Southern District of California

Executive Assistant U. S. Attorney Linda Frakes (619) 546-6793  and Assistant U.S. Attorney Dylan Aste (619) 546-7621 

NEWS RELEASE SUMMARY – February 8, 2018

SAN DIEGO – U.S. Attorney Adam Braverman has appointed two Opioid Coordinators – one to handle criminal matters and the other civil – to manage the office’s strategy for combatting the deadly opioid epidemic in the Southern District of California.

The criminal coordinator, Linda Frakes, will focus on stopping the illegal importation of heroin, fentanyl and fentanyl analogues as well as targeting dark web vendors who distribute illicit opioids. The civil coordinator, Dylan Aste, will focus on the unlawful prescribing and illegal diversion of these highly addictive drugs.

“This multifaceted approach to enforcing our drug laws will save lives by keeping drugs off our streets and help prevent Americans from becoming addicted to prescription drugs,” Braverman said. “The ongoing opioid epidemic in our district is destroying lives and communities and I’m committed to combatting this crisis with every available asset.”

Attorney General Jeff Sessions issued a directive to all U.S. Attorneys to designate an Opioid Coordinator to work closely with prosecutors, and with other federal, state, tribal, and local law enforcement to coordinate and optimize federal opioid prosecutions in every district.

Braverman took the unique approach of adding an opioid coordinator for civil as well as criminal matters.

As a part of the U.S. Attorney’s strategy to combat the opioid epidemic, the newly designated Opioid Coordinators will make prosecution of all prescription opioids, heroin and fentanyl a top priority, including civil cases involving illegal diversion and unlawful prescribing of these drugs.

Frakes, a 27-year veteran who also serves as the third-highest-ranking prosecutor in the office, was previously supervisor of the Criminal Enterprises section. Her job involved overseeing prosecutions of transnational criminal organizations, including major Mexican drug cartels.

“Our strategy is to hit the opioid crisis hard with every tool we have - from prevention, education and treatment to enforcement,” Frakes said. “We will investigate and prosecute criminals who import fentanyl, distribute fentanyl, or cause death resulting from fentanyl distribution.  If you possess chemicals intending to illegally manufacture fentanyl, you will be prosecuted. Our law enforcement partners are fighting alongside our prosecutors to investigate criminal organizations, here and abroad, who traffic in fentanyl. We will use our federal resources to bring you to justice.”  

Aste, a civil litigator in the U.S. Attorney’s Office, specializes in investigating and prosecuting allegations of fraud against the United States.  He has recovered over $11 million on behalf of the United States.

“Opioid addiction often begins with overprescribing by health care providers and illegal dispensing by pharmacies, and this needs to stop,” Aste said. “I will use the full force of the law to prosecute the prescribers and pharmacies that are contributing to the opioid epidemic.”

Aste has managed several complex opioid-related investigations.  He recently settled two cases involving pharmacies. Medical Center Pharmacy paid $750,000 to resolve allegations under the Controlled Substances Act that included diversion of a significant amount of oxycodone and hydrocodone, failure to control the pharmacies’ inventory of controlled substances, and failure to maintain required records of the pharmacies’ distribution of controlled substances. Sixth Avenue Pharmacy in downtown San Diego paid $147,500 to resolve similar allegations.

Opioids are drugs that include illegally obtained heroin and fentanyl and pain relievers available legally by prescription, such as fentanyl, oxycodone (OxyContin), hydrocodone (Vicodin), codeine, morphine, etc. Opioid pain relievers are generally safe when taken for a short time as prescribed by a doctor, but because they produce euphoria, they can be misused. Regular use—even as prescribed by a doctor—can lead to dependence and, when misused, opioid pain relievers can lead to addiction, overdose incidents and deaths.

Opioids have become a significant and growing problem in this district and throughout the nation. In FY 2017, fentanyl seizures at the California ports of entry increased 266 percent in just one year – from 260 kilograms in FY 2016 to 952.

In April 2017, the U.S. Attorney’s Office and its law enforcement partners created a local Fentanyl Working Group. This multi-dimensional group includes local, state and federal investigative agencies, toxicologists, the Medical Examiner’s Office, DEA Lab chemists and first responders, plus local, county and federal prosecutors.

The Fentanyl Working Group has held two educational Fentanyl Forums, one in June of 2017 and one in November 2017. More than 200 local and federal law enforcement officers attended each meeting where they learned about the dangers of encountering fentanyl in the field; the local smuggling trends from Mexico and China to the U.S.; parcel interdiction cases, prosecution of overdose cases in state and federal courts; and prosecution collaboration with our office and that of the District Attorney.

