she recruited provide her with photographs of the sea cucumbers within the self-storage unit as proof of delivery, and when delivery was confirmed, she would pay them $7 for each bag that was delivered. Castillo herself was stopped at the border with six bags of undeclared sea cucumbers hidden in her vehicle in May of 2018.

The sea cucumbers involved were identified as Isostichopus fuscus, a species listed on Appendix III of the Convention on International Trade in Endangered Species (CITES).  In order to import a CITES species into the United States, the importer must comply with CITES and its implementing regulations, pursuant to Section 1538(c)(1) of Title 16 of the United States Code.  Sections 23.13 and 23.27 of Title 50 of the Code of Federal Regulations prohibits the importation of species listed under Appendix II and III, without a CITES certificate of origin and a CITES export permit from the originating country.

Castillo knew that neither she nor her assistants possessed the necessary CITES documents for the sea cucumber. In order to import a commercial quantity of sea cucumber into the United States, a license from the U.S. Fish and Wildlife Service (FWS) is required, pursuant to Section 1538(d)(1) of Title 16 of the United States Code.   Neither Castillo nor her associates possessed such a license.  The fair market value of the sea cucumbers illegally imported as a part of this conspiracy was between $40,000 and $95,000.

Judge Miller required payment of restitution to the government of Mexico of $12,000 for the loss of their natural resources, based on the defendant’s ability to pay.

“Illegal trafficking in fish and wildlife is big business,” said U.S. Attorney Robert Brewer.  “We are committed to working with our law enforcement partners to protect endangered wildlife.” Brewer thanked prosecutor Melanie Pierson and U.S. Fish and Wildlife agents for their hard work on this case.

“Illegal wildlife trafficking is a serious crime that impacts species around the world including important  marine species that are critical to the ocean ecosystems,” said Dan Crum, Special Agent in Charge of the U.S. Fish and Wildlife Service Office of Law Enforcement. “The U.S. Fish and Wildlife Service is committed to impeding this illicit trade coming through our borders, and hope that today's sentencing will send a message to others who choose to ignore the law.”

DEFENDANT                                               Case Number 19cr4039-JM                        

Claudia Castillo                                              Age: 49                                   Tijuana, Mexico

SUMMARY OF CHARGES

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

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

AGENCY

U.S. Fish and Wildlife Service, Office of Law Enforcement; National Oceanic and Atmospheric Administration (NOAA), Office of Law Enforcement

Assistant U. S. Attorneys Matthew Brehm (619) 546-8983 and Shital Thakkar (619) 546-8785

NEWS RELEASE SUMMARY – June 8, 2020

SAN DIEGO – Juan Marquis Holiday of San Diego was sentenced in federal court today to 85 years in prison after a federal jury found him guilty of robbing and attempting to rob 10 local businesses by brandishing a firearm during the robberies and, on five occasions, discharging a firearm.

During the sentencing hearing, U.S. District Judge Anthony J. Battaglia noted that Holiday’s crimes were “violent and aggressive” and “caused fear in the hearts of victims.” He added: “The community should not and will not tolerate this type of physical violence and misbehavior.”

During trial, more than 12 victims testified that they were threatened with a firearm during the robberies, which occurred in January and April of 2017. Some of those victims also described having shots fired past their heads, being pistol whipped, kicked and beaten.

“This defendant committed 10 armed robberies in less than five months,” said U.S. Attorney Robert Brewer. “The many victims of these robberies will forever live with the emotional scars of being threatened with a firearm. We are gratified that today’s sentence recognizes the pain and suffering this defendant inflicted on our community.” Brewer thanked prosecutor Matt Brehm as well as our law enforcement partners for their hard work on this case.

“The violence, intimidation, and fear imposed by Mr. Holiday was stopped when he was arrested by our law enforcement team, but today the victims of this terrifying crime spree can begin to heal knowing that justice has been delivered,” said Omer Meisel, Acting Special Agent-in-Charge of the San Diego Field Office.  “The FBI will continue to work with our law enforcement partners to ensure violent crime is stopped and follow through until justice is reached.”

Holiday’s co-defendant, Don Wayne Jones III, pleaded guilty in 2018 and was sentenced to 30 years and one day in custody. 

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, labor trafficking and alien smuggling. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.

DEFENDANT                                               Case Number 17cr1370-AJB                                              

Juan Marquis Holiday                                    Age: 27                                   San Diego, CA

SUMMARY OF CHARGES

Interference with Commerce by Threats or Violence – Title 18, U.S.C., Section 1951(a)

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

Attempted Interference with Commerce by Threats or Violence – Title 18, U.S.C., Section 1951(a)

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

Brandishing a Firearm During and in Relation to a Crime of Violence –

Title 18, U.S.C., Section 924(c)

Maximum penalty: Life in prison; a mandatory minimum seven years in prison; and $250,000 fine

Discharging a Firearm During and in Relation to a Crime of Violence –

Title 18, U.S.C., Section 924(c)

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

AGENCIES

Federal Bureau of Investigation

San Diego Police Department

San Diego Sheriff’s Department

La Mesa Police Department

VICTIM BUSINESSES

 

Robbery No.

Date

Victim

Address

1

1/5/2017

Arco Gas Station

3724 Del Sol Blvd, San Diego, CA

2

1/11/2017

Parry Liquor

4707 Federal Blvd., San Diego, CA

3

1/11/2017

Par Liquor

5055 Federal Blvd., San Diego, CA

4

1/11/2017

Greene Cat Liquor

5102 Imperial Avenue, San Diego, CA

5

4/6/2017

Market at the Ranch

10299 Scripps Trail, San Diego, CA

6

4/19/2017

7-Eleven

9365 Jamacha Blvd., Spring Valley, CA

7

4/20/2017

Eastridge Liquor

7705 University Ave. La Mesa, CA

8

4/20/2017

Apollo Market

2327 Reo Drive, San Diego, CA

9

4/20/2017

G&M Market

8903 Jamacha Road, Spring Valley, CA

10

4/22/2017

Victoria’s Mexican Grill

1912 Coronado Ave., San Diego, CA

 

 

 

Assistant U. S. Attorney Andrew Haden (619) 546-6961

NEWS RELEASE SUMMARY – June 9, 2020

SAN DIEGO – Zachary Alexander Karas of San Diego was charged with possessing incendiary devices known as Molotov cocktails at a protest that began on May 30th in La Mesa.

According to a complaint, Karas and his girlfriend, Kali Braj Jonkuet, were sitting on the pavement at the corner of Allison Avenue and Spring Street, in front of trolley tracks, as part of the protest in La Mesa.

At the time of the protest, several fires had been set that damaged buildings and property. Officers gave orders to the crowd, including Karas, to disperse for an unlawful assembly. Karas was arrested after he failed to leave his position. After his arrest, officers discovered that Karas possessed two glass bottles with wicks that contained gasoline.  Karas also had fireworks in his possession at the time of his arrest.

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

“The Constitution strongly protects the First Amendment right of all to speak out and peacefully protest,” said U.S. Attorney Robert Brewer. “My office is committed to protecting that First Amendment right. Violence, however, by a relatively small number of opportunists who sought to wreak havoc, destroy property, and threaten the safety of peaceful protestors will not be tolerated.”

“ATF partners with its local, state and federal partners to work together to arrest dangerous individuals who pose the greatest threat to public safety,” said ATF Special Agent in Charge of Los Angeles Field Division Monique Villegas. “These partnerships are true force multipliers that enable law enforcement to identify, investigate and seek prosecution against individuals who act out violently within our communities.”

“The San Diego community has the right to be safe from violence and criminal activity while engaging in lawful protests,” said FBI Acting Special Agent in Charge Omer Meisel.  “The possession of an incendiary device threatened the safety of the community. The FBI will continue to work closely with our state, local and federal law enforcement partners and prosecutors to protect our citizen’s right to engage in lawful protest from those individuals engaged in violence and criminal activity.”

This Karas 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 S. Brewer, Jr., 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, labor trafficking and alien smuggling. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.

DEFENDANT                                               Case Number 20mj2186                                          

Zachary Alexander Karas                               Age: 28                                   San Diego, CA

SUMMARY OF CHARGES

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

Maximum penalty: 10 years’ imprisonment and $250,000 fine

AGENCIES

Bureau of Alcohol, Tobacco, Firearms and Explosives

Federal Bureau of Investigation

La Mesa Police Department

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

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

NEWS RELEASE SUMMARY – June 9, 2020

SAN DIEGO – A husband and wife pleaded guilty today in federal court to using a charity to defraud donors and to evade taxes.

Geraldine and Clayton Hill appeared before U.S. Magistrate Judge Linda Lopez to admit that they used On Your Feet, Inc. (“OYF”), a.k.a. Family Resource Center (“FRC”), a 501(c)(3) tax-exempt non-profit organization that operated in Spring Valley, California, to defraud donors and the Internal Revenue Service (“IRS”). FRC/OYF claimed to provide “assistance to low income families and individuals in need to better their living conditions and quality of life.” According to documents filed in court today, beginning at least as early as  March 2009, 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 admitted today to violating those promises by knowingly reselling donated merchandise and using the proceeds from the sale of donated items to financially support themselves, their family members and other associates. Forever 21, Feed the Children, Brooks and Goods360 were among the defrauded companies. The Hills tricked these companies such as Forever 21, Feed the Children, Brooks and Goods360 into donating millions of dollars of goods to OYC/FRC through their fraud. Based on the 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.

The Hills admitted today that between 2011 and 2016, they personally received proceeds from the fraud totaling over $1.3 million and paid no income taxes.

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 . . . Every individual receiving a donation is required to register and sign a form saying none of the merchandise will be resold.” The Hills also falsely represented to Forever 21 that the “[m]ajority of the [OYF/FRC] personnel are volunteer members and are all required to sign a consent form stating that merchandise may not be taken or sold.”  In an email on May 20, 2015, to Forever 21, Geraldine Hill falsely claimed that the “routine for processing donated items” included “cutting [the] inside label in half” and “defacing [the] inside label with permanent marker,” and further claimed 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 the statement was false because at least as early as May 30, 2012, Goods360 had alerted Geraldine Hill that Disney no longer wanted their donations to go to OYF/FRC because the donated goods were appearing at local flea markets and being sold. For example, in June 2015, Forever 21 donated to OYF/FRC approximately 161 pallets of clothing, which was valued by Forever 21 at $2.9 million (cost)/$5.6 million (retail). Immediately upon receiving the pallets from Forever 21, the Hills sold 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,” causing Forever 21 to donate another 16 pallets of clothing on October 27, 2016, which the Hills acknowledged in a letter to Forever 21 that the donated goods had a retail value of $314,371. Immediately upon receiving the pallets from Forever 21 in October 2016, the Hills sold the donated goods to the same for-profit discount retailer.

Instead of paying income taxes, the Hills spent nearly $380,000 of the fraudulent proceeds on personal expenses including luxury retail purchases, vacations, entertainment, and vehicles, in addition to spending more than $322,000 in cash. 

In order to conceal their 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 OYF received less than $25,000 in gross receipts in tax year 2009, and less than $50,000 in tax years 2011-2015.  As a result of the Hills’ fraudulent concealment of their income, they caused an estimated U.S. individual income tax loss for 2013-2014 of $50,933.

Although the Hills had no legitimate payroll through OYF, they falsified pay stubs purporting to show salaries paid and taxes withheld in order to advance other fraudulent schemes. For example, they falsified pay stubs claiming that defendant Clayton Hill earned over $100,000 salary (even though OYF had never issued paystubs or W2s, and Hill was not claiming income in any tax filing) and used the false pay stubs for a rental application to rent a home that cost $6,000 per month. 

U.S. Attorney Robert Brewer expressed his appreciation to Assistant U.S. Attorney Rebecca Kanter, Principal Deputy Assistant Attorney General Richard E. Zuckerman and Trial Attorney Valerie Preiss of the Justice Department’s Tax Division for supporting this prosecution.

“I am committed to using the resources of the U.S. Attorney’s Office in the Southern District of California to aggressively pursue fraudsters and tax cheats,” said Brewer. “The conduct by Geraldine and Clayton Hill is particularly offensive because they used the benefits afforded by the 501(c)(3) status of their charity to defraud donors and conceal their profits. By abusing the generosity of companies and individuals who put their faith in the promises made by the Hills, the Defendants threatened to undermine the trust and integrity underpinning charitable giving.”

“Geraldine Hill and Clayton Hill exploited the public trust and charitable giving by using their charity to solicit over $16 million in goods from hardworking businesses and falsely promising to donate those goods to assist low income families and individuals in need,” said Ryan L. Korner, Special Agent in Charge of the IRS Criminal Investigation division. “Instead, the Hills resold the goods and profited over $1.34 million which they spent on vehicles, vacations, and entertainment, as well as personal expenses for their family members. The Hills concealed their fraud by filing false tax returns on behalf of the charity and failing to report their illicit income to the IRS.  Their guilty pleas are evidence of the hard work of IRS Criminal Investigation Special Agents to bring to justice those that defraud businesses in the name of charity, and who benefit themselves instead of serving those most in need.”

“While fraud is always wrong, the theft of charitable donations that were to be used to help San Diego’s low income families is particularly disheartening,” said Acting FBI Special Agent in Charge Omer Meisel. “This type of fraud and deceit for personal gain simply cannot be tolerated. The FBI is committed to ensuring that white collar predators don’t prevent those less fortunate from receiving all the benefits that generous donors provide to seemingly legitimate non-profit organizations.”

Sentencing is scheduled for August 28, 2020 before U.S. District Judge Dana M. Sabraw. At sentencing, the Hills face a maximum sentence of five years in prison for each mail fraud conspiracy and tax evasion charge. The Hills also face a period of supervised release, restitution, and monetary penalties.

DEFENDANTS                                            Case Number 20CR0783-DMS                              

Geraldine Hill                                                 Age: 59                                   Bonita, CA

Clayton Hill                                                    Age: 58                                   Bonita, CA

SUMMARY OF CHARGES

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

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

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

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

AGENCIES

Internal Revenue Service Criminal Investigations

Federal Bureau of Investigation

 

 

 

NEWS RELEASE SUMMARY – June 3, 2020

SAN DIEGO – The U.S. Department of Justice yesterday awarded nearly $400 Million for law enforcement hiring to advance community policing, through the Department’s Office of Community Oriented Policing Services (COPS Office) COPS Hiring Program (CHP).  The Attorney General announced funding awards to 596 law enforcement agencies across the nation, which allows those agencies to hire 2,732 additional full-time law enforcement professionals. 

In the Southern District of California, Chula Vista Police Department will receive $750,000 to fund six officers and the City of Brawley and the La Jolla Band of Indians will each receive $125,000 to fund one officer. “The Department of Justice is committed to providing the police chiefs and sheriffs of our great nation with needed resources, tools, and support.  This funding will bolster their ranks and contribute to expanding community policing efforts nationwide,” said Attorney General William P. Barr.  “A law enforcement agency’s most valuable assets are the men and women who put their lives on the line every day in the name of protecting and serving their communities.”

“Particularly in light of this district’s proximity to the Southwest Border, it is imperative that local police agencies receive the resources they need to maintain safe and secure neighborhoods,” said U.S. Attorney Robert Brewer.  “I am pleased that DOJ officials recognized the importance of shoring up staffing in our region by funding eight officers to address critical needs in three area communities.”

The COPS Hiring Program is a competitive award program intended to reduce crime and advance public safety through community policing by providing direct funding for the hiring of career law enforcement officers.  In addition to providing financial support for hiring, CHP provides funding to state, local, and tribal law enforcement to enhance local community policing strategies and tactics.  In a changing economic climate, CHP funding helps law enforcement agencies maintain sufficient sworn personnel levels to promote safe communities.  Funding through this program had been on hold since the spring of 2018 due to a nationwide injunction that was lifted earlier this year.

CHP applicants were required to identify a specific crime and disorder problem focus area and explain how the funding will be used to implement community policing approaches to that problem focus area.  Forty-three percent of the awards announced will focus on violent crime, while the remainder of the awards will focus on a variety of issues including school-based policing to fund school resource officer positions, building trust and respect, and opioid education, prevention, and intervention.  The COPS Office received nearly 1,100 applications requesting more than 4,000 law enforcement positions.

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

SAN DIEGO – Last week on Memorial Day, in Minneapolis, MN, George Floyd’s life was taken violently and without justification by law enforcement. His death awakened echoes of recent and historic racism, inequality, and excessive force that has disproportionately affected African-Americans in our country. While this tragic event and subsequent violence over several days affects us all, I appreciate that many of our neighbors are in particular pain and feel vulnerable simply because of the color of their skin.

Having proudly taken an oath to uphold our Constitution, I am always mindful that the laws must be enforced without prejudice or favor: For the benefit and protection of all, regardless of the identity of the perpetrator. The Constitution protects against unreasonable force under color of law. As law enforcement leaders, we must hold everyone—including those who wear the uniform—to the same standard under the law. The obligation to do so is self-evident, but it bears emphasizing that the equal commitment to the law is the only way to protect both victims of police violence and those men and women in uniform who serve our communities with honor. 

Wearing a police uniform is one of the hardest jobs in society. We are all indebted to the self-sacrifice and commitment to our communities by those who protect us. But everyone in law enforcement—prosecutors and peace officers—can, and must, do better. The United States Attorney’s Office remains steadfast in its commitment to assisting our law enforcement partners to adopt and employ best policing practices and most effectively and fairly protect all members of our communities. 

At the same time, we are equally committed to our long-standing involvement with civic, faith, and other community organizations to combat hate and help our communities chart a better path forward. We will continue our collaboration with the San Diego Regional Hate Crime Coalition to coordinate community outreach, open dialogue, and the prevention of hate incidents and discrimination. With our local and state partners, we will continue to zealously investigate and prosecute hate crimes that cause far-reaching damage to entire communities.

The Constitution strongly protects the First Amendment right of all to speak out and peacefully protest. The violence by a relatively small number of opportunists who have sought to wreak havoc, destroy property, and threaten the safety of peaceful protestors and law enforcement alike, clearly detract from our ability to heal from the wounds of Mr. Floyd’s death and to seek that better path forward. One of the great defining features of this country is our adherence to the rule of law. We do not have to choose between our obligation to enforce the law and our personal outrage. Nor are we required to leave behind our own feelings of empathy and sadness in enforcing the law against those who seek to break it, while facilitating peaceful protest, another hallmark of American democracy.

We are fortunate to be a part of a strong, resilient and collaborative San Diego community. I have been in constant contact over the last four days with our federal, state, and local law enforcement partners to support and coordinate our collective response to acts of violence as we protect peaceful protestors and our communities. The cooperation and collaboration among our first responders has been impressive, and their intent to work with our community and address their concerns is clear. Together, while condemning the underlying problems that led to Mr. Floyd’s senseless death and the violence in the aftermath, we are taking a strong stand and affirming our enduring commitment to the equal protection and justice for all.