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Assistant U.S. Attorney Nicholas W. Pilchak and Andrew J. Galvin (619) 546-9709 and (619) 546-9721

NEWS RELEASE SUMMARY – February 8, 2018

SAN DIEGO – A father and son fraud team that won over $4 million of federal contracts using false financial statements and other lies pleaded guilty in federal court today.  The father—a long-time self-described government contracting consultant—also admitted to stealing over a half million dollars from his consulting clients. 

At a hearing today before U.S. Magistrate Judge Barbara Lynn Major, Joseph Glenn Osborne, Sr., 68, pleaded guilty to wire fraud and participating in a wire fraud conspiracy with his son, Joseph Glenn Osborne, II, 31.  Osborne, II pleaded guilty to falsely making a writing to obtain money from the United States. 

In his plea agreement, Osborne, Sr. admitted that he stole $588,489 from three different small businesses that retained him as a government contracting consultant.  According to court documents and his admissions, Osborne, Sr. promised to represent the victims in obtaining and fulfilling contracts with the U.S. Department of Agriculture (USDA).  Instead, he used his position as the sole holder of their web passwords to change their banking information in the online federal system controlling where their contract payments would be sent.  When USDA paid on his clients’ contracts, the money was diverted to Osborne, Sr. instead of the victims. 

Osborne, Sr. also admitted to lying to his clients when they questioned the missing payments.  For example, when one client repeatedly pressed him to attend a conference call to explain the missing money and passwords, Osborne, Sr. repeatedly told the client he couldn’t take the client’s calls because he had been seated on a state court jury for a multiple murder trial.  In fact, according to court filings, Osborne, Sr. has never reported for jury duty. 

According to the plea agreement, Osborne, Sr. used a portion of the stolen money to put a down payment on a $2.7 million mansion in Rancho Santa Fe, California.  Osborne, Sr. forged further emails to conceal the source of the money by falsely claiming that it was an early retirement withdrawal from a benefits account at an agency where he had never worked.

In 2013, after Osborne, Sr. was terminated by his clients, the Osbornes agreed to submit fraudulent financial statements to qualify Osborne, II’s new business—Worldwide Connect LLC (WWC)—as an approved USDA contractor.  As set out in their guilty pleas, the Osbornes recruited Osborne, II’s friend and bookkeeper to prepare false financial statements which substantially overstated WWC’s financial health.  For example, the statements fraudulently converted WWC’s 2013 year-end cash position from a $5,546 deficit to a $37,954 surplus. 

The Osbornes also admitted to falsely certifying to the USDA that none of WWC’s principals was suspended or debarred from federal contracting.  In fact, according to documents filed in the case, Osborne, Sr. was suspended and debarred from November 2013 to October 2016 for conduct associated with his prior business, Global Health & Safety.

As a result of these fraudulent submissions, WWC was approved for federal contracting and won over $4 million of USDA food supply contracts.  Four of the five contracts were terminated for contractor default, after WWC failed to deliver over 100,000 cases of fruit juice and raisins to community food banks and lunch programs.  The Osbornes admitted that WWC caused its suppliers and financing company over $1.5 million in losses.  Meanwhile, as set out in the plea agreements and court filings, the Osbornes paid themselves approximately $285,245 of WWC funds in little more than a year.  They also used other company money for personal expenses—including almost $10,000 of nightclub charges, luxury hotel stays, and over $9,000 of new flooring in Osborne, Sr.’s personal residence. 

After their contracts were terminated, the plea documents explain that the Osbornes applied to the Small Business Administration (SBA) to be readmitted to federal contracting.  As part of that application, Osborne II misstated Osborne, Sr.’s military history, telling the SBA he was a retired colonel in the Marine Corps when in fact Osborne, Sr. had retired as a first lieutenant.  Osborne II also supplied a variety of falsified tax returns to the SBA for himself and WWC, including an altered (signed) tax return that converted his real $14,870 tax liability into a fake $5,427 tax overpayment. 

In addition to pleading guilty, each defendant agreed to pay restitution to their victims in the amounts of approximately $1.7 million for Osborne, Sr. and $1.5 million for Osborne II.    

A sentencing hearing for both defendants is scheduled for May 7, 2018 at 9:00 a.m. before Judge Roger T. Benitez.

“Businesspeople who lie, cheat and steal have no place in federal contracting systems funded with American tax dollars,” said U.S. Attorney Adam L. Braverman. “We will be sure that white collar criminals manipulating the system from behind the scenes are held accountable.” 

Special Agent-in-Charge Lori Chan, United States Department of Agriculture (USDA), Office of Inspector General (OIG), Western Region, stated, “The USDA OIG has the responsibility for protecting the integrity of the Agriculture Marketing Service, Commodity Procurement Program.  OIG conducts investigations in each region of the U.S. to deter and uncover criminal activity that undermines the Commodity Procurement Program.  Contractors who engage in financial fraud exploit the public’s trust.  The OIG at USDA works to ensure the integrity of USDA programs.”