 

A Calexico City, California councilman and mayor pro tem, along with a commissioner on the city’s Economic Development and Financial Advisory Commission, were charged in federal court today with accepting cash bribes in exchange for promises of official action by the city.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert S. Brewer Jr., and Acting Special Agent in Charge Omer Meisel of the FBI’s San Diego Field Office made the announcement.

According to a charging document, David Romero 36, and Bruno Suarez Soto, 28, both of Calexico, California, accepted $35,000 in cash bribes from an undercover FBI agent who they believed represented investors seeking to open a cannabis dispensary in Calexico.  In return, Romero and Soto “guaranteed” the rapid issuance of a city permit for the dispensary, and to revoke or hinder other applicants if necessary to ensure that the bribe payer’s application was successful. Moreover, both men admitted they had taken bribes from others in the past, according to the charging document.

In addition to being a councilman, Romero serves as Calexico’s mayor pro tem, meaning he was set to become mayor in July 2020.  Soto was recently appointed to the city commission responsible for promoting business and community growth and coordinating with prospective developers to help them invest in the city of Calexico.

The charges allege that during a Dec. 19, 2019, meeting at a restaurant in Calexico with the undercover FBI agent, Romero and Soto agreed to fast-track the agent’s purported application for a cannabis dispensary permit and guaranteed its rapid issuance in exchange for a $35,000 bribe. The defendants also offered to delay permit applications by competitors, court records said.

The charging document further alleges that toward the conclusion of the Dec. 19, 2019 meeting, when the undercover agent asked if Romero and Soto might later ask for more than the $35,000 payment, Romero assured him that they would not.  “This is done.  Set and sealed,” Romero allegedly said.  Romero explained that he and Soto would require the money to be paid up front, however, because they had done similar work for other people, and those people had not paid the agreed-upon fee after the favors had been rendered.  Soto later added, “This isn’t our first rodeo.” Romero and Soto agreed to accept payment of the $35,000 from the agent in two installments, however: half up front, and half “when it’s a for sure thing.” 

According to court filings, at this meeting the undercover agent asked whether the payment of $35,000 would “get us in front of the line” of applicants.  Soto answered, “Hell yeah.”  Romero added that he “didn’t want to say it in front of everybody, but it will.”

On Jan. 9, 2020, Romero and Soto attended a second meeting with the undercover agent at a restaurant in El Centro, California.  During the meeting, according to court records, Romero reminded the undercover agent how difficult it was to work with the city of Calexico, and how fortunate it was that the agent was working with Romero.  Soto later added that in return for the bribe, Romero would cut through “so much [expletive] [red] tape that exists” with the city.

During a discussion of the approval process for the permit application referenced in court records, Romero explained that the people who have to approve the undercover agent’s license were “my best friends at the entire City Hall.”  When asked if the “best friends” had already signed off on the plan, Romero responded “[expletive], yeah!” and laughed.

Court filings reveal that at the conclusion of the Jan. 9, 2020 meeting, in the parking lot outside the restaurant, with Romero looking on, the undercover agent handed Soto $17,500 in cash and explained that he divided the first installment of the bribe into two envelopes: one with $8,800 and another with $8,700.  The agent asked whether “we’re good,” and Romero responded, “Trust me” and added, “In my line of business, I can’t [expletive] up.  Which means he [Soto] can’t [expletive] up.”

According to the charging documents, the defendants allegedly accepted the second installment, $17,500 in cash, during a third meeting on January 30 in a parking lot outside a restaurant in El Centro.  Court documents further allege both men also admitted to creating a shell corporation to launder the proceeds of their bribery scheme.

The charging document also alleges that both men lied to the FBI when interviewed by agents at the conclusion of the January 30 meeting.  According to court filings, Romero falsely denied being part of any agreement with the undercover agent, and denied that anyone had made any “guarantees” to the agent.  Similarly, Soto falsely denied making any “guarantees” to the undercover agent and denied receiving any prior payments from the agent. 

The FBI investigated the case. Trial Attorney Joshua Rothstein of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Nicholas Pilchak are prosecuting the case.

A federal charge is merely an accusation.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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

NEWS RELEASE SUMMARY – May 21, 2020

EL CENTRO – Calexico City Councilman and Mayor Pro Tem David Romero, along with Bruno Suarez-Soto, a commissioner on the city’s Economic Development and Financial Advisory Commission, were charged in federal court today with accepting cash bribes in exchange for promises of official action by the city.

The defendants were arraigned today via video teleconference before U.S. Magistrate Judge Bernard G. Skomal. They were released on $10,000 personal appearance bonds secured by their own signatures. The next court date is July 2, 2020 at 10:30 a.m. before U.S. District Judge Cathy Ann Bencivengo.

According to a charging document, Romero and Soto accepted $35,000 in cash bribes from an undercover FBI agent who they believed represented investors seeking to open a cannabis dispensary in Calexico. In return, Romero and Soto “guaranteed” the rapid issuance of a city permit for the dispensary, and to revoke or hinder other applicants if necessary to ensure that the bribe payer’s application was successful. Moreover, both men admitted they had taken bribes from others in the past, according to the charging document. Referring to this $35,000 payment, it is alleged they told the undercover agent, “This isn’t our first rodeo.”

In addition to being a Councilman, Romero serves as Calexico’s Mayor Pro Tem, meaning he was set to become Mayor in July 2020. Soto was recently appointed to the City commission responsible for promoting business and community growth and coordinating with prospective developers to help them invest in the City of Calexico.

“Public officials must act with honesty and integrity when doing the public’s business,” said U.S. Attorney Robert Brewer. “If civic leaders won’t uphold these standards, we will. We allege that these defendants traded on their positions of trust, selling the integrity of government in exchange for thousands of dollars. We will vigorously enforce the law whenever a public official puts his own greed ahead of the interests of his constituents.”

“Public corruption remains the FBI's top criminal priority.  As such, the FBI in San Diego and Imperial County has a robust public corruption program that is dedicated to uncovering criminal conduct of public officials,” said Acting FBI SAC Omer Meisel.  “The investigation of Mr. Romero and Mr. Suarez-Soto serves as another example of the FBI's commitment toward accountability for those serving the public and holding positions of trust.”

The charges allege that during a December 19, 2019 meeting at a restaurant in Calexico with the undercover FBI agent, Romero and Soto agreed to fast-track the agent’s purported application for a cannabis dispensary permit and guaranteed its rapid issuance in exchange for a $35,000 bribe. The defendants also offered to delay permit applications by competitors, court records said.

The charging document further alleges that toward the conclusion of the December 19, 2019 meeting, when the undercover agent asked if Romero and Soto might later ask for more than the $35,000 payment, Romero assured him that they would not. “This is done. Set and sealed,” Romero allegedly said.  Romero explained that he and Soto would require the money to be paid up front, however, because they had done similar work for other people, and those people had not paid the agreed-upon fee after the favors had been rendered.  Soto later added, “This isn’t our first rodeo.” Romero and Soto agreed to accept payment of the $35,000 from the agent in two installments, however: half up front, and half “when it’s a for sure thing.” 

According to court filings, at this meeting the undercover agent asked whether the payment of $35,000 would “get us in front of the line” of applicants.  Soto answered, “Hell yeah.”  Romero added that he “didn’t want to say it in front of everybody, but it will.”

On January 9, 2020, Romero and Soto attended a second meeting with the undercover agent at a restaurant in El Centro, California.  During the meeting, according to court records, Romero reminded the undercover agent how difficult it was to work with the City of Calexico, and how fortunate it was that the agent was working with Romero. Soto later added that in return for the bribe, Romero would cut through “so much bullshit [red] tape that exists” with the City.

During a discussion of the approval process for the permit application referenced in court records, Romero explained that the people who have to approve the undercover agent’s license were “my best friends at the entire City Hall.”  When asked if the “best friends” had already signed off on the plan, Romero responded “Fuck, yeah!” and laughed.

Court filings reveal that at the conclusion of the January 9, 2020 meeting, in the parking lot outside the restaurant, with Romero looking on, the undercover agent handed Soto $17,500 in cash and explained that he divided the first installment of the bribe into two envelopes: one with $8,800 and another with $8,700. The agent asked whether “we’re good,” and Romero responded, “Trust me” and added, “In my line of business, I can’t fuck up.  Which means he [Soto] can’t fuck up.”

According to the charging documents, the defendants accepted the second installment, $17,500 in cash, during a third meeting on January 30 in a parking lot outside a restaurant in El Centro.  Court documents further allege both men also admitted to creating a shell corporation to launder the proceeds of their bribery scheme.

The charging document also alleges that both men lied to the FBI when interviewed by agents at the conclusion of the January 30 meeting.  According to court filings, Romero falsely denied being part of any agreement with the undercover agent, and denied that anyone had made any “guarantees” to the agent.  Similarly, Soto falsely denied making any “guarantees” to the undercover agent and denied receiving any prior payments from the agent. 

U.S. Attorney Brewer praised Assistant U.S. Attorney Nicholas Pilchak, DOJ Public Integrity Section trial attorney Joshua Rothstein and FBI agents for working hard to achieve justice in this matter.

The case against Romero and Suarez-Soto is a public corruption investigation being conducted by the FBI and the U.S. Attorney’s Office. Any member of the public who has information related to this or any other public corruption matter in Imperial County or San Diego is encouraged to provide information to the FBI’s email tip line at tips.fbi.gov or to contact their local FBI Field Office. In Imperial County, the FBI can be reached 24 hours a day at 858-320-1800 or 1-877-NO-BRIBE (662-7423).

DEFENDANTS                                            Case Number 20cr1215                                           

Calexico City Councilman David Romero                 Age: 36                       Residence: Calexico, CA

Calexico City Commissioner Bruno Suarez-Soto      Age: 28                       Residence: Calexico, CA

SUMMARY OF CHARGES

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

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

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

AGENCY

Federal Bureau of Investigation

 

 

 

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

NEWS RELEASE SUMMARY – May 13, 2020

SAN DIEGO – Curtis Technology Inc., a San Diego firm that makes specialized coatings, was sentenced in federal court today to pay a $45,000 fine and $114,297 in clean-up costs for illegally transporting hazardous waste from its facility without a manifest.

Curtis Technology Inc. (CTI) pleaded guilty in February, admitting that it conducted metal finishing operations at its location on Sorrento Valley Road, which generated various wastes, including ferric chloride, alkaline, waste filter cake, solvents and other chemicals.  The company admitted that between December 12, 2015 and August 22, 2019, the CTI owner and a maintenance employee transported chemicals, including waste ferric chloride, waste filter cake, waste alkaline, waste solvents and other chemical wastes, from the CTI location on Sorrento Valley Road to the CTI owner’s three residences located on Wrelton Drive, Corte Morea, and Bourgeois Way, without an accompanying hazardous waste manifest.

On November 8, 2019, a maintenance worker for CTI told the FBI that beginning in 2017, at the direction of the company owner, he transported various chemicals (both unused and waste) to be stored at the owner’s three residences in San Diego.  The employee stated that the chemicals were hazardous, and that some could react with others stored at the same location if they were to come in contact with each other, potentially resulting in explosion.  The employee further stated that he had been to the residences prior to 2017 with the owner and had observed containers of unknown chemicals at the residences prior to his first deliveries at each location.  The chemicals he delivered were stored in five-gallon buckets with lids and jars with lids, and included selenium, cesium, ferric chloride, alkaline and filter cake (solids strained from liquids or sludges).  All three residences where the chemicals were stored were unoccupied, and none of the chemicals were labeled as hazardous waste. None of the chemicals transported to the residences by the employee were accompanied by a hazardous waste manifest.

On November 14, 2019, federal search warrants were executed at the three residences identified by the employee as places where the hazardous waste was being stored.  Collectively, at the three sites, over 300 containers of waste chemicals were discovered.  At one of the locations, chemicals deemed too unstable to transport were discovered.  The area was evacuated, the San Diego Fire Department Bomb Squad arrived, and the chemicals were detonated on site. The remaining chemicals were removed from the sites, and disposed of as hazardous waste through the EPA Superfund program at a cost of approximately $114,000. The illegal activity occurred after the company had been subject to an adverse administrative action relating to its management of its hazardous waste.

“This company was so cavalier and irresponsible about the storage of chemicals that it knowingly put an entire neighborhood at risk,” said U.S. Attorney Robert Brewer. “This sentence holds the company accountable for its illegal actions.”  Brewer also commended the prosecution team headed by AUSA Melanie Pierson for their diligence in this case.

“The illegal transportation and storage of dangerous chemicals and hazardous waste could have easily resulted in a serious injury or death,” said San Diego FBI Acting Special Agent in Charge Omer Meisel.  “Today’s conviction demonstrates the FBI's commitment to working with our law enforcement partners to hold accountable those individuals who do not follow proper hazardous waste protocol and put the community at risk.”

“The defendant illegally stored chemicals in a residential area that were too unstable to safely transport for disposal,” said Acting Special Agent in Charge Scot Adair of EPA’s criminal enforcement program in California. “These actions required the evacuation of a neighborhood to allow local law enforcement officials to detonate the chemicals safely. EPA and our law enforcement partners are committed to addressing these risks and enforcing our environmental laws.”

DEFENDANT                                               Case Number 20cr0715-JAH                                              

Curtis Technology Inc.                                 Incorporated: 1981                              San Diego, CA

SUMMARY OF CHARGES

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

Maximum penalty for corporation: Five years of probation and a fine of the greater of $500,000 or $50,000 per day of violation and a minimum fine of $5000 per day of violation

AGENCY

U.S. Environmental Protection Agency, Criminal Investigation Division

Federal Bureau of Investigation

 

 

 

 

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – May 11, 2020

SAN DIEGO — In honor of National Police Week, U.S. Attorney Robert Brewer recognizes the service and sacrifice of federal, state, local, and tribal law enforcement in San Diego and Imperial counties. The week will be observed Sunday, May 10, through Saturday, May 16, 2020.

“Our police officers put themselves in harm’s way every day to protect all of us,” said U.S. Attorney Robert Brewer. “As both the U.S. Attorney and a crime victim, I am very grateful for their courage and sacrifice. The members of this profession not only face typical daily challenges, which can be harrowing, but now they face the added danger and stress of policing in the face of a global pandemic. This week, I ask all residents to join me in saying ‘thank you’ to our region’s federal, state, local and tribal law enforcement officers for their devotion to our peace and security.”

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

Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty and commitment in keeping our communities safe. This year, the COVID-19 pandemic has underscored law enforcement officers’ courage and unwavering devotion to the communities they swore to serve. As of May 7, 2020, the Fraternal Order of Police reports that 92 law enforcement officers have died from the Coronavirus nationwide.

Based on data collected and analyzed by the FBI’s Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 89 law enforcement officers nationwide were killed in line-of-duty incidents in 2019.

Comprehensive data tables about these incidents and brief narratives describing the fatal attacks are included in the sections of Law Enforcement Officers Killed and Assaulted, 2019, released by the FBI on May 4, 2020.

The names of all fallen officers who have been added in 2020 to the wall at the National Law Enforcement Memorial will be read on Wednesday, May 13, 2020, during a Virtual Annual Candlelight Vigil. Because public events have been suspended as a result of COVID-19, the vigil will be livestreamed to the public at 8:00 p.m. EDT. To view this free online event, please visit: https://www.youtube.com/user/TheNLEOMF.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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

NEWS RELEASE SUMMARY – May 4, 2020

SAN DIEGO – U.S. Attorney Robert Brewer is warning landlords that it is against the law to demand sexual favors from cash-strapped tenants who can’t pay rent due to Covid-19, and he has deployed all available enforcement tools against anyone who tries to use the pandemic to sexually harass people in need of housing.

As the country adopts drastic measures to slow the spread of COVID-19, many Americans have lost their jobs and many more have seen their wages curtailed. These losses have forced many to seek abatements or suspensions of their rent, with reports that nearly one third of Americans were unable to pay their April rent at the beginning of the month.

Many landlords responded to these circumstances with understanding and care, trying to work with their tenants to weather the current crisis. There have been reports, however, of other landlords who have responded to requests to defer rent payments with demands for sexual favors and other acts of unwelcome sexual conduct.

“Taking advantage of tenants in this way is not only despicable - it is illegal,” Brewer said. “Such behavior is not tolerated in normal times, and certainly will not be tolerated now. Criminal conduct, such as the exchange of sexual favors for housing benefits, will result in an indictment.”

We're using all enforcement tools against anyone who tries to exploit this current crisis by sexually harassing people in need of housing. If you are a victim of #SexualHarassment by a landlord or person who has control over housing call: 1-844-380-617We're using all enforcement tools against anyone who tries to exploit this current crisis by sexually harassing people in need of housing. If you are a victim of #SexualHarassment by a landlord or person who has control over housing call: 1-844-380-617

U.S. Attorney Brewer appointed Assistant U.S. Attorney Christopher Tenorio as COVID-19 Civil Rights Coordinator to lead investigations into possible hate crimes and civil rights violations related to the nation's ongoing public health emergency. Tenorio is also Chairperson of the San Diego Regional Hate Crimes Coalition.

The Justice Department’s Sexual Harassment in Housing Initiative is an effort to combat sexual harassment in housing led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the Initiative is to address sexual harassment by landlords, property managers, maintenance workers, loan officers or other people who have control over housing.

Launched in 2017, the Initiative has filed lawsuits across the county alleging a pattern or practice of sexual harassment in housing and recovered millions of dollars in damages for harassment victims. The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years.  Many individuals do not know that being sexually harassed by a housing provider can violate federal law or that the Department of Justice may be able to help.

The Department of Justice, through the Civil Rights Division and the U.S. Attorney’s Offices, enforces the Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of sex discrimination prohibited by the Act.

The Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Civil Rights Division by calling (844) 380-6178 or emailing fairhousing@usdoj.gov.

Individuals may also file a complaint alleging harassment or discrimination in housing with the Department of Housing and Urban Development through HUD’s website or by calling (800) 669-9777.

 

 

NEWS RELEASE SUMMARY – April 30, 2020

SAN DIEGO – San Diego area psychiatrist Prakash Bhatia, M.D., has paid $145,000 to resolve allegations that he overprescribed opioids. Dr. Bhatia previously owned and operated Progressive Health and Wellness in El Cajon, California, practicing pain medicine.

The settlement stems from an investigation that the Drug Enforcement Administration initiated into whether Dr. Bhatia improperly prescribed opioids to his patients at Progressive Health and Wellness (PHW) in violation of the civil provisions of the Controlled Substances Act.

Pursuant to the Controlled Substances Act, health care providers 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 March 2013 to December 2017, Dr. Bhatia wrote opioid prescriptions at PHW, including for hydromorphone, morphine, methadone, oxycodone, fentanyl and oxymorphone without a legitimate medical purpose and/or outside the usual course of his professional practice, in violation of the Controlled Substances Act. The United States alleged that Dr. Bhatia also prescribed these medications in combination with depressant medications (including benzodiazepines and muscle relaxants), which are known to increase the risk of abuse, addiction and overdose.