FBI Special Agent in Charge John Brown commented, “This comprehensive investigation revealed a continued pattern of theft, deceit, and fraud—all for personal greed and self-promotion.  Working closely with our law enforcement partners, the FBI will continue to pursue and bring to justice those who seek to perpetrate these fraudulent financial schemes and take advantage of victim clients, the federal contracting process, and the American tax payers."

This case was investigated by the U.S. Department of Agriculture, Office of Inspector General, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Nicholas W. Pilchak and Andrew J. Galvin.

DEFENDANT                                                                   Case Number 16CR2546-BEN                  

Joseph Glenn Osborne, Sr.                       Age: 68                                               Carlsbad, California

Joseph Glenn Osborne, II                         Age: 31                                               Carlsbad, California                      

SUMMARY OF CHARGES

Wire Fraud, in violation of Title 18 U.S.C. § 1343; term of custody including 20 years in prison, $250,000 fine, 3 years of supervised release, and mandatory restitution. 

Wire Fraud Conspiracy, in violation of Title 18 U.S.C. § 1349; term of custody including 20 years in prison, $250,000 fine, and 3 years of supervised release, and mandatory restitution. 

Falsely Making a Writing to Obtain Money From the United States, in violation of Title 18 U.S.C. § 495; term of custody including 10 years in prison, $250,000 fine, 3 years of supervised release, and mandatory restitution. 

AGENCIES

U.S. Department of Agriculture, Office of Inspector General

Federal Bureau of Investigation

 

 

Rabobank National Association (Rabobank), a Roseville, California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., appeared today before U.S. Magistrate Judge Jill L. Burkhardt and pleaded guilty to a felony conspiracy charge for impairing, impeding and obstructing its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (the OCC) by concealing deficiencies in its anti-money laundering (AML) program and for obstructing the OCC’s examination of Rabobank.  Rabobank will forfeit $368,701,259 as a result of allowing illicit funds to be processed through the bank without adequate Bank Secrecy Act (BSA) or AML review. 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Adam L. Braverman for the Southern District of California, Special Agent in Charge Dave Shaw of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Diego and Special Agent in Charge R. Damon Rowe of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

At today’s hearing, Rabobank pleaded guilty to conspiracy to defraud the United States and to corruptly obstruct an examination of a financial institution. In pleading guilty, Rabobank admitted to conspiring with several former executives to defraud the United States by unlawfully impeding the OCC’s ability to regulate the bank, and to obstruct an examination by the OCC of its operations throughout California, including its Calexico and Tecate bank branches.  Rabobank admitted that its deficient AML program allowed hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank branches in Imperial County, and transferred via wire transfers, checks, and cash transactions, without proper notification to federal regulators as required by law.  Knowing these failures, during the OCC’s 2012 examination of Rabobank’s BSA/AML compliance program, Rabobank executives actively sought to hide and minimize the deficiencies in its AML program in an effort to deceive the regulators as to its true state in hopes of avoiding regulatory sanctions that had previously been imposed on Rabobank in 2006 and 2008 for nearly identical failures.

Rabobank’s guilty plea comes less than two months after a former Rabobank vice president, George Martin, entered into a deferred prosecution agreement with the United States for his role in aiding and abetting Rabobank’s failure to maintain an AML program that met BSA requirements. Martin admitted his conduct in federal court in San Diego on Dec. 14, 2017.  As part of its guilty plea, Rabobank agreed to cooperate with the United States’ continuing investigation.           

“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organized crime, and money laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering program,” said Acting Assistant Attorney General Cronan.  “Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies.   The integrity of our financial system depends on prompt reporting by banks and other financial institutions of suspicious, potentially criminal transactions, and on these entities’ truthfulness and transparency with their regulators.  Rabobank’s guilty plea today and forfeiture of more than $360 million is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators.”

“Rabobank had an obligation to shine light on suspected drug traffickers, money launderers and organized crime,” said U.S. Attorney Braverman. “Instead, this bank deliberately allowed hundreds of millions of dollars of suspicious cash transactions and wire transfers to flow through its branches and took measures to hide this activity from regulators. We will vigorously protect the integrity of the banking system, and we will not allow the financial institutions in our communities to play any role in facilitating international money laundering or financing transnational criminal organizations.”

“It is the responsibility of Homeland Security Investigations to monitor and investigate activity which exploits the global infrastructure, to include financial systems,” said Special Agent in Charge Shaw.  “This complex investigation revealed, and Rabobank admits, that Rabobank was aware of the extreme risk that it was processing hundreds of millions of dollars related to transnational crime and international money laundering – activity which plagues the Southwest Border.  This plea and significant forfeiture send a strong message to financial institutions that this activity will not be tolerated.”