While the Department of Justice continues to aggressively investigate prescribers who brazenly seek to make money by writing opioid prescriptions to those who have no pain, this investigation exemplifies the Department’s willingness to scrutinize whether doctors treating patients who actually suffer painful conditions are nevertheless overprescribing opioids. 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, for over a decade, been increasingly warning health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages. As such, leading medical organizations, and domestic and international government agencies recommend 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.

“Overprescribing opioids to patients who need treatment for their pain has contributed to the opioid epidemic in this country,” said U.S. Attorney Robert Brewer. “This office is committed to utilizing all available tools to combat this epidemic, including civil prosecution under the Controlled Substances Act. As this settlement demonstrates, my office will continue to investigate health care providers for overprescribing opioids.” Brewer thanked prosecutors Dylan M. Aste and George V. Manahan and DEA agents for working hard to protect the public from opioid abuse.

“The DEA is committed to investigating health care providers to ensure they are dispensing opioid pain medications in compliance with the Controlled Substances Act,” said DEA Special Agent in Charge John W. Callery.  “By holding the medical community accountable for improperly writing opioid prescriptions, the DEA is ensuring that San Diegans are safe from illicit prescribers who enable the abuse of prescription drugs for financial benefit.”

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.”

This matter was handled by Assistant U.S. Attorneys Dylan M. Aste and George V. Manahan of the U.S. Attorney’s Office for the Southern District of California, with the assistance of agents and investigators from the DEA.

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

 

NEWS RELEASE SUMMARY – April 24, 2020

SAN DIEGO – U.S. Attorney Robert Brewer and FBI Acting Special Agent in Charge Omer Meisel today denounced discrimination and acts of hate related to the COVID-10 pandemic that target Asian Americans, Pacific Islanders, Native Americans, and other racial and ethnic minorities and called on residents of San Diego and Imperial counties to take steps to counter xenophobia throughout the state.

U.S. Attorney Brewer today appointed a COVID-19 civil rights coordinator, Assistant U.S. Attorney Christopher Tenorio, to lead investigations into suspected hate crimes and civil rights violations related to the nation's ongoing public health emergency. Tenorio is also chairperson of the San Diego Regional Hate Crimes Coalition.

“During this global pandemic, all families are worried about potential illness and death, financial security and their children’s education, but certain minority populations have the added fear that comes from being possible targets of hate,” said U.S. Attorney Robert Brewer. “We will protect vulnerable communities from racist scapegoating and xenophobia that lead to criminal acts.”

“The FBI is concerned about the potential for hate crimes by individuals and groups targeting minority populations in the United States who they wrongly believe are responsible for the spread of the virus.  Investigating hate crimes against any person, including Asian Americans or individuals from East Asian countries, is one of the FBI's highest priorities, and we continue unabated in our pursuit of offenders during this time” said Acting Special Agent in Charge Meisel. “We will use all authority granted under federal law to hold those who commit hate crimes accountable.”

The Justice Department will prosecute hate crimes and violations of anti-discrimination laws against Asian Americans, Pacific Islanders, Native Americans, and others to the fullest extent of the law. Attorney General William Barr and Assistant Attorney General for Civil Rights Eric Dreiband have called upon department prosecutors throughout the country to watch for hate-motivated acts of violence.

U.S. Attorney Brewer and Special Agent in Charge Meisel urged San Diego and Imperial county residents to take the following steps to protect racial and ethnic minority community members from bias and hate:

• Use language supported by public health officials when referring to the global pandemic and the precipitating virus. World Health Organization (WHO) officials have recommended using “coronavirus disease 2019” or “COVID-19” as appropriate descriptors.

• Disseminate accurate COVID-19 information within professional and socialnetworks. U.S. Government officials have warned the public about widespread misinformation and disinformation related to the COVID-19 pandemic. Avoid spreading inaccurate information by relying on trusted sources for news and public health guidance. Examples include: the Centers for Disease Control and Prevention (CDC.gov), the WHO (WHO.int), and the California Department of Public Health https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Immunization/ncov2019.aspx.

• Encourage people you know to report all incidents of bias and hate. There is a significant disparity between hate crimes that actually occur and those reported to law enforcement. It is critical to report hate crimes not only to show support for the individual(s) directly impacted, but also to send a clear message that the community will not tolerate these kinds of crimes. Reporting also enables law enforcement to fully understand the scope of the problem in a community and assign resources toward preventing and addressing crimes of bias and hate.

If you or someone you know are in immediate danger, please call 911. If you believe you've been the target or victim of a hate crime, sexual harassment or other violation of your civil rights, please contact the FBI San Diego Field Office by calling (858) 320-1800 or submitting a tip online at tips.fbi.gov. The U.S. Attorney's Office COVID-19 civil rights coordinator will be notified of tips submitted via the above reporting methods.

NEWS RELEASE SUMMARY – April 17, 2020

SAN DIEGO – Prosecutors from the four United States Attorney’s Office in California, along with representatives from the FBI, will be participating in a telephonic town hall being coordinated by the AARP to provide information to California residents to help them identify and avoid fraudulent schemes related to Coronavirus and COVID-19.

The telephonic town hall will happen on Monday, April 20 from 10 a.m. until 11 a.m. PDT. During the event, a special agent from the FBI and a federal prosecutor will make presentations, and participants from across California will be allowed to ask questions of a panel of Assistant United States Attorneys from the four offices that serve California.

 

The AARP Fraud Watch Network is providing the infrastructure for the event. Approximately 100,000 AARP members will receive a phone call Monday morning inviting them to participate in the town hall. Those who wish to receive an invitation can sign up on this AARP registration page: https://vekeo.com/aarpcalifornia/#.

During the current health crisis, federal investigators and prosecutors continue to fulfill their critical mission of protecting public safety. Federal officials have prioritized the disruption, investigation and prosecution of crimes related to Coronavirus and COVID-19, including fraudulent schemes, unapproved treatments, and scams related to stimulus money. During the town hall, federal officials will discuss the types of schemes currently being seen, along with tips on how to avoid becoming a victim.

“This innovative outreach event will deliver valuable information designed to protect potentially vulnerable seniors from scams, cyber-attacks and fake cures,” said Robert Brewer, U.S. Attorney for the Southern District of California. “Community members will also learn how to report suspected fraud, which is critically important.  We need to partner with educated consumers to identify and investigate despicable felons seeking to profit from the current health emergency by preying on the public.”

U.S. Attorney Brewer commended Assistant U.S. Attorney Robert Huie, Deputy Chief of the Major Frauds Section, for his participation in the AARP town hall and prosecution of significant COVID-19 scams. 

Soon after the event, the recording will be available at https://vekeo.com/aarpcalifornia/#.

The FBI continues to warn the public about health care fraud schemes:  https://www.fbi.gov/news/pressrel/press-releases/fbi-warns-of-emerging-health-care-fraud-schemes-related-to-covid-19-pandemic and other COVID-19 related crimes at: https://www.fbi.gov/coronavirus.

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

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

 

NEWS RELEASE SUMMARY – April 16, 2020

SAN DIEGO – Dr. Jennings Ryan Staley, a licensed physician and the operator of Skinny Beach Med Spa in San Diego, was charged today with mail fraud in connection with the sale of what he described as a “100%” cure for COVID-19 that he said would render customers immune to the virus for at least six weeks.   Staley is scheduled to be arraigned in federal court tomorrow at 2 p.m. before U.S. Magistrate Judge Jill L. Burkhardt.

FBI Agents began investigating this COVID-19 related fraud immediately upon receiving a tip from the public and shortly thereafter introduced an undercover agent.  Today, FBI Agents also executed a search warrant at the business of Skinny Beach Med Spa located in Carmel Valley.   As alleged in the criminal complaint, Skinny Beach Med Spa, based in Carmel Valley, offered a range of beauty-related services such as botox, hair removal, and fat transfer. In late March, Skinny Beach began sending emails advertising “COVID-19 treatment packs,” described as a “concierge medicine experience” priced at $3,995 for a family of four, that included among other things access to Dr. Staley, the medications hydroxychloroquine and azithromycin, and “anti-anxiety treatments to help you avoid panic if needed and help you sleep.” In a recorded call in which Dr. Staley was selling his services to a would-be customer – in fact, the undercover FBI agent – Dr. Staley described the medication he was offering as “an amazing cure” and a “miracle cure” that would cure COVID-19 “100%.” He added that if you take the medication without having the disease, “you’re immune for at least 6 weeks.” Staley referred to medication he offered as a “magic bullet,” and said, “It’s preventative and curative. It’s hard to believe, it’s almost too good to be true. But it’s a remarkable clinical phenomenon.” Staley also stated, “I’ve never seen anything like this in medicine, just so you know. Really, I can’t think of anything. That, you’ve got a disease that literally disappears in hours.”

Dr. Staley was interviewed a week later by the FBI as part of the overt investigation. When Dr. Staley was asked by agents whether Skinny Beach has told patients that the treatments are a 100% effective cure for COVID-19, Dr. Staley said, “No, that would be foolish. We would never say anything like that.” He also told the FBI that it was “not definitive” that the medication he offered cures COVID-19.

As set out in the complaint, Dr. Staley also offered the would-be customer Xanax (alprazolam) – a Schedule IV controlled substance – as part of his concierge package, and shipped the drug without conducting any sort of medical examination.  He claimed that his broker was smuggling hydroxychloroquine from China to make his own pills, and had concealed the shipment from customs authorities by describing it as sweet potato extract.  Shipping records confirmed that Dr. Staley was indeed importing a shipment of “yam extract,” scheduled to arrive in the U.S. in a matter of days.

“We will not tolerate COVID-19 fraudsters who try to profit and take advantage of the pandemic fear to cheat, steal and harm others,” said U.S. Attorney Brewer. “Rest assured: those who engage in this despicable conduct will find themselves in the crosshairs of federal prosecutors.” 

“The sale of false cures, especially by a medical professional, will be vigorously investigated by the FBI,” said Omer Meisel, the Acting Special Agent in Charge of the FBI’s San Diego Field Office.  “The FBI is using a variety of tools to identify anyone who exploits the current crisis with fraudulent scams or a variety of cyber schemes – and is proactively warning the public about products claiming to save lives, before losing their money or creating false hope.  Scammers seeking to profit by exploiting fear and uncertainty during this COVID-19 pandemic will be brought to justice.”

“The FDA will continue to collaborate with our fellow law enforcement partners to bring to justice those who place profits above the public health during the Covid-19 pandemic,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office.  “Today’s announcement should serve as a reminder that we will take appropriate action against bad actors who take advantage of a crisis while jeopardizing the health of Americans.”

The FBI continues to warn the public about health care fraud schemes:  https://www.fbi.gov/news/pressrel/press-releases/fbi-warns-of-emerging-health-care-fraud-schemes-related-to-covid-19-pandemic and other COVID-19 related crimes at: https://www.fbi.gov/coronavirus.

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

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

DEFENDANTS                                              Case Number 20-mj-1407               

Jennings Ryan Staley                                     Age: 44                                   San Diego, CA

SUMMARY OF CHARGES

Title 18, United States Code, section 1341 (mail fraud)

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

AGENCY

Federal Bureau of Investigation

U.S. Food and Drug Administration

 

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

 

COVID-19 Concierge Medicine Pack (Criminal Complaint, Case No. 20-mj-1407, p. 9)

 

SAN DIEGO – Rogelio Flores Guzman, a Mexican national with legal residency in the U.S., was charged today with trafficking in fentanyl, methamphetamine, heroin, cocaine and marijuana via a subterranean tunnel stretching from Mexico to a warehouse in Otay Mesa.

Flores, who was known to live in Victorville, Las Vegas and Otay Mesa, was taken into custody at Los Angeles International Airport yesterday as he was boarding a plane to Guadalajara, Mexico. He was arraigned this afternoon in federal court before U.S. Magistrate Judge Barbara L. Major via live video because of COVID-19 precautions. The judge ordered that he be detained without bond after the government argued that he was a flight risk.

“Cross-border tunnels always spark fascination, but in reality they are a very dangerous means for major drug dealers to move large quantities of narcotics with impunity until we intervene,” said U.S. Attorney Robert Brewer. “We have seized this tunnel, confiscated almost $30 million in drugs and now we’ve charged one of the alleged crew members. They can dig tunnels, but we will find them, fill them in and put the leaders in prison.”

“This arrest reflects the unyielding commitment of the law enforcement community to curb the flow of illicit narcotics and keep our neighborhoods safe,” said Cardell T. Morant, acting Special Agent in Charge of Homeland Security Investigations (HSI) San Diego. “Despite the challenges we all face as we endure this pandemic, our federal agents and officers who make up the San Diego Tunnel Task Force, working alongside the U.S Attorney’s Office and local law enforcement, continue to investigate and serve justice to those involved with the construction and operation of this tunnel.”

“The DEA and our partners on the San Diego Tunnel Task Force are committed to finding cross-border tunnels, shutting them down, and holding people accountable for building, operating and using these tunnels to bring deadly drugs into our country,” said DEA Special Agent in Charge John W. Callery.  “Today’s charges against one of the alleged crew members demonstrates our determination to do so.  If any member of the public has information about a possible tunnel, I encourage them to contact the San Diego Tunnel Task Force at 1-877-9TUNNEL (1-877-988-6635).”

“We are grateful for the resolve, perseverance, and hard work that our law enforcement partners have demonstrated in making this arrest,” said Chief Patrol Agent Aaron Heitke, “Collaboratively, the task force has shut-down the tunnel, seized over two tons of narcotics, and made this crucial arrest despite the current challenges. Our agents remain vigilant and dedicated to protecting America.”

On March 20, 2020, pursuant to the service a federal search warrant issued by U.S. Magistrate Judge Mitchel D. Dembin, federal agents discovered an exit-point for a subterranean transnational tunnel within a commercial warehouse located at 2587 Otay Center Drive, occupied by Big Brands Warehouse Sales Corporation.

From the entry-point in Mexico, the tunnel continues northbound, crossing the international border, with its exit-point located within the Otay Warehouse. Within this tunnel, agents located approximately 575 packages. Based upon field-tests, these packages tested presumptively positive to contain controlled substances in the following approximate gross amounts:

• 394 packages containing 585 kilograms of cocaine;
• 133 packages containing 1355 kilograms of marijuana;
• 40 packages of containing 39.12 kilograms of methamphetamine;
• Seven packages containing 7.74 kilograms of heroin; and
• One package containing 1.1 kilograms of fentanyl.
  According to a complaint, federal agents conducting surveillance had seen Flores Guzman frequently come and go from the Otay Warehouse over the course of several months.
   
  On March 18, agents conducting surveillance saw Flores Guzman leave the Otay Warehouse as the driver and sole visible occupant of a medium sized box-truck (a truck that had a separate cargo area that was only accessible from the back of the truck). As agents proceeded to follow, the defendant started to drive in a way that made agents believe he was aware that he was being followed. Specifically, at one point, the defendant pulled over, parked in a no parking zone, and briskly walked away from the Box Truck. Agents approached the parked Box Truck and, through a gap in the back door of the truck’s cargo compartment, agents were able to see human fingers, indicating that there were several people located in the Box Truck’s cargo compartment. Within the cargo area, agents located 10 people who later self-identified as Mexican nationals who did not legally enter the United States. The defendant was released pending further investigation.
   
  On April 9, agents contacted the defendant at the Los Angeles International Airport as he waited to board a flight to Guadalajara, Mexico. The complaint said that during this contact, agents verbally advised the defendant of his Miranda rights, and he admitted participating in the tunnel construction, controlling access to the tunnel and personally transporting drugs through the tunnel.
   
  He was charged with Conspiracy to Distribute Controlled Substances.
   

The discovery of the tunnel resulted from an ongoing investigation by members on the San Diego Tunnel Task Force, which include Homeland Security Investigations, U.S. Border Patrol, the Drug Enforcement Administration and the United States Attorney’s Office.  

The large seizure of mixed drugs represents the first time in San Diego’s history where five different types of drugs were found inside a tunnel. The total street value of the drugs seized from the tunnel is estimated at $29.6 million.

The tunnel extends for more than 2,000 feet underground from a warehouse in Tijuana, Mexico to a warehouse in the Otay Mesa area of San Diego. The tunnel has an average depth of 31 feet and is three-feet wide through most of the passageway.

Agents estimate the tunnel has been in existence for several months due to the advanced construction observed in several portions of the passageway, which included reinforced walls, ventilation, lighting and an underground rail system.

Flores Guzman’s next court appearances are scheduled for April 23 and May 7 at 9:30 a.m. before Judge Major.

DEFENDANT                                                Case Number 20MJ1367                                         

Rogelio Flores Guzman                                  Age: 54           Victorville, Las Vegas, Chula Vista, CA

SUMMARY OF CHARGES

Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Secs. 841 (a)(1) and 846

Maximum Penalty: Life in prison, 10-year mandatory minimum; $10 million fine

AGENCY

Homeland Security Investigations

U.S. Drug Enforcement Administration

U.S. Border Patrol

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

 

SAN DIEGO – The Department of Justice today announced that it is making $850 million available to help public safety agencies respond to the challenges posed by the outbreak of COVID-19. The Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump, will allow eligible state, local and tribal governments to apply immediately for these critical funds. The department is moving quickly to make awards, with the goal of having funds available for drawdown within days of the award.

“Our first responders and law enforcement officials are putting themselves in harm’s way to an even greater extent than usual in order to protect our communities from this invisible enemy,” said U.S. Attorney Robert Brewer. “We hope these funds will help keep them safe as they keep us safe.”

“This is an unprecedented moment in our nation’s history and an especially dangerous one for our front-line law enforcement officers, corrections officials, and public safety professionals,” said Office of Justice Programs Principal Deputy Assistant Attorney General Katharine T. Sullivan. “We are grateful to the Congress for making these resources available and for the show of support this program represents.”

The solicitation, posted by the Bureau of Justice Assistance in the Justice Department’s Office of Justice Programs (OJP), will remain open for at least 60 days and be extended as necessary. OJP will fund successful applicants as a top priority on a rolling basis as applications are received. Funds may be used to hire personnel, pay overtime costs, cover protective equipment and supplies, address correctional inmates’ medical needs and defray expenses related to the distribution of resources to hard-hit areas, among other activities. Grant funds may be applied retroactively to Jan. 20, 2020, subject to federal supplanting rules.

Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for this emergency funding. Jurisdictions in the Southern District of California are eligible for about $2.5 million in grants.

 

City of Carlsbad

$47,395

City of Chula Vista

$166,711

City of El Cajon

$89,355

City of El Centro

$41,808

City of Escondido

$125,276

Imperial County

$39,018

City of La Mesa

$41,734

City of Lemon Grove

$35,545

City of Oceanside

$153,578

City of San Diego

$1,217,682

City of San Marcos

$42,488

Brawley

$33,734

National City

$67,168

San Diego County

$307,082

Vista

$81,883

TOTAL

$2,490,457

 

A complete list of eligible jurisdictions and their allocations can be found at https://bja.ojp.gov/program/fy20-cesf-allocations.

For more information about the Coronavirus Emergency Supplemental Funding program, please visit https://bja.ojp.gov/funding/opportunities/bja-2020-18553. For more information about the Office of Justice Programs, please visit https://www.ojp.gov/.

 

NEWS RELEASE SUMMARY – March 24, 2020

San Diego – A Russian-based cyber platform known as DEER.IO was shut down by the FBI today, and its suspected administrator – alleged Russian hacker Kirill Victorovich Firsov - was arrested and charged with crimes related to the hacking of U.S. companies for customers’ personal information.

DEER.IO was a Russian-based cyber platform that allowed criminals to purchase access to cyber storefronts on the platform and sell their criminal products or services.  DEER.IO started operations as of at least October 2013, and claimed to have over 24,000 active shops with sales exceeding $17 million. The platform was shut down pursuant to a seizure order issued by the Southern District of California Court.

FBI agents arrested Firsov, a Russian cyber hacker, on March 7 in New York City. Firsov not only managed the DEER.IO platform, he also advertised it on other cyber forums, which catered to hackers. Firsov is next scheduled to appear on April 16, 2020, before U.S. Magistrate Judge Allison H. Goddard.

According to a federal complaint, DEER.IO virtual stores offered for sale a variety of hacked and/or compromised U.S. and international financial and corporate data, Personally Identifiable Information (PII), and compromised user accounts from many U.S. companies. Individuals could also buy computer files, financial information, PII, and usernames and passwords taken from computers infected with malicious software (malware) located both in the U.S. and abroad. Law enforcement found no legitimate business advertising its services and/or products through a DEER.IO storefront. Store operators and customers accessed the storefront via the Internet.  Specifically, in this case, the FBI made purchases from DEER.IO storefronts hosted on Russian servers.

The DEER.IO platform offered a turnkey online storefront design and hosting platform, from which cybercriminals could advertise and sell their products (such as harvested credentials and hacked servers) and services (such as assistance performing a panoply of cyber hacking activities). The DEER.IO online stores were maintained on Russian-controlled infrastructure. The DEER.IO platform provided shop owners with an easy-to-use interface that allowed for the automated purchase and delivery of criminal goods and services.

Once shop access was purchased via the DEER.IO platform, the site then guided the newly-minted shop owner through an automated set-up to upload the products and services offered through the shop and configure crypto-currency wallets to collect payments for the purchased products and/or services.

As of 2019, 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 payment methods such as WebMoney, a Russian based money transfer system similar to PayPal.

A cybercriminal who wanted to purchase from storefronts on the DEER.IO platform could use a web browser to navigate to the DEER.IO domain, which resolved to DEER.IO storefronts. DEER.IO contained a search function, so individuals could search for hacked accounts from specific companies or PII from specific countries, or the user could navigate through the platform, scanning stores advertising a wide array of hacked accounts or cyber criminal services for sale. Purchases were also conducted using cryptocurrency, such as Bitcoin, or through the Russian-based money transfer systems.

On or about March 4, 2020, the FBI purchased approximately 1,100 gamer accounts from the DEER.IO store ACCOUNTS-MARKET.DEER.IS for under $20 in Bitcoin. Once payment was complete, the FBI obtained the gamer accounts, including the user name and password for each account. Out of the 1,100 gamer accounts, 249 accounts were hacked Company A accounts. Company A confirmed that if a hacker gained access to the user name and password of a user account, that hacker could use that account. A gamer account provides access to the user’s entire media library. The accounts often have linked payment methods, so the hacker could use the linked payment method to make additional purchases on the account. Some users also have subscription-based services attached to their gamer accounts.

On or about March 5, 2020, the FBI purchased approximately 999 individual PII accounts from the DEER.IO store SHIKISHOP.DEER.IS for approximately $170 in Bitcoin.  On that same date, the FBI purchased approximately 2,650 individual PII accounts from the DEER.IO store SHIKISHOP.DEER.IS for approximately $522 in Bitcoin. From those identities, the FBI identified names, dates of birth and U.S. Social Security numbers for multiple individuals who reside in San Diego County, including G.V. and L.Y.

“There is a robust underground market for hacked stolen information, and this was a novel way to try to market it to criminals hoping not to get caught,” said U.S. Attorney Robert Brewer. “Hackers are a threat to our economy, and our privacy and national security, and cannot be tolerated.”

FBI Special Agent in Charge Omer Meisel stated, “Deer.io was the largest centralized platform, which promoted and facilitated the sale of compromised social media and financial accounts, personally identifiable information (PII) and hacked computers on the internet. The seizure of this criminal website represents a significant step in reducing stolen data used to victimize individuals and businesses in the United States and abroad.  The FBI will continue to be at the forefront of protecting Americans from foreign and domestic cyber criminals.”

The office extends its appreciation to the New York Division of U.S. Customs and Border Protection operating at John F. Kennedy International Airport and to private sector cyber-security company Black Echo LLC, which provided assistance throughout the investigation.

Report cyber crimes by filing a complaint with the FBI's Internet Crime Complaint Center, by calling your local FBI office or 1800 CALL FBI.

DEFENDANT                                    Case Number: 20MJ1029

Kirill Victorovich Firsov                    Age: 28

SUMMARY OF CHARGE

Unauthorized Solicitation of Access Devices, 18 USC Sec. 1029(a)(6)(A)

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

AGENCIES

Federal Bureau of Investigation

 

NEWS RELEASE SUMMARY – March 19, 2020

SAN DIEGO – The U.S. Attorney’s Office will remain vigilant in detecting, investigating and prosecuting  fraud schemes related to the COVID-19 crisis.

There have been reports of individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud; reports of phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention; and reports of malware being inserted onto mobile apps designed to track the spread of the virus.

“The pandemic is dangerous enough without greedy lawbreakers seeking to profit from public panic,” said U.S. Attorney Robert Brewer. “This office will make the investigation and prosecution of all criminal conduct related to the current pandemic a top priority.  It is important that criminals know that this national crisis offers no safe harbor for them.  We will work together to ensure that those who violate federal law will be brought to justice.”

The U.S. Attorney’s Office will work closely with the Department of Justice as well state and local authorities to both ensure that we hear about misconduct as quickly as possible and that all appropriate enforcement tools are available to punish it.

 

Assistant U.S. Attorneys Emily W. Allen (619) 546-9738; Mark Conover (619) 546-6763 and Phillip L.B. Halpern (619) 546-6964

NEWS RELEASE SUMMARY – March 17, 2020

SAN DIEGO – Former U.S. Representative Duncan D. Hunter was sentenced today to 11 months in prison for his admitted role in a years-long conspiracy to knowingly and willfully steal $250,000 in campaign funds that he and his wife used to maintain their lifestyle when their family was otherwise drowning in debt.

U.S. District Judge Thomas J. Whelan handed down the sentence and ordered Hunter to surrender to the Bureau of Prisons by May 29 at noon. The judge refused the defendant’s request to impose a sentence where Hunter would have served part or all of his sentence in home confinement, explaining that “the number of years and the amount of transactions” made such sentence inappropriate because this wasn’t a single act of theft but a crime committed repeatedly over almost a decade.

“Congressman Hunter violated the trust of his supporters by using hundreds of thousands of dollars they donated in good faith to his reelection campaign for personal expenditures,” said David Leshner, Attorney for the United States. Leshner praised prosecutors Phil Halpern, Emily Allen and Mark Conover as well as the Federal Bureau of Investigation for their tireless pursuit of justice in this case: “These prosecutors conducted the investigation with the utmost professionalism, and they exemplify the Department of Justice’s commitment to upholding the rule of law.  This case would not have been possible without their hard work, talent, and dedication to the pursuit of justice.”

Assistant U.S. Attorney Phil Halpern, in arguing for a strong sentence, told the court: “Rather than admit his guilt and resign his seat when the charges came to light, or even when he was originally charged, Hunter chose to mislead the more than 700,000 people who live in the 50th congressional district.” “As we now know, Hunter lied to the people about his guilt. Not once, but countless times. As a result of his duplicity, the voters were robbed of their right to representation in Congress – representation they are denied to this day. A price must be exacted when an elected representative seeks to cover up corruption by hiding behind lies.”

The government had sought a sentence of 14 months, but prosecutors said they were pleased with the outcome of the case. “We have the utmost respect for Judge Whelan, who is probably the most experienced judge on the federal bench,” Halpern said. “If Judge Whelan believed this to be the appropriate sentence, then it certainly was.”

As court filings show, both Hunter and his wife, Margaret, who also pleaded guilty and is scheduled to be sentenced on April 7, used hundreds of thousands of dollars in campaign funds as their personal piggy bank from 2010 through 2016. During that time, the Hunters stole money from the campaign for items as inconsequential as fast food, movie tickets and sneakers; as trivial as video games, Lego sets and Playdoh; as mundane as groceries, dog food, and utilities; and as self-indulgent as luxury hotels, overseas vacations and plane tickets for their family pet rabbits, Eggburt and Cadbury.  Hunter gave his wife access to campaign funds so that she could subsidize their personal lifestyle, and repeatedly ignored his senior staff when they tried to rein in the rampant personal spending. When questions arose and the case went public, he falsely blamed his wife and family rather than taking responsibility for the crime.

 “Public corruption erodes public confidence and undermines the strength of our democracy,” said Omer Meisel, Acting Special Agent in Charge of the San Diego Division of the FBI.  “The FBI is committed to investigate public officials who abuse the public trust and use their office to commit illegal acts.”

As detailed in the sentencing papers filed in court, beginning in 2010 and continuing up to late 2016, Duncan and Margaret Hunter agreed to use campaign funds for their own personal benefit and enjoyment—and to spend freely from Hunter’s campaign donors’ funds. Many of the Hunters’ personal outings with family or friends (which included trips to the Del Mar racetrack, dinners or drinks with friends, family and “couples” vacations, golf outings, and a weekend-long bachelor party) should not have been paid for with campaign funds. Among their improper spending, the Hunters paid $2,448.27 in campaign funds in August 2011 for a “couples” vacation in Las Vegas, Nevada, which Hunter concealed by falsely reporting to the campaign treasurer that the expenses were all  “campaign related.”  His friend, however, described the weekend as a “pure vacation” where the foursome enjoyed Las Vegas restaurants, lounging by the pool, sightseeing, and taking in a show.  In order to conceal his illegal spending that weekend, Hunter went so far as to schedule a 20 minute tour of a charter school. Similarly, later that same month, knowing that their family bank account had a negative balance, the Hunters improperly used $113.73 in campaign funds to pay their half of the bill during another couples’ “date night” out with good friends at Jake’s Del Mar; improperly used $156.22 in campaign funds during a “couples” day at the Del Mar Racetrack; and improperly used $511.03 in campaign funds at the Hotel del Coronado to celebrate their child’s birthday. Hunter once again falsely told the campaign treasurer that all these charges were “campaign related.”

Previously, Hunter’s wife, Margaret, publicly acknowledged that these types of improper expenses went on for years and included spending as flagrant as: (1) $100.69 on November 16, 2013 at Casa De Pico in La Mesa to take their family and close friends out to dinner in relation to their son’s little league football game; (2) $1,489 on June 28, 2014 to treat their good friends to dinner at the Studio restaurant in the Montage Laguna Beach resort, and for room service, drinks, and meals the next day for the Hunters by themselves; (3) a family trip to Disneyland on September 26, 2015, which included $229.44 at Disneyland’s Star Trader shop for Minnie Mouse ear headbands and Star Wars-themed clothes for the Hunters’ children; and  (4) $669.07 on March 27, 2016 at the Hotel del Coronado for a family Easter Sunday brunch in the Crown Room that the Hunters recognized was well outside their budget. 

In her plea agreement, Margaret Hunter specifically acknowledged that she and Duncan Hunter used campaign funds to secretly make thousands of dollars in improper personal purchases (including family vacations, household goods and groceries, restaurants and bar tabs, a bachelor party, gas, fast food, retail shopping, cash withdrawals, a garage door, and personal Uber rides, among others) which they continued to disguise as campaign-related expenses.

Hunter enabled the theft by repeatedly providing his wife with a campaign credit card despite the advice from his treasurer that he not do so.  Similarly, Hunter – against the advice of his campaign staff and congressional office staff – installed Margaret as his paid campaign manager on two separate occasions with full knowledge that she was misappropriating campaign funds in order to finance their personal lifestyle.  When discussing her appointment as the salaried campaign manager for the second time in 2014, Margaret observed that Hunter “need[ed] the extra money as much as I do[.]”

According to court documents, the Hunters used campaign funds improperly on various family vacations, including:

• A July 2014 vacation to Washington, D.C. and a resort in Pennsylvania (which included personal items and activities such as purchasing cigarettes, $399 for zip lining for Hunter and two of his children, and $250 in airline travel charges for Eggburt);
   
• A February 2015 family trip to Minnesota, during which they improperly paid for personal family expenses including $250 in airline travel charges for Eggburt, and $132 in Uber rides to take the Hunter family to the Mall of America;
   
• A June/July 2015 family vacation to Hunter’s cousin’s wedding in Boise, Idaho, and a stopover in Las Vegas, in which the Hunters, among other things, spent $205.62 in campaign funds for personal items (including a pair of designer sunglasses for Hunter) at the North Face store;
   
• A November 2015 family vacation to Italy, in which the Hunters improperly used more than $14,000 in campaign funds, which Hunter justified by attempting to set up a one-day tour of a U.S. Navy facility in Italy (which never occurred);
   
• Similarly, Hunter used more than $1,000 in campaign funds to take one of his girlfriends on a 2010 winter ski trip to the Hyatt Regency Lake Tahoe Resort, Spa and Casino. 

Hunter turned to campaign funds because his family’s finances were in constant disarray.  During the course of the conspiracy, the Hunters overdrew their bank account more than 1,100 times in a seven-year period resulting in $37,761 in “overdraft” and “insufficient funds” bank fees.  Their credit cards were frequently charged to the credit limit, often with five-figure balances, resulting in an additional $24,600 in finance charges, interest, and other fees related to late, over the limit, and returned payment fees.  

Sentencing documents show that Hunter and his wife both recognized that campaign funds were being spent on personal activities. For example, after returning home from their Boise and Las Vegas vacation, Duncan and Margaret Hunter discussed how the campaign card had been declined as the family had “racked up a $600 minibar…and more charges at Caesars…” as well as a $200 family breakfast, the “kids room service” and pool drinks, and gift shop purchases.  And, despite falsely telling the campaign treasurer that the various charges related to their 2015 Italy vacation “were mostly military/defense meet related,” Margaret Hunter emailed a friend that “Italy was amazing.  Truly our best family trip so far.  Like that saying ‘if traveling was free you’d never see me again’!”   For his part, Hunter “doubled down” on this lie by having his Chief of Staff deny to the press that that the trip was a family vacation.

DEFENDANTS                                            Case Number 18cr3677-W                          

Duncan D. Hunter                                           Age: 43                       Alpine, CA

Margaret E. Hunter                                         Age: 44                       La Mesa, CA

SUMMARY OF CHARGE

Conspiracy to Steal Campaign Funds – Title 18, U.S.C., Sec. 371

AGENCY

Federal Bureau of Investigation

 

 

 

 

 

For Further Information, Contact: Assistant U. S. Attorney Larry Casper (619) 546-6734

EL CENTRO – The region’s highest-ranking law enforcement officials joined together today to issue a dire public safety alert about the extreme danger of fentanyl-laced pills following the fatal overdose of a 15-year-old boy, the youngest person known to have died as a result of fentanyl in Imperial County.

U.S. Attorney Robert Brewer announced that a complaint was unsealed Wednesday charging 20-year-old Lorenzo Anthony Garcia of Brawley in the overdose death of a young football player from Central Union High School. Garcia was arraigned in federal court in El Centro Wednesday before U.S. Magistrate Judge Ruth Bermudez-Montenegro.

According to the complaint, on the morning of October 8, 2019, the victim’s grandfather tried to wake him up for school, but the child was lifeless and unresponsive. Garcia was allegedly dealing counterfeit blue M30 oxycodone pills laced with fentanyl – known on the street as “blues.” He was also selling Xanax, methamphetamine and other illicit narcotics. Some of his customers were high school students.  The complaint alleges that Garcia continued to distribute the counterfeit pills even though he knew about the overdose death.

Fentanyl is 30 to 50 times more powerful than heroin and so dangerous that, in its purest form, even a tiny amount can be deadly. The price of fentanyl – whether as powder or pill – is declining, meaning that both forms are increasingly available in our community.

“There is no margin for error when kids make a mistake with fentanyl, and the consequences can be deadly,” said U.S. Attorney Robert Brewer. “Parents! Get educated and teach your children the deadly consequences of taking pills that are not prescribed to them. The pills might be laced with fentanyl, and fentanyl can kill them!”

“The most effective way to prevent tragic deaths like this one is by talking to your kids about drugs,” said DEA Special Agent in Charge John W. Callery.  “Tell your kids about the consequences of using drugs and use this story as an example. Because not only did a 15-year-old boy lose his life to drugs, a 20-year-old young man will possibly lose the next 20 years of his life in jail.”

“This case is a tragic reminder of the fentanyl crisis in the United States,” said El Centro Police Chief Brian Johnson. “The senseless death of a child is a sobering reminder that parents, teachers, and all public safety professionals need to work together to educate our youth and help encourage them to make good decisions about drugs and other dangerous behavior.  We hope this tragedy will be a reminder to our youth to not experiment with drugs, alcohol, and tobacco products, all which are harmful to the developing young body and brain. If you know someone is using drugs, be a buddy and have the courage to get them help so we can prevent another tragedy.  Working together we can all make a difference.”

“I would like to personally thank U.S. Attorney Robert Brewer for the action his office has taken regarding the senseless death of this young man,” said Imperial County District Attorney Gilbert Otero.  “Under his leadership, our Federal counterparts have actively assisted local law enforcement in holding violators accountable for their actions.  In the end, those who benefit the most are the victims and the public as a whole.  My staff and I look forwarding to continue the relationship both offices have established.”

In San Diego County, officials expect the final tally for fentanyl overdose deaths in 2019 to reach 150. That’s up more than 600 percent from five years ago, and more than 60 percent from 2018. And the rapid increase continues in 2020.

So far, Imperial County has not experienced the high number of fentanyl overdose deaths seen in other regions, but the numbers are on the rise.

“We don’t want the Imperial Valley to mirror the San Diego trend,” U.S. Attorney Brewer said. “Just five years ago, San Diego had 21 fentanyl-related overdose deaths. Just when we think it can’t get any worse, the latest numbers prove us wrong. We are already on pace in 2020 to greatly exceed 2019. I am alarmed and devastated by the dramatic surge in trafficking activity and deaths, particularly of young people.”