“Today, Rabobank is being held accountable for its illegal actions involving the movement of more than $360 million through the U.S. financial system on behalf of high risk customers,” said Special Agent in Charge Rowe.  “In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law and abide by our anti-money laundering regulations.  The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations.”

The BSA requires financial institutions to implement and maintain an AML compliance program reasonably designed, among other things: (i) to detect suspicious activity indicative of money laundering and other crimes and (ii) to assure and monitor compliance with the BSA’s recordkeeping and reporting requirements, including to report to the U.S. Department of the Treasury any suspicious transactions (through the filing “suspicious activity reports” or “SARs”) indicative of a possible violation of the law.  In its plea agreement, Rabobank admitted knowing that between 2009 and 2012 its BSA/AML program failed in significant ways.  Some of these BSA/AML program failures resulted from policies and procedures at Rabobank that precluded and suppressed investigations into suspicious transactions that occurred at its branches, by its accountholders, or by individuals conducting transactions on behalf of its accountholders that had various indications of being involved in, derived from, or promoting illegal conduct.

According to court documents, Rabobank received regular alerts of transactions by “High-Risk” customers, or through accounts deemed to be “High-Risk,” and that had been the subject of prior SARs filed by Rabobank.  These High-Risk customers and accounts included those controlled and managed by Mexican businesses, nonresident aliens, and U.S.-based accountholders who transacted hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, into and through Rabobank accounts. 

According to court documents, Rabobank also created and implemented policies and procedures to prevent adequate investigations into these suspicious transactions, customers, and accounts.  Among those policies and procedures was Rabobank’s “Verified List” – a policy that effectively resulted in Rabobank executing an end-run the BSA/AML and SAR requirements.  In particular, Rabobank instructed its employees that if a customer was on the “Verified List,” no further review of that customer’s transactions was necessary -- even if the transactions generated an internal alert, or the customer’s activity had changed dramatically from when it was “verified.”  Rabobank’s BSA/AML staff were further instructed to aggressively increase the number of bank accounts on the Verified List, as evidenced by the fact that in 2009, Rabobank had less than 10 “verified” customers, but by 2012, as a result of its defective BSA/AML policies and procedures, it had more than 1,000 “verified” customers.

Additionally, Rabobank admitted failing to monitor and conduct adequate investigations into these transactions and submit SARs to the Financial Crimes Enforcement Network (FinCEN), as required by the BSA.  Rabobank’s border branches, including those located in Calexico and Tecate in Imperial County, California, were heavily dependent on cash deposits from Mexico.  Rabobank knew that millions of dollars in cash deposits at these branches were likely tied to illicit conduct.  In particular, the Calexico branch, located about two blocks from the U.S.-Mexico border, was the “highest performing” branch in the Imperial Valley region due to the cash deposits from Mexico.  Throughout the relevant time period, Rabobank continued this practice of soliciting cash-intensive customers from Mexico and elsewhere, all the while employing the foregoing inadequate BSA/AML policies and procedures to address the obvious, known “High Risks” associated with these accounts, transactions, and transactors.

When the OCC began conducting its periodic examination of Rabobank in 2012, Rabobank, acting through three of its executives, agreed to, among other things, knowingly obstruct the OCC’s examination.  Rabobank responded to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program.  Rabobank also made false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant, which detailed the deficiencies and resulting ineffectiveness of Rabobank’s BSA/AML program. 

To further conceal the inadequate nature of its BSA/AML program and to avoid “others contradicting our findings” and statements to the OCC, Rabobank demoted or terminated two RNA employees who were raising questions about the adequacy of Rabobank’s BSA/AML program.

The investigation was conducted by HSI, IRS-CI, and the Financial Investigations and Border Crimes Task Force (the FIBC), a multiagency Task Force based in San Diego and Imperial Counties, and funded by the Treasury Executive Office of Asset Forfeiture (TEOAF).  The investigation occurred in parallel with regulatory investigations by the OCC, Office of General Counsel, and FinCEN, Enforcement Division.  The case is being prosecuted by Trial Attorneys Kevin G. Mosley and Maria Vento of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher and David J. Rawls from the Southern District of California. 

# # #

Assistant U.S. Attorneys Daniel C. Silva (619) 546-9713, Mark W. Pletcher (619) 546-9714, and David J. Rawls (619) 546-7966

NEWS RELEASE SUMMARY – February 7, 2018

SAN DIEGO – Rabobank National Association, a California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., pleaded guilty in federal court today to a felony conspiracy charge and agreed to forfeit $368,701,259 – the largest financial penalty in the Southern District of California – for obstructing regulators and hiding deficiencies in its anti-money laundering program.

At today’s hearing before U.S. Magistrate Judge Jill L. Burkhardt, Rabobank admitted to conspiring with several former executives to defraud the United States by unlawfully impeding an examination of its operations throughout California, including its Calexico and Tecate bank branches, by its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (OCC).