The Southern District of California, which includes San Diego and Imperial counties, is the fentanyl gateway to the rest of the country. Fentanyl is crossing the border in this district in record quantities. Mexican drug trafficking organizations are using San Diego ports to smuggle fentanyl in record numbers.

Just five years ago, there were only six fentanyl seizures, collectively 68 pounds, by border officials in the Southern District of California.  In 2019, however, there were 214 seizures, totaling 1,792 pounds. That’s an increase of more than two thousand five-hundred percent.

Law enforcement officials are working hard to close this gateway with interdiction, prosecution and education.  “Every time we have a fatal overdose, we will be pursue the dealer,” Brewer said. “We are using every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.”

Under federal law, sellers and suppliers of drugs that cause death or serious bodily injury may face a 20-year mandatory minimum sentence.  In recent years, the U.S. Attorney’s Office has charged 18 alleged dealers with that 20-year mandatory minimum offense – including today’s case.

United States Attorney Brewer urged users who opt to disregard his dire warning to seek Narcan, a drug that can reverse the effects of opioid overdose and save lives. Narcan is available by prescription and can be purchased at many pharmacies without a prescription.

People who need help with mental health including substance use disorder, suicide prevention, medication needs, and more can call the San Diego County Crisis line at 888-724-7240. It’s open seven days a week, 24 hours a day.

 

DEFENDANT                                               Case Number 20mj8654      

Lorenzo Anthony Garcia                                Age: 20                                   Brawley, CA                          

SUMMARY OF CHARGES

Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Sections 841(a)(1) and 841(b)(1)(C)

Maximum penalty: Mandatory Minimum 20 years in prison and maximum of life and $1,000,000 fine

 

AGENCIES

Drug Enforcement Administration

El Centro Police Department

 

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

NEWS RELEASE SUMMARY – March 11, 2020

SAN DIEGO – Today, a federal jury found Juan Marquis Holiday, a San Diego resident, guilty of robbing and attempting to rob ten local businesses by displaying a firearm during the robberies and, on five occasions, discharging a firearm. The jury returned their verdict after hearing the testimony of 37 witnesses, including the individuals who were in those businesses at the time of the robberies and attempted robberies.

 “When someone uses a firearm and repeatedly terrorizes community members, bringing that person to justice is a top priority,” said U.S. Attorney Robert Brewer. “We are gratified to have secured a conviction that not only holds the defendant accountable for his violent crimes, but brings a measure of greater security to our communities.  I’d like to thank Assistant U.S. Attorneys Shital Thakkar and Matthew Brehm and our law enforcement partners for their outstanding work on this case.”

During trial before District Judge Anthony J. Battaglia, dozens of witnesses explained to the jury various aspects of the defendant’s crime spree.  Those witnesses included: victims from the local businesses, first responders, evidence technicians, DNA and ballistics experts from the San Diego Police Department and the San Diego Sherriff’s Department, and other federal agents. More than twelve victims described being threatened with a firearm during the robberies, which occurred in January and April of 2017. Some of those victims also described how the defendant fired shots past their heads, and physically assaulted them, including with the use of his pistol.

Holiday’s co-defendant, Don Wayne Jones III, pled guilty in 2018 and was sentenced to 30 years and 1 day in custody.

“The FBI has federal jurisdiction under the Hobbs Act to investigate violent criminal acts affecting interstate commerce,” said Omer Meisel, Acting Special Agent-in-Charge for the San Diego Division of the FBI.  “In this case, our Agents worked closely with our local partners at the San Diego Police Department and San Diego Sheriff’s Department to bring justice for the victims of this violent crime and bring safety to our community.”

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 S. Brewer, Jr., 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, labor trafficking and alien smuggling. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.

DEFENDANT                                                Case Number 17cr1370-AJB                                              

Juan Marquis Holiday                                    Age: 27                                   San Diego, CA

SUMMARY OF CHARGES

Interference with Commerce by Threats or Violence – Title 18, U.S.C., Section 1951(a)

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

Attempted Interference with Commerce by Threats or Violence – Title 18, U.S.C., Section 1951(a)

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

Brandishing a Firearm During and in Relation to a Crime of Violence –

Title 18, U.S.C., Section 924(c)

Maximum penalty: life imprisonment; a mandatory minimum seven years in prison; and $250,000 fine

Discharging a Firearm During and in Relation to a Crime of Violence –

Title 18, U.S.C., Section 924(c)

Maximum penalty: life imprisonment; a mandatory minimum ten years in prison; and $250,000 fine

AGENCIES

Federal Bureau of Investigation

San Diego Police Department

San Diego Sherriff’s Department

La Mesa Police Department

 

VICTIM BUSINESSES

Robbery No.

Date

Victim

Address

1

1/5/2017

Arco Gas Station

3724 Del Sol Blvd, San Diego, CA

2

1/11/2017

Parry Liquor

4707 Federal Blvd., San Diego, CA

3

1/11/2017

Par Liquor

5055 Federal Blvd., San Diego, CA

4

1/11/2017

Greene Cat Liquor

5102 Imperial Avenue, San Diego, CA

5

4/6/2017

Market at the Ranch

10299 Scripps Trail, San Diego, CA

6

4/19/2017

7-Eleven

9365 Jamacha Blvd., Spring Valley, CA

7

4/20/2017

Eastridge Liquor

7705 University Ave. La Mesa, CA

8

4/20/2017

Apollo Market

2327 Reo Drive, San Diego, CA

9

4/20/2017

G&M Market

8903 Jamacha Rd., Spring Valley, CA

10

4/22/2017

Victoria’s Mexican Grill

1912 Coronado Ave., San Diego, CA

*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 Robert S. Huie (619) 546-7053

NEWS RELEASE SUMMARY – March 5, 2020

SAN DIEGO ­– Matthew John Anderson, a former San Diego Zoo biologist, pleaded guilty in federal court today, admitting he stole hundreds of thousands of dollars from the world-renowned institution.

Anderson worked for the zoo for over 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. 

In his plea agreement, Anderson admitted that over the course of approximately eight years – from December 2008 to October 2016 – he worked to create false invoices in the names of various purported vendors which were presented to the zoo for payment. The zoo paid the invoices, in some cases sending money to accounts controlled by Anderson, and in others sending payments to third parties who kicked back the bulk of the payments to Anderson. Anderson admitted to creating 35 bogus invoices and stealing over $236,000 in total.

U.S. Attorney Robert Brewer praised the work of FBI agents and prosecutor Robert Huie. “We will hold accountable those who seek to steal and defraud, including all those who selfishly steal from our cherished San Diego institutions.”

“When an employee is elevated to a position of leadership, it is a sign of that company’s trust in the integrity and honesty of that person,” said FBI Special Agent in Charge Scott Brunner. “When an employee violates that trust and abuses their position to defraud and steal money for personal benefit, the FBI stands ready to hold them accountable.”

Sentencing is scheduled for June 8, 2020 at 9 a.m. before U.S. District Judge Larry Burns.   

DEFENDANT                                               Case No. 20-CR-0812-LAB 

Matthew John Anderson                                 Ramona, California                 Age: 49

SUMMARY OF CHARGES*

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

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

AGENCIES

Federal Bureau of Investigation

 

Assistant U. S. Attorney David P. Finn (619) 546-7342

NEWS RELEASE SUMMARY – March 4, 2020

SAN DIEGO – Michael Steen pleaded guilty in federal court today, admitting that he supplied fentanyl that led to the fatal overdose of a 33-year-old Ramona woman on July 9, 2018.

According to his plea agreement, Steen sold more than 500 grams of what he knew to be fentanyl in 2018. He pleaded guilty before U.S. Magistrate Judge F. A. Gossett III to Conspiracy to Distribute Fentanyl and is scheduled to be sentenced on May 29, 2020 by U.S. District Judge Gonzalo P. Curiel.

“This case should put dealers on notice that every time we have an overdose death, we are going to come looking for you, because many lives are at stake,” said U.S. Attorney Robert Brewer. “We are using every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.”

“This case is an example of the DEA, the Sheriff’s Department and the U.S. Attorney’s office working together with one definitive goal: To put people responsible for drug deaths in jail,” said DEA Special Agent in Charge John W. Callery.  “We will continue to aggressively pursue those who deal drugs and cause death in our community.”

“Sheriff's Deputies are on the front lines of combating the proliferation of illicit fentanyl,” said Sheriff’s said Captain Justin White. “There are many stories of lives stolen. In this case, the victim is a young woman from Ramona who was just starting off in life.  The Sheriff's Department is dedicated to working with our federal, state and local partners in holding those accountable for the distribution, supply or manufacturing of this potent painkiller.”

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

U.S. Attorney Brewer praised prosecutor David Finn as well as the San Diego Sheriff’s Office and DEA agents for their hard work on the case.

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

DEFENDANT                                               Case Number 19-CR-0869-GPC                                        

Michael Steen                                                    Age: 26          

SUMMARY OF CHARGES

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

Maximum penalty: Mandatory minimum 10 years in prison up to life

AGENCY

San Diego Sheriff’s Office

U.S. Drug Enforcement Administration, Narcotics Task Force

For Further Information, Contact:

Assistant U.S. Attorneys Kevin Mokhtari (619) 546-8402 and David J. Rawls (619) 546-7966

 

SAN DIEGO – Federal prosecutors unsealed an indictment in San Diego today charging the owner of a large residential compound in Vista with maintaining a drug-involved premises. The indictment seeks criminal forfeiture of the multi-acre property, which is located at 725 Poinsettia Avenue. 

Early this morning, members of the North County Regional Gang Task Force, the FBI SWAT team and  other law enforcement agencies raided the property and arrested the owner, defendant Sean Terrence Sheeter, who is charged in the indictment. Sheeter was released and ordered to appear in federal court in San Diego on Friday at 2:00 pm before U.S. Magistrate Judge Linda Lopez.

The federal indictment is the result of a multi-year investigation led by the North County Regional Gang Task Force, which is spearheaded by the FBI and the San Diego Sheriff’s Department. The investigation involved months of federal wiretaps, multiple undercover drug buys, and surveillance that led investigators to learn about the criminal activity on the property.

More Photos

This investigation initially focused on North County gang members and associates who were believed to be importing methamphetamine and heroin from Mexico and distributing the drugs in the North County area.  As the investigation continued, authorities learned that many of the targets were living at and operating from the Poinsettia Avenue property. According to a search warrant unsealed today, Sheeter, who also lives at the property, allowed gang members, drug dealers and users to stay at the property. 

According to the search warrant unsealed today, law enforcement activity at the property has been pervasive.  Between January 1, 2017 and February 25, 2020, there have been 53 separate calls for service or other calls to the San Diego Sheriff’s Department pertaining to the property.  The calls included reports for stolen vehicles, thefts, disturbance calls, burglary, grand theft, armed suspicious persons, vandalism and a threat with a weapon. During the same time period, there have been approximately 22 arrests and 7 citations issued at the property.  The majority of the arrests relate to possession of controlled substances or stolen vehicles, but include several arrests related to firearms in the possession of felons or other prohibited persons. 

“We allege that this property is a drug-laden haven for violent felons, gang members, drug dealers and drug users,” said U.S. Attorney Robert Brewer. “This neighborhood, and the streets of San Diego County, are safer today because of the hard work and dedication of the North County Regional Gang Task Force and prosecutors Kevin Mokhtari and David Rawls, who are responsible for these indictments.”

“Today’s operation brings the conclusion of a long-term investigation led by our North County Regional Gang Task Force.  This group of dedicated agents and officers work hard making the streets of North County safer for the community to live and work,” said FBI Special Agent in Charge Scott Brunner. “The dangerous activity involving heroin, methamphetamine, firearms, and other illegal activity at the so called 'Heroin House' has been shut down.”

“It's not unreasonable to expect our neighbors to be law abiding citizens,” said Sheriff’s Captain Justin White. “Unfortunately, Mr. Sheeter allegedly felt he was above the law with little regard for his neighbors and how illegal activity would affect everyone’s quality of life.  The San Diego County Sheriff's Department is grateful for the hard work and cooperation of the North County Regional Gang Task Force and the U.S. Attorney’s Office to bring about positive change in this Vista neighborhood.”

For further information on the original investigation that led to today’s action, please see https://www.justice.gov/usao-sdca/pr/thirty-seven-gang-members-charged-crackdown-north-county-heroin-methamphetamine-and.

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

This case was handled by Assistant U.S. Attorneys Kevin Mokhtari and David J. Rawls.

Indictment - Sheeter  
Warrant

DEFENDANT                                   Case Number 20CR0656-JLS    

Sean Terrence Sheeter                               Vista, California.

SUMMARY OF CHARGES

Maintaining a Drug-Involved Premises – Title 21, U.S.C., Section 856(a)(2)
Criminal Forfeiture – Title 21, U.S.C., Section 853

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

AGENCIES

Federal Bureau of Investigation

San Diego Sheriff’s Department

United States Marshals Service

Bureau of Alcohol, Tobacco, Firearms and Explosives

Homeland Security Investigations

Drug Enforcement Administration

Carlsbad Police Department

Oceanside Police Department

Escondido Police Department

California Department of Corrections and Rehabilitation

California Highway Patrol

Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)

Department of Justice, Office of Enforcement Operations

 

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

NEWS RELEASE SUMMARY – February 27, 2020

SAN DIEGO – Jose Gaytan and Sonia Murillo, defendants affiliated with Imperial Valley Ministries, pleaded guilty to labor trafficking charges in federal court today, admitting that they participated in a forced labor conspiracy.

Gaytan and Murillo were previously indicted with ten other defendants on charges they held program participants against their will, coerced participants to surrender welfare benefits, and compelled participants to panhandle for the financial benefit of the church leaders.

Both Gaytan and Murillo admitted to conspiring with the other defendants to benefit financially from the forced labor conspiracy. In particular, both Gaytan and Murillo admitted defendant Victor Gonzalez, the former pastor of IVM, instructed all directors in charge of IVM properties to screw or nail windows shut and keep doors locked from the inside in order to prevent IVM participants from leaving. Gaytan added that Gonzalez and another IVM leader told him it was necessary to continue recruiting participants into IVM and prevent participants from leaving in order to increase fundraising proceeds for the benefit of IVM.

Murillo implicated additional defendants who punished her for allowing IVM participants to leave. Both Gaytan and Murillo added that various co-defendants had directed them to falsely instruct female participants that Child Protective Services would take their children, or fail to return them, if they left IVM.

IVM operated a non-denominational church headquartered in El Centro, and had opened approximately 30 affiliate churches throughout the United States and Mexico, including Los Angeles, Santa Ana and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; and Brownsville, Texas. IVM’s express purpose is to “restore” drug addicts at faith-based rehabilitation group homes and raise money to open churches in other cities to do the same.

In addition to their church and main office, IVM owns and operates two women’s group homes and a men’s group home in the El Centro area. IVM also operated homes in Calexico and Chula Vista. Many participants were recruited from outside of El Centro, including San Diego, and as far away as Texas. IVM members allegedly induced participants to accompany them to receive free food and shelter with the false promise that they would be provided resources to return home. Many participants, including those who did not require rehabilitation services, claimed they were later held at IVM properties against their will.

The indictment alleges that all of the defendants confiscated identification documents in order to prevent IVM participants from leaving IVM and to maintain their labor. IVM leaders checked in participants at the IVM group homes, where they were required to sign agreements to adhere to rules, including never leaving the house unaccompanied, and turning over all identifications and personal items.

Both Gaytan and Murillo admitted they helped enforce the IVM rules by checking in new IVM participants, obtaining and using their Electronic Benefits Transaction cards obtained through the Supplemental Nutrition Assistance Program (SNAP), and requiring participants to panhandle on behalf of IVM. Gaytan and Murillo also pleaded guilty to a separate offense of Benefits Fraud based upon their unauthorized acquisition of SNAP benefits from others, in violation of Food Stamp Regulations.

Gaytan entered his guilty plea before U.S. Magistrate Judge Linda Lopez and Murillo entered her guilty plea before U.S. Magistrate Judge F.A. Gossett. Both are scheduled to be sentenced by U.S. District Judge Barry Ted Moskowitz on May 5, 2020.

“The most vulnerable among us are entitled to the protection of the law,” said U.S. Attorney Robert Brewer. “We encourage everyone to help identify forced labor victims in all locations or situations where exploitation is possible.” Mr. Brewer added that his office would be hosting a forum on forced labor on April 23, 2020, to bring together law enforcement agencies, non-governmental organizations, and community organizations that may encounter potential victims of forced labor, all in an effort to increase the identification of victims and prosecute those who exploit them.

Brewer praised FBI agents and prosecutor Chris Tenorio for excellent work on this important case.

DEFENDANTS                                            Case Number 19CR3255-BTM                                     

Jose Gaytan                                                    Age: 47                                   El Centro, CA

Sonia Murillo                                                  Age: 51                                   El Centro, CA

SUMMARY OF CHARGES

Conspiracy to Commit Forced Labor and Benefits Fraud – Title 18, U.S.C., Section 371

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

Food Stamp Act (Benefits Fraud) – Title 7, U.S.C., Section 2024(b)

Maximum penalty: 20 years’ imprisonment and $250,000 fine (If the benefits were $5,000 or more)

AGENCY

Federal Bureau of Investigation

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

*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. The VCHT Section also provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.

Assistant U.S. Attorney Amanda Griffith (619)546-8970 and Janet Cabral 546-8715

NEWS RELEASE SUMMARY – February 26, 2020

SAN DIEGO – Carsten Igor Rosenow was sentenced in federal court today to 25 years in prison for sexually exploiting children in the Philippines.

Rosenow was found guilty by a federal jury on August 30, 2019, on charges of production of child pornography and possession of child pornography. Rosenow, a former Chief Marketing Officer for tech company Illumina, Inc., who lived in San Diego, came to the attention of law enforcement when the FBI identified him as someone who regularly traveled abroad, including to the Philippines.

“Sexual crimes against children are heinous and tragic wherever they occur, and we will not let borders keep us from protecting these vulnerable victims whenever possible,” said U.S. Attorney Robert Brewer. “The law allows us to pursue cases against U.S. citizens who victimize children around the world, and that’s what we’ve done here. This defendant is off the streets for 25 years, and that makes this a very good outcome.”

“The FBI investigates U.S. citizens who travel overseas to engage in illegal sexual conduct with children under the age of 18 as well as the production of child pornography,” stated FBI Special Agent in Charge Scott Brunner.  “The seriousness of Rosenow’s crimes cannot be overstated. Preying upon children, no matter where they live, and exploiting them is extremely damaging to children and to our global society. Protecting the vulnerable is a top priority for the FBI and we stand committed to investigating and prosecuting anyone who seeks to harm children.”