Rabobank admitted that its deficient anti-money laundering program resulted in hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank branches in Imperial County, and transferred via wire transfers, checks and cash transactions, without notifying federal regulators as required by law. And when the OCC was on the verge of discovering such grave deficiencies in 2013, Rabobank executives actively sought to deceive the regulators as to the true state of its operations, in the hope of avoiding regulatory sanctions that had previously been imposed on Rabobank in 2006 and 2008 for nearly identical failures.

According to the plea agreement, Rabobank admitted it was aware that the suspicious transactions made by certain customers were indicative of international narcotics trafficking, organized crime and money laundering. Despite this risk, the bank solicited businesses and individuals conducting these transactions, and failed to adequately monitor and conduct adequate investigations into these suspicious transactions.

Rabobank’s guilty plea comes less than two months after a former Rabobank vice president, George Martin, entered into a deferred prosecution agreement with the United States for his role in aiding and abetting Rabobank’s failure to maintain an anti-money laundering program that met Bank Secrecy Act requirements. Martin admitted his conduct in federal court in San Diego on Dec. 14, 2017, and is cooperating with the continuing investigation. As part of its guilty plea, Rabobank also agreed to cooperate with the United States’ continuing investigation of additional criminal conduct.

“Rabobank had an obligation to shine light on suspected drug traffickers, money launderers and organized crime,” said U.S. Attorney Adam L. Braverman. “Instead, this bank deliberately allowed hundreds of millions of dollars of suspicious cash transactions and wire transfers to flow through its branches and took measures to hide this activity from regulators. We will vigorously protect the integrity of the banking system, and we will not allow the financial institutions in our communities to play any role in facilitating international money laundering or financing transnational criminal organizations.”

“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organized crime, and money laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering program,” said Acting Assistant Attorney General John P. Cronan. “Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies.  The integrity of our financial system depends on prompt reporting by banks and other financial institutions of suspicious, potentially criminal transactions, and on these entities’ truthfulness and transparency with their regulators.  Rabobank’s guilty plea today and forfeiture of more than $360 million is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators.”

“It is the responsibility of Homeland Security Investigations (HSI) to monitor and investigate activity which exploits the global infrastructure, to include financial systems. This complex investigation revealed, and Rabobank admits, that Rabobank was aware of the extreme risk that it was processing hundreds of millions of dollars related to transnational crime and international money laundering – activity which plagues the Southwest Border,” said Dave Shaw, Special Agent in Charge for HSI in San Diego.  “This plea and significant forfeiture sends a strong message to financial institutions that this activity will not be tolerated.”

“Today, Rabobank is being held accountable for its illegal actions involving the movement of more than $360 million through the U.S. financial system on behalf of high risk customers,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe.  “In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law and abide by our anti-money laundering regulations. The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations.”

The Bank Secrecy Act (“BSA”), located at Title 31 of the United States Code, requires financial institutions to implement and maintain an anti-money laundering compliance program (“BSA/AML program”) reasonably designed: (i) to detect suspicious activity indicative of money laundering and other crimes and (ii) to assure and monitor compliance with the BSA’s recordkeeping and reporting requirements, including to report to the Department of the Treasury any suspicious transactions (through the filing of “suspicious activity reports” or  “SARs”) indicative of a possible violation of the law.  In its plea agreement, Rabobank admitted knowing of significant BSA/AML program failures between 2009 and 2012. Some of these failures were caused by Rabobank’s policies and procedures that suppressed any investigation into suspicious transactions that occurred at its branches, by its accountholders, or by individuals conducting transactions on behalf of its accountholders that had all the indications of being involved in, derived from, or promoting illegal conduct.

According to admissions in its plea agreement, Rabobank received regular alerts of transactions by “High-Risk” customers, or through accounts deemed to be “High-Risk,” and that had been the subject of prior SARs filed by Rabobank.  These High-Risk customers and accounts included those controlled and managed by Mexican businesses, nonresident aliens and U.S.-based accountholders who transacted hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, into and through Rabobank accounts.  

Rabobank also admitted in its plea agreement to creating and implementing policies and procedures to prevent adequate investigations into these suspicious transactions, customers, and accounts.  Among those policies and procedures, Rabobank came up with the “Verified List” – a tool that effectively allowed Rabobank to execute an end-run the BSA/AML and SAR requirements.  Rabobank instructed its employees that if a customer was on the “Verified List,” no further review of that customer’s transactions was necessary -- even if the transactions generated an internal alert, or the customer’s activity had changed dramatically from when it was “verified.”  Rabobank’s BSA/AML staff were further instructed to aggressively increase the number of bank accounts on the Verified List.  In 2009, Rabobank had less than ten “verified” customers; by 2012, as a result of Rabobank’s defective BSA/AML policies and procedures, it had more than 1,000 “verified” customers.