The FBI also received information that Rosenow was communicating through Facebook with what appeared to be minor females living in the Philippines, using an account under the name “Carlos Senta,” and making arrangements to meet to engage in sexual activities while he was traveling there.

The FBI was alerted that Rosenow was scheduled to return to the United States from the Philippines in June of 2017, and he was arrested by FBI agents when he arrived at the airport in San Diego on June 21, 2017. Rosenow’s baggage and residence were searched pursuant to search warrants. Three devices seized from Rosenow’s luggage contained videos, produced by Rosenow while in the Philippines, showing Rosenow engaging in sexual acts with minor females, and recording those sex acts. Additional devices seized from his residence also contained visual depictions of Rosenow engaged in sexual acts with minors while in the Philippines.

Facebook records introduced into evidence at trial established that prior to meeting with one of the girls, Rosenow was told she was 12 years old. While engaged in the sexual activity with the girl, she told Rosenow she was 15. Rosenow also admitted as part of the evidence at trial that he knew that another video, which showed him engaged in sexual acts with three minor females, one of whom was a prepubescent female, was produced by him while in the Philippines. Rosenow was charged by the United States with both using a minor to engage in sexual conduct outside the United States, for the purpose of producing visual depictions of that conduct, and intending to transport it back to the United States, and with possession of child pornography.

Rosenow testified at trial and admitted that while he was abroad in the Philippines for work, he had sex with girls who he knew were minors, which is defined under federal law as anyone under the age of 18.  The parties also agreed to facts which were presented to the jury, showing that the defendant produced videos of himself engaging in sexual acts, including vaginal intercourse, with minor females and one prepubescent girl under the age of 12. The jury found defendant guilty of both charges.

At sentencing, the prosecutor stressed that Rosenow engaged in sex acts with prepubescent and minor-aged children in exchange for money, cell phones, and chocolates, treating those children as a commodity. The Court agreed that the nature and circumstances of the offense were aggravated by anyone’s definition, finding the videos of defendant engaging in sex acts with the children “deeply disturbing on many levels.” The Court rejected the notion that the defendant merely engaged in commercial sexual transactions, noting the young age of the girls and that the girls “did not seem to be willingly engaging in the activity.” The Court noted the “defendant showed no sense of compassion for these kids or remorse or recognition regarding what he did” and that the defendant’s conduct “was despicable for lack of a better term.”

Following his release from federal prison, the Court sentenced the defendant to a lifetime of supervised release. The Court also ordered the defendant to pay a total fine of $100,000, and restitution to three victims of the offense.

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 Section 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 Neighborhood, and Human Trafficking.

U.S. Attorney Brewer lauded the efforts of FBI agents and prosecutors Mandy Griffith and Janet Cabral, who work hard to seek justice for minor victims who are sexually exploited.

DEFENDANT                                               Criminal Case No. 17cr3430-WQH

Carsten Igor Rosenow              Age: 55                     San Diego, CA

SUMMARY OF CHARGE

• Count 1 – Title 18, United States Code, Section 2251(c), Attempted Sexual Exploitation of a Child – Production of Child Pornography
• Count 2 – Title 18, United States Code, Section 2252(a)(4)(B), Possession of Images of Minors Engaged in Sexually Explicit Conduct

Maximum penalties:

• Count 1 - 30 years in prison, with a mandatory minimum 15 years in prison
• Count 2 – 20 years in prison
• As to all Counts, $250,000 fine

INVESTIGATING AGENCIES

Federal Bureau of Investigation

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

NEWS RELEASE SUMMARY – February 27, 2020

SAN DIEGO – Luis Alberto Vargas pleaded guilty in federal court today, admitting that he illegally smuggled pesticides into the U.S. from Mexico.

In his plea agreement, Vargas admitted that on September 9, 2019, he entered the United States at the Otay Mesa Port of Entry as a passenger in a black Toyota Camry.  He and the other occupants of the vehicle twice advised the primary inspector they were not bringing anything from Mexico. The primary inspector found three large suitcases in the trunk and referred the vehicle for secondary inspection.

Vargas acknowledged that the secondary inspector discovered two bottles of the Mexican pesticide Agroclor Clorpirifos Etil (1 liter each) and one 250 ml bottle of the Mexican pesticide Minartrin M Abamectina, concealed in a large suitcase in the trunk of the vehicle.  Vargas admitted that he purchased the pesticides in Culiacan, Mexico, and smuggled the pesticides into the United States.

The pesticides imported by Vargas were labeled in Spanish and did not bear any EPA registration number, as required by law for pesticides intended for use in the United States.  Pesticides with the active ingredients of those imported by Vargas are restricted use pesticides in the United States, and may be purchased and applied only by certified pesticide applicators. Vargas admitted that he holds no such certificate.  Moreover, the lawful importation of pesticides requires a Notice of Arrival to be provided to U.S. Customs pursuant to 19 CFR § 12.112.  Vargas further admitted that he provided no such Notice of Arrival for the pesticides in question.

“Laws regulating pesticides are meant to protect the public and the environment,” said U.S. Attorney Robert Brewer. “We are aggressively prosecuting violators who don’t respect these important regulations.”

 “The defendant knowingly smuggled unregistered pesticides into the country violating environmental regulations established to protect human health and the environment,” said Acting Special Agent-in-Charge Scot Adair of EPA’s Criminal Investigation Division in California. “Today’s guilty plea demonstrates that individuals who intentionally violate those laws will be held responsible for their crimes.”

“The smuggling and use of hazardous unregulated pesticide products is illegal and puts people's health, particularly young children, at risk,” said Cardell T. Morant, Acting Special Agent in Charge for Homeland Security Investigations (HSI) San Diego.  “HSI will continue to work with Customs and Border Protection, the Environmental Protection Agency, the U.S. Attorney’s Office, and other partners to prosecute those who threaten the health and safety of our communities for their own personal gain.”

Sentencing for Vargas is set for June 5, 2020 at 9:00 a.m. before U.S. District Judge Dana M. Sabraw.

DEFENDANT                                               Case Number 19cr4279-DMS                                 

Luis Alberto Vargas                                        Age: 29                       Bellflower, CA

SUMMARY OF CHARGES

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

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

AGENCY

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

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

NEWS RELEASE SUMMARY – February 27, 2020

SAN DIEGO – Curtis Technology, Inc., a San Diego firm that makes specialized coatings, pleaded guilty in federal court yesterday, admitting that the company illegally transported hazardous waste from its facility without a manifest.  In pleading guilty, Curtis Technology admitted that it conducted metal finishing operations at its location on Sorrento Valley Road, which generated various wastes, including ferric chloride, alkaline, waste filter cake, solvents and other chemicals.

The company admitted that between December 12, 2015 and August 22, 2019, CTI owner Alex Jvirblis (deceased) and a maintenance employee transported chemicals, including waste ferric chloride, waste filter cake, waste alkaline, waste solvents and other chemical wastes, from the CTI location on Sorrento Valley Road to three residences in San Diego owned by Jvirblis located on Wrelton Drive, Corte Morea, and Bourgeois Way. The chemicals were not accompanied by a hazardous waste manifest at the time of transportation.

The waste ferric chloride and waste alkaline are federally-regulated hazardous wastes having the characteristic of corrosivity.  The waste solvents are federally-regulated hazardous wastes having the characteristic of ignitability.  The waste filter cake is a federally-regulated listed hazardous waste, assigned waste code F006 for wastewater treatment sludges from electroplating operations.  All of these wastes are required by regulation to be transported with a uniform hazardous waste manifest.  The firm admitted that Alex Jvirblish acted knowingly, that is with knowledge that the chemicals transported to the three sites were not accompanied by a hazardous waste manifest and with knowledge that the chemicals were waste that had the potential or substantial potential to be harmful to others or to the environment.

Federal search warrants were conducted at the three sites in November, 2019, and the chemicals were recovered.  At one of the residences, chemicals were discovered which were too unstable to safely transport for disposal.  The area was evacuated, and the chemicals were detonated on site by the Sheriff’s Department Bomb Squad.

“These kind of violations have the potential to jeopardize public health and damage the environment,” said U.S. Attorney Robert Brewer. “We will hold companies accountable when they take short cuts that put people and our environment at risk.”

San Diego FBI Special Agent in Charge Scott Brunner stated, “Today's plea was made possible by extraordinary investigative effort expended in a compressed time frame by the San Diego Environmental Crimes Task Force. The FBI is grateful for the integral support of the San Diego Fire Department, San Diego Police Department, San Diego County Department of Environmental Health (HAZMAT) and the Environmental Protection Agency, in expeditiously locating and neutralizing these dangerous chemicals."

“The law protects our communities and the environment by requiring proper storage, transportation, and disposal of hazardous waste,” said Acting Special Agent-in-Charge Scot Adair of EPA’s Criminal Investigation Division in California.   “This case demonstrates that EPA and its law enforcement partners are committed to holding knowing violators of those requirements accountable for their actions."

Sentencing is set before U.S. District Judge John A. Houston on March 16, 2020, at 11:00 am.

DEFENDANT                                               Case Number 20cr0715-JAH                                              

Curtis Technology, Inc.                                Incorporated: 1981                              San Diego, CA

SUMMARY OF CHARGES

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

Maximum penalty for corporation: Five years of probation and a fine of the greater of  $500,000 or $50,000 per day of violation and a minimum fine of $5,000 per day of violation

AGENCIES

U.S. Environmental Protection Agency, Criminal Investigation Division

Federal Bureau of Investigation

 

 

 

 

Assistant U.S. Attorneys Jaclyn Stahl (619) 546-8456 and Fred Sheppard (619) 546-8237

NEWS RELEASE SUMMARY – March 2, 2020

SAN DIEGO – United States District Judge Anthony J. Battaglia sentenced local attorney William David Turley to 46 months in custody for enticing a female to engage in prostitution. Judge Battaglia also ordered Turley to pay $50,000 in restitution to a minor victim involved in the case.

According to his plea agreement, on or about April 30, 2018, Turley began communicating with an adult female victim whom he met on the website sugardaddymeet.com. On or about May 3, 2018, Turley persuaded, induced, and enticed the victim to take a flight from a city in California to Las Vegas, Nevada to meet with him. Turley paid for the victim’s flight and other travel expenses. At the time the victim boarded the flight in California, she understood that she was traveling to Las Vegas to engage in sexual acts with Turley in exchange for monetary compensation. In Las Vegas, Turley provided the victim with between $1,500 and $1,800 in cash in exchange for sexual intercourse.

The plea agreement also states that on or about May 12, 2018, Turley began communicating with the minor female victim via sugardaddymeet.com. In conversations with the minor victim, they discussed that she was 18 years old. But he was aware that she was a high school student, that she could not meet on weekends because she was grounded, and that her parents had taken her cellphone away due to poor performance in school. Turley met with the minor victim on or about May 15, 2018, at a public library near her high school.

According to the plea agreement, on or about May 16, 2018, Turley again met the minor victim at the library after school and drove her to a store where Turley purchased the minor victim a cellphone. Turley then drove the minor victim a short distance, parked the car, and engaged in a sex act with the minor. The victim told Turley she wanted to stop and needed to get home. Turley gave the minor victim $300.

U.S. Attorney Robert Brewer praised the FBI, the San Diego Human Trafficking Task Force and prosecutors Jaclyn Stahl and Fred Sheppard for ensuring that Turley’s victims had a voice and saw justice done. “We are committed to enforcing the laws of the United States and will prosecute individuals who break the law regardless of their wealth, job title, or status,” Brewer said.

“Human trafficking and sex crimes involving our children cannot be tolerated,” said FBI Special Agent in Charge Scott Brunner. “The FBI will continue to work tirelessly to reveal these horrible crimes and bring safety and closure for the victims and our communities.”

DEFENDANT                                               Case No. 18-CR-4574-AJB

William David Turley                                     Age: 61                       San Diego, CA

SUMMARY OF CHARGES

Enticing and Coercing a Female to Engage in Prostitution, in violation of 18 U.S.C. § 2422(a).

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

INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego Human Trafficking Task Force

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – February 21, 2020

SAN DIEGO – The San Diego Sheriff’s Department has complied with two of four immigration subpoenas issued last Friday by U.S. Immigration and Customs Enforcement. These subpoenas sought information about multiple illegal aliens with extensive criminal records and history of illegal entry into the United States.  Currently, the individuals are facing additional charges, which include sexual assault of a minor, spousal abuse and false imprisonment, drug possession, assault, and spousal battery.

U.S. Attorney Robert Brewer issued the following statement: “We appreciate the Sheriff’s Department’s compliance with the ICE enforcement subpoenas. We are particularly grateful for the strong working relationships among federal and local law enforcement agencies in the Southern District of California. The sharing of information by law enforcement is crucial to protecting the public and the effective enforcement of our laws.”

There were four subpoenas issued last week; the Sheriff’s Department complied with the first two, which were due this week. The remaining two are due next week.

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

NEWS RELEASE SUMMARY – February 19, 2020

SAN DIEGO – U.S. Customs and Border Protection Officer Esaul Bello pleaded guilty in federal court today, admitting that he used unreasonable force on an individual who had applied for admission to the U.S. at the Calexico, California Port of Entry.

According to his plea agreement, Bello was on duty at a Primary Vehicle Lane booth at the Calexico Port of Entry on November 26, 2018, when he encountered the individual in question. During the course of the inspection, Bello placed two hands around the neck of the individual, who was not offering any physical resistance. Bello then shook the individual, in violation of the individual’s Fourth Amendment right to be free from unreasonable seizure and the unreasonable use of force. As a condition of his plea, Bello agreed to voluntarily resign his employment with the U.S. government and terminate his security clearance.

“This is a rare and troubling situation,” said U.S. Attorney Robert Brewer. “We will always move swiftly to protect the public from officers who use their power to violate another person's Constitutional rights.”

“The DHS OIG takes any and all allegations of abuse of authority seriously and intends to hold accountable those who try to use their official position to take advantage of others,” said Angie Cuevas-Mason, Assistant Special Agent in Charge, Department of Homeland Security, Office of Inspector General, El Centro, California. “The DHS OIG will continue to use its investigative resources to stop those who use their official authority to violate the rights of others.”

Bello is scheduled to be sentenced on June 2, 2020 by U.S. Magistrate Judge Karen S. Crawford.

This case is being prosecuted by Assistant U. S. Attorney Christopher P. Tenorio and Civil Rights Division Trial Attorney DW Tunnage.

DEFENDANT                                               Case Number 20cr0015-KSC                                 

Esaul Bello                                                      Age: 53                                   San Diego, CA

SUMMARY OF CHARGES

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

Maximum penalty: One year of imprisonment and $100,000 fine

AGENCY

Department of Homeland Security, Office of the Inspector General

*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. The VCHT Section also provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.

 

 

Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768 and Larry Casper (619) 546-6734   

NEWS RELEASE SUMMARY – February 12, 2020

SAN DIEGO – Maxwell Joseph Gaffney of Ramona was sentenced today by U.S. District Judge Michael M. Anello to 20 years in prison for distributing the heroin that caused the death of his 23-year-old acquaintance, Kyle Rodriguez, on February 17, 2017.

Gaffney was convicted by a federal jury on June 24, 2019.

According to evidence presented at trial, Rodriguez had returned home after an evening spent with friends.  He locked himself in the family bathroom, where he ingested heroin by heating it over tin foil and inhaling the smoke, a method known as “chasing the dragon.” According to a government expert who testified at trial, “chasing the dragon” is one of the most dangerous and lethal ways of using heroin.

The overdose death was a shock to his parents, who believed Rodriguez was well on his way to a productive and happy life after almost 10 months of being clean, being gainfully employed and having a girlfriend who cared deeply for him. That night, Rodriguez’s girlfriend and parents discovered Rodriguez in the bathroom unconscious. First responders were unable to revive Rodriguez. Sheriff’s deputies observed drug paraphernalia and heroin residue near his body.

Investigators found text messages between Rodriguez and Gaffney indicating that Gaffney supplied heroin to Rodriguez on the evening of February 16, 2017, and Rodriguez had driven to Gaffney’s residence to purchase the heroin. Gaffney, who had a felony drug conviction when he was 19, was known to law enforcement as a heroin dealer. Thereafter Gaffney was  contacted by law enforcement a number of times related to his criminal conduct. The investigation also revealed that Gaffney continued to sell heroin even after learning that Rodriguez overdosed and died.

“This case is a tragedy for two families,” said U.S. Attorney Robert Brewer. “One young man who had achieved 10 months of sobriety and was well on his way to a new life, has lost it. And today, with this sentence, another young man is spending a significant portion of his in prison. And their families are left with nothing but sorrow. For this reason, we will do all that we can to save other families from this fate. We will continue to aggressively fight the grip that opioids have on our country by pursuing cases against those who distribute the drugs that are causing an overdose crisis in our community. No parent should have their child taken from them by this scourge.”

The government’s sentencing papers noted that the Rodriguez family no longer has a son and a brother and they seek justice for a life cut short so that other families will not have to experience the same tragedy and grief they have endured. In a letter to the judge, Sheila Scruggs, the mother of Rodriguez, wrote, “There is not a day that goes by I don’t think of him. I feel like I’m in a nightmare that I can never wake up from. Every time I close my eyes, I’m taken back to that moment of seeing my son on the floor of our bathroom, blue and lifeless. I can hear myself yelling his name begging him to please take a breath.  As a nurse, I have saved countless lives, but that early morning of February 17, 2017, I was unable to save my own child and I will have to live with that daily.”

Kyle Rodriguez’s sister, Kendra Bodkins, told the court at today’s hearing that her “social, funny and smart” brother, a motocross racer, became addicted to painkillers after his foot was crushed by an off-road vehicle. This addiction led him to heroin. “My brother never wanted to grow up to be a heroin addict. We didn’t have a broken family. We had it all and it was just a series of unfortunate events that led him down that path. But he was an amazing person, always willing to help anyone out. And he had a huge heart. This drug is constantly ruining lives and ripping families apart every single day. So I hope people can learn from our tragedy and think twice before they start using or even think about relapsing…or selling this drug.”

In July 2017, after the death of Kyle Rodriguez and others, the Sheriff's Department initiated the first overdose death response team to investigate these types of cases.  Since then, a multi-agency team was created in San Diego and hosted by the Drug Enforcement Administration to investigate and prosecute overdose death cases in San Diego. The Sheriff's Department and other local law enforcement entities have delegated resources to that effort and have helped to pursue critical evidence in overdose death cases. The Sheriff's Department is working aggressively to remove these dangerous drugs from the streets and hold heroin, fentanyl and other illicit drug dealers accountable for endangering the lives of others.

“The San Diego County Sheriff's Department will continue to work with our law enforcement partners to ensure those responsible for distributing illegal drugs are held accountable,” said  Lt. Michael McNeill of the Sheriff's Ramona Substation. “Today's sentencing represents a significant victory in the fight against the opioid epidemic.”