Additionally, Rabobank admitted failing to monitor and conduct adequate investigations into these transactions and submit SARs to the Financial Crimes Enforcement Network (“FinCEN”), as required by the BSA.  Rabobank’s border branches, including those located in Calexico and Tecate in Imperial County, were heavily dependent on cash deposits from Mexico.  Rabobank knew that millions of dollars in cash deposits at these branches were likely tied to illicit conduct.  In particular, the Calexico branch, located about two blocks from the U.S.-Mexico border, was the “highest performing” branch in the Imperial Valley region due to the abundance of cash derived from Mexico.  Throughout the time period, Rabobank continued this practice of soliciting cash-intensive customers from Mexico and elsewhere, all the while employing the foregoing inadequate BSA/AML policies and procedures to address the obvious, known “High Risks” associated with these accounts, transactions, and transactors.

When the OCC began conducting its periodic examination of Rabobank in 2012, Rabobank, acting through three of its executives, agreed to, among other things, knowingly obstruct the OCC’s examination.  Rabobank responded to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program.  Rabobank made false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant, which detailed the state of disrepair and resulting ineffectiveness of Rabobank’s BSA/AML program. 

To further conceal the inadequate nature of its BSA/AML program and to avoid “others contradicting our findings” and statements to the OCC, Rabobank demoted or terminated two RNA employees who were raising questions about the adequacy of Rabobank’s BSA/AML program.

The case is being prosecuted by Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher, and David J. Rawls from the Southern District of California, and Trial Attorneys Kevin G. Mosley and Maria Vento of the Criminal Division’s Money Laundering and Asset Recovery Section.  The investigation team included HSI, IRS, and the Financial Investigations and Border Crimes Task Force (the “FIBC”), a multiagency Task Force based in San Diego and Imperial Counties, and funded by the Treasury Executive Office of Asset Forfeiture (“TEOAF”).  The investigation occurred in parallel with regulatory investigations by the OCC, Office of General Counsel, and FinCEN, Enforcement Division.

DEFENDANT                                  

RABOBANK, NATIONAL ASSOCIATION

Roseville, California

SUMMARY OF CHARGES

Conspiracy to Defraud the United States, and to Corruptly Obstruct an Examination of a Financial Institution – Title 18, United States Code, Section 371

Maximum penalties: $500,000 fine; a mandatory special assessment of $400; and a term of probation of at least one year, but not more than five years.

AGENCIES

Homeland Security Investigations

Internal Revenue Service – Criminal Investigation

TEOAF’s Financial Investigations and Border Crimes Task Force

 

 

Assistant U. S. Attorneys Michael G. Wheat (619) 546-8437, Alessandra P. Serano (619) 546-8104, Jennifer E. McCollough  (619) 546-8773

NEWS RELEASE SUMMARY – February 2, 2018

SAN DIEGO – Martin Rene Duran, a former supervisory United States Border Patrol Agent, was convicted by a federal jury today of seven counts of illegal transportation of firearms and one count of possession of a short-barreled rifle following a three-day trial.

According to evidence presented at trial, Duran purchased seven firearms in Arizona in 2011, 2013 and 2014.  Duran made these purchases using an Arizona driver’s license with an address where he never lived and claimed Arizona residency even though he resided in California.  At the time of the execution of a federal search warrant in October 2015, Duran was in possession of multiple firearms that were illegal in California and one short-barreled rifle. 

Duran is scheduled to appear before Senior U.S. District Judge Marilyn L. Huff on April 30, 2018 at 9:00 a.m. for sentencing.

“Federal law enforcement officers are not above the law,” said U.S. Attorney Adam L. Braverman. “All citizens are required to abide by the laws of the United States.”

“This decision affirms the efforts the Department of Homeland Security makes to hold its personnel to the highest standard and shows it will not tolerate malfeasance which tarnishes the hard work performed by employees on a daily basis,” said Jeffrey Gilgallon, Special Agent in Charge, ICE Office of Professional Responsibility.

“Bringing a case against another federal agent is never pleasant, but we hold public safety and a commitment to justice above all,” said Bill McMullan, Special Agent in Charge of the ATF Los Angeles Field Division.  “It is ATF’s mission to quell firearm trafficking and when we see those engaged in illegal firearms activity we act on it.”

DEFENDANT                                                           Case Number 15cr2817-H                                       

Martin Rene Duran                 Age: 48                       Chula Vista, CA

SUMMARY OF CHARGES

Title 18, United States Code, Section 922(a)(3) – Illegal Transportation of Firearms: Maximum Penalties: 5 years’ incarceration, a fine of $250,000, three years of supervised release.