DEFENDANT                                   Case Number 17-cr-3330-MMA                                                     

Maxwell Joseph Gaffney                    Age: 26                       Ramona, California

SUMMARY OF CHARGE TO WHICH DEFENDANT FOUND GUILTY AFTER TRIAL

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

Maximum Penalty – Mandatory minimum 20 years to a maximum of life in prison

INVESTIGATING AGENCIES

San Diego Sheriff’s Department

San Diego Medical Examiner’s Office

 

NEWS RELEASE SUMMARY – February 10, 2020

SAN DIEGO – U.S. Attorney Robert Brewer today called for an end to “Sanctuary City” laws, saying the state statute prohibiting local law enforcement officials from sharing information with federal counterparts about dangerous criminals has made our communities less safe.  

California Senate Bill 54 largely restricts local law enforcement’s ability to cooperate with federal immigration authorities. The law generally prohibits state and local authorities from inquiring about a person’s immigration status, detaining them based on a “detainer” request from immigration authorities, and providing information about an undocumented criminal’s release date or other personal information, such as address information that could be used to locate someone potentially subject to deportation or removal.  The law does provide for some exceptions for individuals convicted of certain crimes.  

“The law’s prohibition against local law enforcement cooperating with their federal counterparts is inconsistent with their shared mission to protect the public above all else,” said U.S. Attorney Robert Brewer.  “The law not only results in the release of individuals who may pose a threat to the safety of our communities, but it also increases the risk for law enforcement.”

Brewer continued: “Any time a detainer is not honored or the sharing of information about individuals in police custody is prohibited, our local law enforcement officers and our communities are put in danger unnecessarily. For instance, the prohibition on honoring detainers necessarily means that rather than taking custody of someone from a local jail, law enforcement must arrest that person in the community, which presents more risk to both our citizens and our officers.” 

In San Diego County recently, the Sheriff’s Department was unable to notify immigration authorities when illegal immigrants were released on bond following arrests for  possession of methamphetamine, drunken driving and carrying a concealed weapon.

“Our No. 1 priority is to protect the public, but sanctuary laws prevent us from doing that to the best of our ability,” Brewer said. “We have an excellent relationship with our local law enforcement partners, but, dangerously, this law ties their hands. Sanctuary laws jeopardize public safety by preventing the federal government from locating, arresting, and prosecuting removable aliens inside the United States.”

“While we value our relationships with our local law enforcement partners in San Diego, it is important to remind the public of the serious threat that dangerous state sanctuary laws pose on public safety in our communities,” said Gregory Archambeault, Immigration and Customs Enforcement, Enforcement and Removal Operations Field Office Director in San Diego. “Currently the state sanctuary laws allow criminals to be released to the street and commit more crimes, which increases the threat to public safety, national security and the safety of our community.  It would be much safer if ICE were able to transfer the criminals while they are inside the county jail.”

 

 

 

 

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

NEWS RELEASE SUMMARY – February 10, 2020

SAN DIEGO – Hector Rodriguez-Chavez, a Mexican national, was sentenced in federal court today to 141 months in prison for pointing a loaded handgun at a U.S. Border Patrol agent in November 2018.

Rodriguez-Chavez pleaded guilty in September 2019 to one count of assault on a federal officer with a deadly weapon and one count of brandishing a firearm during and in relation to a crime of violence. During the sentencing hearing, Border Patrol agents described how they came upon Rodriguez-Chavez in a remote area approximately three miles east of the Otay Mesa Port of Entry. Rodriguez-Chavez turned and pointed a loaded semiautomatic pistol at one of the agents. That agent told the court he made a split-second decision to grab Rodriguez-Chavez’s gun and wrestle it out of his hands.

U.S. District Judge Gonzalo Curiel imposed a 141-month sentence for the two counts, plus an additional 24 months in custody for violating the terms of supervised release from a 2014 conviction for illegal re-entry of a deported alien. In imposing the sentence, Judge Curiel noted that one of the purposes of the sentence was to promote respect for the law. Judge Curiel noted how Border Patrol agents must work in remote areas and that, “few law enforcement officers place their life on the line to the extent that Border Patrol agents do.”

“This sentence is a fitting reminder that the safety of our courageous agents, who put their lives on the line every day to protect our country, is of paramount importance to our office and to the community,” said U.S. Attorney Robert Brewer.

“I’m pleased by this sentence,” said Chief Patrol Agent Aaron M. Heitke. “Any day that our agents go home safe is a good day. Border Patrol Agents risk their lives every day protecting America and the agent’s quick thinking in this case prevented any bloodshed.”

DEFENDANTS                                            Case Number 16-CR-0730                                      

Hector Rodriguez-Chavez                               Age: 62         Guadalajara, Mexico

SUMMARY OF CHARGES

Count 1: Assault on a Federal Officer, in violation 18 U.S.C. 111 (a)(b)

Maximum Penalty: Twenty years in prison

Count 2: Brandishing a Firearm During and in Relation to a Crime of Violence, in violation of 18 U.S.C. 924 (c)

Maximum Penalty: Mandatory Minimum of seven years in prison, maximum life

AGENCIES

Federal Bureau of Investigation

U.S. Border Patrol

 

SAN DIEGO ­– Bing Han and Lei Zhang pleaded guilty in federal court today for operating unlicensed money transmitting businesses. Their guilty pleas are believed to be the first in the United States for a developing form of unlawful underground financial institution that transfers money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls. 

Special Agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force, and the Drug Enforcement Administration led the investigation into Han’s and Zhang’s financial operations. As admitted in the plea agreements entered today before U.S. Magistrate Judge William V. Gallo, Han and Zhang would collect U.S. dollars (in cash) from various third-parties in the United States and deliver that cash to a customer, typically a gambler from China who could not readily access cash in the United States due to capital controls that limit the amount of Chinese yuan an individual can convert to foreign currency at $50,000 per year. Upon receipt of the U.S. dollars, the customer (i.e., the gambler) would transfer the equivalent value of yuan (using banking apps on their cell phones in the United States) from the customer’s Chinese bank account to a Chinese bank account designated by defendant Han or Zhang. For facilitating these transactions, Zhang and Han were paid a commission based on the monetary value illegally transferred. 

U.S. Attorney Robert S. Brewer, Jr. said, “The United States stands vigilant against the constantly evolving ways in which individuals and organizations seek to operate outside the conventional financial system. Violating United States anti-money laundering laws not only endangers the integrity of the global financial system, but doing so hinders the ability of law enforcement officers to confront criminal conduct including money laundering and narcotics trafficking.”

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

“This case demonstrates that those who attempt to use underground or unregulated money transfer systems cannot evade detection and punishment,” said Cardell T. Morant, acting Special Agent in Charge for HSI San Diego. “HSI and our domestic and foreign partners will continue to work together aggressively to investigate and prosecute those who seek to hide their involvement in transnational crime by employing such international money laundering schemes.”

“Criminals keep trying to find ways to circumvent our financial system by laundering money,” said Tara Sullivan, Special Agent in Charge of IRS Criminal Investigation Las Vegas. “Unfortunately for Han and Zhang, the IRS Criminal Investigation Las Vegas Financial Crimes Task Force was relentless in seeking out and disrupting their underground banking network and will continue to work with our law enforcement partners to uphold anti-money laundering laws”.

“Although Mr. Han and Mr. Zhang did not admit to transacting narcotics proceeds in their unlicensed money transmitting businesses, we know that drug trafficking organizations are willing to use a variety of businesses to launder proceeds from the sales of drugs,” said DEA Special Agent in Charge John W. Callery. “DEA and our outstanding partners will continue to investigate illicit financial transactions and anyone who may operate businesses that stand to profit from illegal drug sales.”

U.S. Attorney Brewer commended the diligence and dedication of Assistant U.S. Attorneys Daniel Silva and Mark W. Pletcher, the prosecutors on this case.  Sentencing for Mr. Han is scheduled to occur on May 1, 2020 before Hon. Janis L. Sammartino. Sentencing for Mr. Zhang is scheduled to occur on May 4, 2020 before Hon. William Q. Hayes. Han and Zhang both face a maximum of 5 years in prison.  

DEFENDANTS                                              Case Numbers 20-CR-369-JLS (Han)

Case Number  20-CR-370-WQH (Zhang)                                               

Bing Han                                                         Las Vegas, NV                       Age: 44

Lei Zhang                                                       Las Vegas, NV                       Age: 40

SUMMARY OF CHARGES*

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

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

AGENCIES

Homeland Security Investigations

IRS Criminal Investigation Las Vegas Financial Crimes Task Force

Drug Enforcement Administration

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

Joint Statement by California’s United States Attorneys: Robert S. Brewer, Southern District; Nicola T. Hanna, Central District; David L. Anderson, Northern District; McGregor W. Scott, U.S. Attorney, Eastern District

In 2017, almost 50,000 Americans died from opioid overdoses. In California alone, there were 2,428 fatal opioid overdoses in 2018. And it’s getting worse. In San Francisco and Los Angeles Counties, for instance, opioid fatalities have increased by 54% and 41%, respectively, since 2016. San Diego County and the Central Valley are also experiencing unprecedented levels of fatal opioid overdoses. This is a crisis, and illicitly produced fentanyl is largely responsible. 

To fight this epidemic, law enforcement must have all the necessary tools at their disposal. One such tool is the Drug Enforcement Administration’s (DEA) 2018 order making all fentanyl-related drugs illegal in the United States. Unfortunately, that order was temporary and will expire in less than two weeks. The Senate recently passed bipartisan legislation approving a 15-month extension of the temporary order. While this is a step in the right direction, and the House should pass the Senate’s bill, a longer term solution is needed. We need a permanent ban on all fentanyl-like drugs.

Illicit fentanyl is manufactured in labs in China and Mexico and smuggled into the United States. It is 50 times more powerful than heroin and 100 times more powerful than morphine. So powerful, in fact, that only a couple milligrams – the size of a few grains of salt – can kill the average person.

Fentanyl, however, is unique. Because it is made in labs using chemicals, its structure is easily manipulated. And the drug cartels that manufacture and traffic this synthetic poison into our neighborhoods understand American laws and know how to exploit them. They know that by changing a single molecule in the chemical structure of fentanyl, they have essentially created a new drug. One that, unlike fentanyl, is not illegal in the United States. These drugs, known as “fentanyl analogues,” do as fentanyl does: create more addicts and kill more Americans. The analogues – which can be up to 100 times more potent than fentanyl and 10,000 times more potent than morphine – will become legal if Congress fails to act.   

The DEA’s 2018 decision to temporarily schedule – that is, to make illegal – all fentanyl-related substances was a response to the extraordinary legal loophole exploited by drug traffickers. In April 2019, China also outlawed all fentanyl-related substances. This is extraordinary progress, with one caveat. Unlike China’s law, the United States’ has an expiration date.

On Feb. 6, 2020, the DEA’s temporary order expires, and all drugs seized by U.S. investigators over the past two years that have tested positive as fentanyl analogues will no longer be illegal. If Congress fails to pass the legislation it will have a dramatic impact not just on the prosecutors and law enforcement officers who spend their lives investigating and prosecuting drug dealers, but on communities already hard hit by the opioid epidemic, many of which are right here in California. 

Despite the tireless efforts of law enforcement, California continues to be a main thoroughfare for fentanyl and fentanyl-like drugs arriving from China and Mexico. In 2019, federal law enforcement agents seized about three-quarters of a ton of fentanyl at the six ports of entry we share with Mexico and in all places in between. That’s 20 percent more than in 2018. And our federal resources are not infinite; we need all the help we can get. Passing this legislation would provide invaluable support to us as prosecutors and the entire law enforcement community as we continue to combat the opioid crisis in California and throughout America. 

A number of organizations have voiced opposition to the proposed legislation, arguing that the bill does not “embrace public health approaches to the overdose crisis.” We agree that a comprehensive approach to the crisis is needed, and a permanent fentanyl analogue ban should be viewed as part of a holistic effort. But time is running out: there is no doubt that drug traffickers are eagerly awaiting the temporary order’s expiration to start flooding our communities with these dangerous drugs. The passage of this legislation is quite literally a matter of life and death. 

There should be nothing partisan about declaring fentanyl analogues illegal. There is certainly nothing partisan about saving lives and bringing justice to those who profit from addiction and death. For the safety of our communities, we urge Congress to pass legislation making permanent the DEA’s temporary scheduling of all fentanyl-related drugs. 

NEWS RELEASE SUMMARY – January 23, 2020

SAN DIEGO – Arch Health Partners, Inc. (“Arch Health”) has agreed to pay the United States $2,910,370 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare.  Arch Health is a San Diego-based medical organization that contracts with physician groups to provide care through the Palomar Health system.

The United States alleged that Arch Health violated the False Claims Act by submitting claims for federal reimbursement for medical evaluation and management services absent sufficient documentation regarding the nature and complexity of the services provided.  Those particular allegations were originally self-disclosed by Arch Health and were also brought in a lawsuit filed by a former employee of Arch Health, Catherine Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery.   Ms. Jones will receive $183,830 of the settlement proceeds.  The United States also alleged, based on certain self-disclosures by Arch Health, that it paid compensation to referring physicians and physician groups that was above fair market value in violation of the Anti-Kickback Act, the Stark Statute, and, by extension, the False Claims Act. 

“Improper billing practices and unlawful financial arrangements with referring health care providers present serious program integrity concerns,” said United States Attorney Robert S. Brewer, Jr.  “This civil settlement confirms our commitment to civil health care fraud enforcement as a key component of the mission of our office.  We also commend the whistleblower for coming forward and working with our investigators.”

“When companies falsely claim payment for services, taxpayers and government health programs are both victimized,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “We will continue working with our law enforcement partners to hold accountable those who would harm these programs.”

“This $2.9 million dollar settlement demonstrates how these violations have a significant and direct economic impact on the health care industry,” said FBI Special Agent-in-Charge Scott Brunner.  “Our priority is to protect consumers and hold accountable those in the healthcare system who misuse government health programs.”

The investigation was conducted by the United States Attorney’s Office for the Southern District of California, the U.S. Department of Health and Human Services’ Office of Inspector General, and the Federal Bureau of Investigation.  U.S. Attorney Brewer commended the excellent work by AUSA Glen Dorgan of the office’s Civil Division, whose diligence was a major factor in resolving this matter.

This case is captioned United States ex rel. Jones v. Arch Health Partners, Inc., et al., Case No. 3:17-cv-0090-MMA-BLM, and the matter was handled by Assistant U.S. Attorney Glen F. Dorgan of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office.

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

NEWS RELEASE SUMMARY – January 21, 2020

SAN DIEGO – Egisto Salerno, a medical doctor practicing in San Diego, pleaded guilty to opioid distribution in federal court today, admitting that he signed bogus prescriptions for multiple deceased or incarcerated patients.

According to his plea agreement, Salerno, 75, illegally distributed 78,544 hydrocodone pills. Hydrocodone is an opioid pain medication commonly known as Norco or Vicodin. Salerno admitted that his prescriptions for the 10 mg tablets were outside the usual course of his medical practice and were without a legitimate medical purpose.

“We will continue to zealously pursue doctors who write opioid or other prescriptions that are plainly outside their professional practice and without a legitimate medical purpose,” said U.S. Attorney Robert Brewer.  “Even a medical degree does not put one above the law.” Brewer praised prosecutors Larry Casper and Victor White and DEA agents for their commitment to achieving justice in this case.

“Because of pill mills operated by doctors like Egisto Salerno, our country has been devastated by the negative effects of prescription pain medication,” said DEA Special Agent in Charge John W. Callery.  “But DEA and our partners at the U.S. Attorney’s Office are fighting back.  Today’s guilty plea is testament to their teamwork and dedication in thwarting the opioid crisis in the San Diego area.  Dr. Salerno’s medical career is over; he betrayed his oath to the medical community and his patients.  DEA and our partners will continue to conduct these investigations to ensure doctors are following the rules set forth when prescribing potentially deadly drugs.”

Salerno also admitted that an undercover federal agent who visited Salerno’s clinic on six occasions received six hydrocodone prescriptions containing Salerno’s signature. In a separate instance, on a date when the undercover agent did not visit the clinic and the doctor did not see him, Salerno acknowleged that a prescription was written in the name used by the undercover agent and that Salerno completed and signed a progress note in the “patient” chart for the purported visit that did not occur.

Salerno used his medical practice on El Cajon Boulevard in San Diego to carry out this criminal activity between November 2014 and February 2018, the plea agreement said. During this period, Salerno also acknowledged that he pre-signed prescriptions and often allowed his non-physician employees to complete those prescriptions; and that, with regard to one of the multiple dead “patients,” his signature appeared on at least five prescriptions made out in the “patient’s” name that were issued and filled more than a year after the “patient” died.

Salerno is the seventh defendant to enter a guilty plea in connection with the pending case that flowed from the investigation of this “pill mill.”  Each of the defendants is awaiting sentencing.  The plea agreements of the six other defendants show that paid patient “recruiters” were bringing “patients,” many of whom were homeless, to Salerno’s office to secure hydrocodone prescriptions; that, after the prescriptions were written, the “patients” were brought to pharmacies to fill the prescriptions; “patients” turned over their hydrocodone tablets to the recruiters in exchange for payment and, in some instances, recruiters picked up the tablets from the pharmacies themselves; and, in turn, those hydrocodone pills were being sold by the lead recruiter in San Diego and that such pills were also smuggled into Mexico and sold to a pharmacy there.

The guilty plea was entered before, and accepted by, U.S. District Judge Cynthia Bashant who will sentence Salerno on May 11, 2020.

DEFENDANT                                   Case Number 18-cr-1405-BAS                                                       

Egisto Salerno, M.D.                          Age:    75                    San Diego, California

SUMMARY OF CHARGES

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 Guilty Pleas in same case:

Stephen Toney, Sr.:

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

Sentencing Date:         March 16, 2020

Amber Nicole Grabau:

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

Sentencing Date:         March 9, 2020

Lonell J. Ligon:

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

Sentencing Date:         April 6, 2020

Shalina D. Latson:

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

Sentencing Date:         March 9, 2020

LaJuan D. Smith:

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

Sentencing Date:         February 3, 2020

April J. Cervantes:

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

Sentencing Date:         March 2, 2020

INVESTIGATING AGENCY

Drug Enforcement Administration

ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.    

“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”

The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

The settlement resolves allegations that ResMed (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

“This settlement represents another example of our district’s commitment to prosecuting violations of the False Claims Act and the Anti-Kickback Statute,” said Lance Crick, Acting U. S. Attorney for the District of South Carolina.  “Medical decisions should be based on what is in the best interest of the patient and not based on financial incentives and related schemes.”

“Medical decisions should always be made without outside influence caused by cash payments, free goods, or other types of illegal remuneration, and we will continue to take action to prevent attempts to induce medical decisions through illegal kickbacks,” said Katherine L. Parker, Civil Chief, U.S. Attorney’s Office for the Southern District of California.  “We applaud the whistleblower for coming forward and notifying the United States.”