Title 26, United States Code, Sections 5861 and 5871 – Possession of Unregistered Firearm: Maximum Penalties: 10 years’ incarceration, a fine of $250,000, three years of supervised release.

AGENCIES

Bureau of Alcohol, Tobacco, Firearms and Explosives

Immigration and Customs Enforcement – Office of Professional Responsibility

Department of Homeland Security – Office of Inspector General

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

 

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – January 30, 2018

 

SAN DIEGO – Former U.S. Navy Commander Troy Amundson pleaded guilty today to federal bribery conspiracy charges.  Amundson is the latest U.S. Navy official to plead guilty in the wide-ranging corruption and fraud investigation involving foreign defense contractor Leonard Glenn Francis and his Singapore-based company, Glenn Defense Marine Asia (GDMA). 

 

Amundson, 50, of Ramsey, Minnesota, pleaded guilty to one count of conspiracy to commit bribery, admitting that he conspired with Francis and others to receive things of value, including entertainment expenses and the services of prostitutes, in exchange for taking official acts for the benefit of GDMA and violating his official duties to the United States Navy. Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving “scores” of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and gifts – from cash, prostitutes and luxury travel to Cuban cigars, Kobe beef and Spanish suckling pigs.

 

According to admissions made as part of his guilty plea, which was entered today before U.S. Magistrate Judge William V. Gallo of the Southern District of California, from May 2005 to May 2013, Amundson served as the officer responsible for coordinating the U.S. Navy’s joint military exercises with its foreign navy counterparts. As part of his duties, Amundson was responsible for building and maintaining cooperative relationships with the U.S. Navy’s foreign navy exercise partners.

 

Amundson admitted that from September 2012 through October 2013, Francis paid for dinner, drinks, transportation, other entertainment expenses, and the services of prostitutes for Amundson and other U.S. Navy officers.  In one instance, Amundson wrote to Francis from a private e-mail account, arranging to provide Francis with internal, proprietary U.S. Navy information:  “Handoff?... [M]y [friend], your program is awesome.  I [Amundson] am a small dog just trying to get a bone… however I am very happy with my small program.  I still need five minutes to pass some data when we can meet up.  Cannot print.”  That night, Francis arranged the services of several prostitutes from Mongolia for Amundson. 

 

Having passed confidential, proprietary US Navy information to Francis and having taken numerous other actions in favor of GDMA and in violation of his official duties, Amundson was interviewed by federal criminal investigators in October 2013. As part of his plea agreement, Amundson admitted that he deleted all of his private e-mail account correspondence with Francis following his interview with law enforcement agents earlier that same day.

 

 “Amundson deliberately, methodically, and repeatedly traded his public office for entertainment expenses and the services of prostitutes, and in so doing, aligned himself with a foreign defense contractor over his Navy, his colleagues and his country.” said U.S. Attorney Adam Braverman. “We are pressing forward in this investigation until we are certain that all involved have been held accountable.”

 

Sentencing is scheduled for April 27, 2018 at 9 a.m. before U.S. District Judge Janis Sammartino.

 

So far, 20 of 29 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty.

 

The case is being prosecuted by Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Fraud Section of the Justice Department’s Criminal Division.                   

 

DEFENDANT                                                           Case Number: 18CR0468-JLS                               

 

Commander Troy Amundson                                     Age 50           Ramsey, Minnesota

 

SUMMARY OF CHARGES

 

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

Maximum Penalty: 5 years in prison, a $250,000 fine

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

 

Assistant U. S. Attorneys Benjamin J. Katz and Mark W. Pletcher (619) 546-9604 and (619) 546-9714

 

NEWS RELEASE SUMMARY – January 26, 2018

 

SAN DIEGO – Jimmy Collins and Ashley Collins, a married couple living in Cleveland, Tennessee were arraigned in federal court today on charges that they operated a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members, retirees, and their dependents – out of more than $65 million in pharmacy reimbursement funds.

According to the indictment, Jimmy and Ashley Collins conspired with CFK, Inc., the owner of The Medicine Shoppe, a pharmacy based in Bountiful, Utah, to submit fraudulent claims for compounded medications mailed mainly to active duty Marines and Sailors based in the Southern District of California.

“San Diego is a military town. This indictment sends a message to those who seek to defraud the Department of Defense out of the dollars meant to care for our military members and their families:  Fraudsters will be held accountable here,” said U.S. Attorney Adam L. Braverman.

 

“The theft of military health care dollars directly ‎harms the U.S. Government and our warfighters and will not be tolerated,” said Michael Mentavlos, Special Agent in Charge, Southwest Field Office, Defense Criminal Investigative Service. “Today's indictment demonstrates that DCIS, in partnership with NCIS, IRS, and the FBI, will aggressively pursue those who seek to steal Department of Defense resources.”