“Illegal kickbacks in the federal healthcare system create an unfair marketplace and the potential that medical decisions are not based on what is best for patients,” said U.S. Attorney Peter E. Deegan Jr. for the Northern District of Iowa.  “This settlement is another sign of our office’s dedication to fair and full enforcement of the False Claims Act.”

“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills.  This case rights that alleged wrong by ResMed,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”

Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General.  The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims.  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery.  The whistleblowers will collectively receive a roughly $6.2 million share of the settlement. 

“The government contended ResMed provided free goods and services to companies in order to sell more medical equipment bought by taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “The OIG’s integrity agreement with ResMed is designed to ensure such alleged behavior will not be repeated.”

“I applaud the Department of Justice and the U.S. Attorneys' for their continued efforts to hold health care providers accountable to the American taxpayer," said Army Lt. Gen. Ron Place, Director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”

This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.  

The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).  

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

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

Assistant U. S. Attorneys Joseph Price (619) 546-7642 and Dylan Aste (619) 546-7621    

NEWS RELEASE SUMMARY – January 15, 2020

SAN DIEGO – ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.

“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”

The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

The settlement resolves allegations that ResMed  (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

“Medical decisions should always be made without outside influence caused by cash payments, free goods, or other types of illegal remuneration, and we will continue to take action to prevent attempts to induce medical decisions through illegal kickbacks,” declared Katherine L. Parker, Civil Chief, United States Attorney’s Office for the Southern District of California.  “We applaud the whistleblower for coming forward and notifying the United States.”

“This settlement represents another example of our district’s commitment to prosecuting violations of the False Claims Act and the Anti-Kickback Statute,” said Lance Crick, Acting U. S. Attorney for the District of South Carolina.  “Medical decisions should be based on what is in the best interest of the patient and not based on financial incentives and related schemes.”

“Illegal kickbacks in the federal healthcare system create an unfair marketplace and the potential that medical decisions are not based on what is best for patients,” said U.S. Attorney Peter E. Deegan, Jr., for the Northern District of Iowa.  “This settlement is another sign of our office’s dedication to fair and full enforcement of the False Claims Act.”

“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills.  This case rights that alleged wrong by ResMed,” stated United States Attorney for the Eastern District of New York Richard P. Donoghue.  “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”

Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General.  The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims.  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery.  The whistleblowers will collectively receive a roughly $6.2 million share of the settlement. 

“The government contended ResMed provided free goods and services to companies in order to sell more medical equipment bought by taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “The OIG’s integrity agreement with ResMed is designed to ensure such alleged behavior will not be repeated.”

“I applaud the Department of Justice and the U.S. Attorneys' for their continued efforts to hold health care providers accountable to the American taxpayer," said Army Lt. Gen. Ron Place, director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”

This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.  

The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.). 

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

 

 

 

Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287

NEWS RELEASE SUMMARY – January 9, 2020

SAN DIEGO – Erik Alexi Martineau, a U.S. citizen who was living in Mexico, pleaded guilty in federal court today, admitting that he mailed an estimated 7,800 parcels containing fentanyl, methamphetamine and heroin from San Diego to locations throughout the U.S.

Martineau pleaded guilty before U.S. Magistrate Judge Barbara Major to Conspiracy to Distribute Controlled Substances. He is scheduled to be sentenced on March 30 at 9 a.m. by U.S. District William Q. Hays. Martineau faces a mandatory minimum sentence of 10 years in custody.

“The use of the Postal Service to distribute dangerous drugs – particularly deadly fentanyl – puts the Postal Service and the public at risk,” said U.S. Attorney Robert Brewer. “We are not going to allow drug traffickers to hijack the U.S. Mail.”

According to his plea agreement, in January 2018, Martineau rented a storage unit in San Diego County to package controlled substances like methamphetamine, heroin, and fentanyl for shipment to various locations. The defendant also opened a business account at an office supply store so that he could print shipping labels for parcels containing controlled substances. 

From January 2018 to June 29, 2019, Martineau received multiple shipping labels from others and arranged to print them at an office supply store. He picked up the controlled substances from various locations in San Diego and packaged the controlled substances inside his rented storage locker. During the 18-month conspiracy, Martineau packaged approximately 100 parcels each week, or about 7,800 parcels.

During the investigation conducted by the U.S. Postal Inspectors and Homeland Security Investigations, law enforcement seized hundreds of parcels containing controlled substances.

Brewer praised Assistant U.S. Attorney Sherri Walker Hobson and federal agents from Homeland Security Investigations and the U.S. Postal Inspectors for uncovering the scheme and working hard to achieve justice.

DEFENDANT                                              

Erik Alexis Martineau                         Age:    50        Mexico

SUMMARY OF CHARGES           Case Number 19cr2836WQH

Conspiracy to Distribute Controlled Substances, in violation of 21 U.S.C. 841 and 846

Maximum Penalty: Life in prison (10-year minimum mandatory); $10 million fine

INVESTIGATING AGENCIES

U.S. Postal Inspectors

Homeland Security Investigations

 

Special Attorneys David Leshner and Todd Robinson

TUCSON, Arizona – Heraclio Osorio-Arellanes was sentenced in federal court today to life in prison for his role in the murder of 40-year-old U.S. Border Patrol Agent Brian Terry on December 14, 2010.

On February 12, 2019, a federal jury found that Osorio-Arellanes, 41, was part of an armed crew of bandits that murdered Agent Terry while they were attempting to rob drug smugglers transporting drugs from Mexico into the United States. Osorio-Arellanes was convicted of nine counts, including first degree murder, second degree murder, conspiracy to commit robbery, attempted robbery, assault on four Border Patrol Agents and carrying a firearm during a crime of violence.  Osorio-Arellanes is the sixth of seven defendants in this case to be convicted and sentenced to date.

“Brian Terry exemplified the very best of law enforcement: A selfless, determined agent who was committed to protecting the people of the United States,” said U.S. Attorney Robert Brewer of the Southern District of California. “The United States has vigorously pursued justice for Agent Terry’s family and for the men and women of the U.S. Border Patrol. A life sentence for Agent Terry’s murder cannot eliminate his family’s suffering.  But it is our hope that this sentence brings some degree of comfort to Agent Terry’s family in knowing that the individuals responsible for his murder will be held accountable.”

“Today’s sentencing reflects the FBI’s unwavering commitment to ensure that all those responsible for the death of U.S. Border Patrol Agent Brian Terry are brought to justice,” said Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office.

“Today brings us one step closer to justice for Agent Brian Terry’s murder,” said Tucson Sector Chief Roy Villareal. “The sentencing brings a painful time closer to an end and serves as a reminder of the grave dangers our agents face in their selfless commitment to the safety of their communities and country.”

According to the evidence presented at trial, on December 14, 2010, Agent Terry’s elite Border Patrol BORTAC unit was in a rural area north of Nogales, Arizona, to interdict an armed “rip crew” that was robbing drug traffickers.  The BORTAC team observed a group of five bandits armed with assault rifles walking through a wash.  The BORTAC agents announced their presence, and the bandits fired on the agents.  The agents returned fire.  A bullet fired by one of the bandits struck Agent Terry in the lower back.  His fellow agents provided first aid, but Agent Terry was fatally injured. 

Heraclio Osorio-Arellanes, also known as Jesus Lionel Sanchez Meza and Lionel Portillo-Meza, is one of seven defendants charged in the District of Arizona with murder and other crimes arising from the murder of Agent Terry.  Osorio-Arellanes was taken into custody in 2017 by Mexican authorities in Chihuahua, Mexico based on a provisional arrest warrant issued at the request of the United States. He was transported to Mexico City for extradition proceedings and arrived in the United States on August 1, 2018.

Defendants Ivan Soto-Barraza and Jesus Lionel Sanchez-Meza were arrested in Mexico and subsequently extradited to the United States in 2014. They were convicted by a jury of first degree murder and other offenses in December 2015 following a jury trial and were sentenced to life in prison.

Defendants Manuel Osorio-Arellanes and Rosario Rafael Burboa-Alvarez pleaded guilty to first degree murder. Osorio-Arellanes was sentenced to 360 months in prison, and Burboa-Alvarez was sentenced to 324 months in prison.

Defendant Rito Osorio-Arellanes pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to 96 months in prison.

Defendant Jesus Favela-Astorga was arrested by Mexican authorities in November 2017 pursuant to a provisional arrest request filed by the United States Government. He is pending extradition to the United States and will be tried for Agent Terry’s murder following his extradition.

The case is being prosecuted by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson and David D. Leshner. The U.S. Attorney’s Office for the District of Arizona is recused. The case was investigated by the FBI. The apprehension was a coordinated effort by the Mexican Navy (SEMAR), Mexico’s Office of the Attorney General (PGR), FBI, U.S. Marshals Service and U.S. Border Patrol with significant assistance provided by the Criminal Division’s Office of International Affairs.

“The conviction and life sentence for Heraclio Osorio-Arellanes is the result of the dedicated efforts of the Federal Bureau of Investigation, including Special Agent Michelle Terwilliger, who has handled this case since December 2010,” U.S. Attorney Brewer said. He also praised prosecutors Leshner and Robinson for their dedication to achieving justice in this case.

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

NEWS RELEASE SUMMARY – January 2, 2020

SAN DIEGO – Mark D. Smith and Fane Robinson, two San Diego-area physicians, have paid the United States $948,768.18 to resolve allegations that they violated the federal False Claims Act by knowingly submitting false claims to Medicare.

Dr. Smith and Dr. Robinson are medical doctors specializing in ophthalmology.  They maintain a medical practice in San Diego known as San Diego Retina Associates and are participating providers in federally-funded health care programs including Medicare.

The United States alleged that Drs. Smith and Robinson violated the False Claims Act by submitting false claims to Medicare for care that was provided by a San Diego Retina Associates physician who was not properly credentialed at the time to render care to Medicare patients.

The United States also alleged that Drs. Smith and Robinson improperly received Medicare payments when another San Diego Retina Associates physician provided care to Medicare patients but Drs. Smith and Robinson submitted claims that misidentified the treating physician.

The settlement concludes a lawsuit originally filed in the United States District Court for the Southern District of California by Atul Jain, M.D., an ophthalmologist and former partner at San Diego Retina Associates. Dr. Jain sued under the qui tam, or whistleblower, provisions of the False Claims Act, which permits a private citizen to initiate a lawsuit on behalf of the United States for false claims and to share in the recovery.  Dr. Jain will receive $170,778.27 of the proceeds from the United States’ settlement with Drs. Smith and Robinson.

“Falsely billing in order to circumvent Medicare’s oversight of physicians negatively impacts taxpayers and puts at risk patients’ health,” said U.S. Attorney Robert Brewer. “This settlement reflects our commitment to maintain the integrity of the Medicare program. As this settlement also reflects, we continue to vigorously investigate cases brought to our attention by whistleblowers.  We commend the whistleblower in this case, Dr. Jain, for coming forward and for working with investigators.”

“Federal health care beneficiaries can clearly see federal health programs’ need to pay only for the services of properly credentialed eye doctors and other medical professionals. To do otherwise could harm both patients and taxpayers,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “We will continue working closely with our law enforcement partners to protect government healthcare programs and enrolled beneficiaries.”   

The investigation was conducted by the U.S. Attorney’s Office for the Southern District of California and the U.S. Department of Health and Human Services’ Office of Inspector General.   This case is captioned United States, et al. ex rel. Jain v. Dr. Mark D. Smith, M.D., et al., Case No. 18-cv-1213-AJB (WVG), and the matter was handled by Assistant U.S. Attorney Joseph P. Price, Jr. of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office. U.S. Attorney Brewer commended the prosecutors and investigators for working hard to bring the case to a successful conclusion.

Assistant U. S. Attorney Leah Bussell (619) 546-6727   

NEWS RELEASE SUMMARY – December 23, 2019

SAN DIEGO – The Southern District of California collected $15,280,216.07 in criminal and civil actions in Fiscal Year 2019.  Of this amount, $11,247,702.88 was collected in criminal actions and $4,032,513.19 was collected in civil actions.  The Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1,991,480.00 in cases pursued jointly by these offices. 

Additionally, the U.S. Attorney’s office for the Southern District of California, working with partner agencies and divisions, collected $10,665,224 in asset forfeiture actions in FY 2019.  

“The recovery of stolen funds and the return of that money to victims is an important priority for this office,” said U.S. Attorney Robert Brewer. “We use all available legal tools to recover money for victims and ensure that defendants are held accountable for the full amount of the losses.  These results are a great credit to the hard work and dedication of our Asset Recovery section led by Assistant U.S. Attorney Leah Bussell and our outstanding team of agency partners.”

In one case in August, the U.S. Attorney’s Office recovered $2,934,754.01 in fraud proceeds from Karen Galstian. Galstian had pleaded guilty to conspiracy to commit mail and wire fraud in November of 2015.  A court sentenced Galstian to 100 months custody and ordered him to pay restitution to the victim.  The United States Attorney’s office pursued collection of the restitution and in August of 2019, collected almost $3 million from assets owned by Galstian – funds that were distributed to the victim.

The U.S. Attorneys’ offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

 

 

NEWS RELEASE SUMMARY – December 20, 2019

SAN DIEGO – Liam Graham Szalay-Bristol, Jose Benjamin Cisneros-Quintero, and Cristian Rodriguez-Hernandez were charged in federal court yesterday with conspiring to import 505 pounds of methamphetamine, in violation of Title 21, U.S.C., Section 963.  Defendant Cisneros-Quintero was also charged with knowingly and intentionally importing the drug, in violation of Title 21, U.S.C., Sections 952 and 960.

On December 18, 2019, Cisneros-Quintero, the driver and sole occupant of a white bobtail box truck, arrived at the Otay Mesa Port of Entry Cargo Facility with what appeared to be a load of cement and/or clay blocks.  The U.S. Customs and Border Protection Officer inspected one of the cement blocks and observed a brown package inside, containing a white crystal substance that field-tested positive for methamphetamine.  The truck and Cisneros-Quintero were subsequently released from the inspection area and were kept under constant surveillance by special agents with Homeland Security Investigations. While agents watched closely, Cisneros-Quintero picked up defendant Rodriguez-Hernandez and met with Defendant Szalay-Bristol before proceeding to a storage facility, which defendant Szalay-Bristol unlocked. At that point, the three defendants unloaded a total of 60 packages weighing 505.87 pounds into the unit.  All three were arrested, charged, and appeared in federal court yesterday afternoon.

“Methamphetamine-related deaths are at record numbers here in San Diego, and this spike directly mirrors the increase in meth seizures at the border,” said U.S. Attorney Robert Brewer.  “Fortunately, diligent federal agents prevented this very large meth load from causing further misery in our community, and ensured that the smugglers responsible will be held accountable.”

“Methamphetamine continues to be a deadly epidemic impacting our communities, and San Diego is a key hub for Mexican cartel methamphetamine coming into the United States,” said Cardell T. Morant, acting special agent in charge of Homeland Security Investigations (HSI) San Diego.  “As this significant seizure makes clear, HSI, CBP, and our partners are resolute in our efforts to protect our communities and our country from the threats of drug trafficking.”

“Smuggling of narcotics is a serious threat to our communities.  As long as transnational criminal originations continue to profit from their illicit activities, they will continue to develop ways to move their product,” said Pete Flores, director of Field Operations for CBP in San Diego.  “Close collaboration between CBP and HSI is an essential piece to combatting trafficking of illegal narcotics.” 

DEFENDANTS                                              Case Number 19MJ5657

Liam Graham Szalay-Bristol                         Age: 21           San Diego      

Jose Benjamin Cisneros-Quintero                  Age: 25           Tijuana

Cristian Rodriguez-Hernandez                       Age: 31           Tijuana

SUMMARY OF CHARGES

Importation of Methamphetamine, in violation of 21 U.S.C. §§ 952, 960

Maximum penalty: Life in prison and $10 million fine

Conspiracy to import Schedule II Controlled Substance into the U.S., in violation of 21 U.S.C. § 963

Maximum penalty:  Life in prison and $10 million fine

AGENCIES

Homeland Security Investigations

Customs and Border Protection

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

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

NEWS RELEASE SUMMARY – December 17, 2019

SAN DIEGO – Laura Casas, who was convicted by a federal jury of smuggling $128,000 worth of methamphetamine through the Otay Mesa Port of Entry with her three children in the car, was sentenced in federal court Monday to 108 months in prison.

Casas was convicted of importation of methamphetamine following a two-day jury trial that concluded on September 6, 2019.

“Methamphetamine is ravaging our community and is a lethal drug,” said U.S. Attorney Robert Brewer. “It is strong, pure, cheap, and – because of the actions of this defendant and others like her – plentiful. I commend trial attorney Jaclyn Stahl for her excellent work on this case.”

“Methamphetamine is a powerful drug that continues to devastate our communities,” said Cardell T. Morant, acting special agent in charge of HSI San Diego. “This sentencing should serve as a stark reminder that those who facilitate the movement of dangerous drugs for transnational criminal organizations will be held accountable for their actions.”

On November 15, 2018, at approximately 12:04 a.m., the defendant, a U.S. Citizen, presented a California driver’s license and applied for entry into the United States at the port of entry. A narcotic detection dog alerted to the vehicle. In the secondary inspection area, officers removed paneling from the dashboard and discovered fifty packages of methamphetamine in a secret compartment. The packages weighed approximately 69 pounds. The drugs were concealed in a sophisticated non-factory compartment that required significant modifications to the vehicle and would have taken hours to construct.

According to evidence presented at trial, messages from the defendant’s phone, when compared with her crossing history, paint a clear picture of her planning and preparation to commit this crime.

Prosecutors argued for a longer sentence because the defendant testified falsely at trial that she did not know there were drugs in the vehicle. She also testified that the damning text messages on her phone were about a scheme of smuggling pug puppies – not drugs - into the United States. Her testimony was directly contradicted by the evidence.

Further, the United States believes that the defendant intended to suborn false testimony from the defendant’s sister-in-law and mother-in-law at trial. Both women told the pug smuggling story to agents when they were interviewed in anticipation of trial. They were set to testify to the pug smuggling story but chose not to at the last moment.

Evidence collected in anticipation of their testimony shows that the in-laws crossed into the United States from Mexico three months after the defendant’s arrest with puppies that were too young to enter the country legally. This evidence suggests that the defendant and her family not only manufactured this defense after her arrest but went to significant lengths to do so.

DEFENDANTS                                            Case Number 18-CR-5355-AJB                             

Laura Casas                                                     Age: 28                                   San Diego, CA

SUMMARY OF CHARGES

Importation of Methamphetamine, in violation of 21 U.S.C. §§ 952, 960

Maximum penalty: Life in prison and $10 million fine

AGENCY

Homeland Security Investigations

Customs and Border Protection