 

“Fraud is criminal abuse of the system that siphons resources away from the American warfighter, said Todd Battaglia, Special Agent in Charge of the NCIS Field Office at Camp Pendleton. “NCIS will continue to work with our law enforcement partners to hold responsible those who would defraud our nation to line their own pockets.”

 

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.

 

According to the indictment, between October 2014 and July 2015, Jimmy and Ashley Collins operated a network of recruiters working to induce TRICARE beneficiaries to obtain compounded medications, which cost an average of more than $14,500 per medication per month, from The Medicine Shoppe. To induce TRICARE beneficiaries to sign up to receive these compounded medications, recruiters working for the Collinses were told to inform potential beneficiaries that they would be paid to evaluate the medications as part of an ongoing medical study.  In reality, no study was taking place, the indictment said.

 

Once a recruiter convinced a TRICARE beneficiary to sign up to receive the compounded medications, the straw beneficiary’s information was sent to Choice MD, a Tennessee medical clinic co-owned and operated by the Collinses.  Doctors employed by the Collinses at Choice MD then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person.  Once signed by the doctors, these prescriptions were not given to the straw beneficiaries, but sent directly to The Medicine Shoppe or related pharmacies, which filled the prescriptions and billed TRICARE at exorbitant prices.

 

Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – doctors working for the Collinses authorized 4,442 prescriptions that were filled at The Medicine Shoppe.  The Medicine Shoppe billed TRICARE $65,679,512 for these prescriptions.

 

The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on the number of prescriptions referred by the Collinses recruiter network.  Between February and July 2015, these kickback payments to the Collinses totaled at least $45.7 million dollars.  The Collinses, in turn, paid kickbacks to the recruiters working as part of their network.  Six of these kickback payments, including one for more than $1.4 million, form the basis for the six counts of Payment of Illegal Remuneration brought against Jimmy and Ashley Collins in the indictment.

 

The indictment also includes a lengthy list of forfeitable funds, property, and items purchased by the Collinses with the proceeds of the scheme.  Included among these items is an 82-foot yacht, multiple luxury vehicles (including two Aston-Martins), dozens of pieces of farm equipment and tractor-trailer trucks, and three pieces of Tennessee real estate.

 

Jimmy and Ashley Collins were arraigned today in the Eastern District of Tennessee.  Their next court appearance is on February 2, 2018 in San Diego, before Magistrate Judge William J. Gallo.

 

DEFENDANTS                                            Case Number 18-cr-0432-JLS                                            

Jimmy D. Collins                                            Age: 53                                   Cleveland, TN

Ashley Collins                                                 Age: 31                                   Cleveland, TN

CFK, Inc.                                                                                                        Utah based corporation

 

SUMMARY OF CHARGES

 

Count 1:

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

Maximum penalty: 10 years’ imprisonment and fine of higher of $250,000 or double loss amount

 

Counts 2-7:

Illegal Payment of Remuneration – Title 42 U.S.C. § 1320(a)-7b(b)(2)

Maximum penalty (per count): 5 years’ imprisonment; $250,000 fine

 

AGENCY

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

IRS Criminal Investigation Division, Gulfport, MS

Federal Bureau of Investigation - Jackson, MS Field Office

 

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

Assistant U.S. Attorney Matthew J. Sutton

 (619) 546-8941

 

NEWS RELEASE SUMMARY – January 25, 2018

 

SAN DIEGO – Major Mexican drug cartel leader Sajid Emilio Quintero Navidad, aka Cadete, pleaded guilty in federal court today, following his arrest by United States law enforcement at the San Ysidro Port of Entry on October 11, 2017.

 

Quintero Navidad, 36, pleaded guilty to all charges in an indictment returned by a federal grand jury in San Diego on September 22, 2017, charging him with Conspiracy to Distribute Controlled Substances Intended for Importation, Conspiracy to Import Controlled Substances, and Conspiracy to Launder Monetary Instruments. Quintero Navidad is the cousin of fugitive Mexican drug lord Rafael Caro Quintero and the associate of high-ranking Mexican cartel leader Ismael Zambada-Garcia, aka Mayo. He is believed to be one of the highest-ranking Mexican cartel leaders to be arrested in the United States.  

 

In August 2014, the Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Quintero Navidad as a “Special Designated Narcotics Trafficker,” pursuant to the Foreign Narcotics Kingpin Designation Act. As part of that designation, OFAC identified Quintero Navidad as a Mexico-based narcotics trafficker who coordinated the transportation of ton quantities of cocaine from South America through Mexico and onto the United States.

 

In a proceeding today before U.S. District Judge Cathy Ann Bencivengo, Quintero Navidad accepted responsibility for his role as a leader within a drug trafficking organization based in Mexico, acknowledging that he organized the transportation and distribution of hundreds of kilograms of controlled substances, including cocaine and heroin, for importation from Mexico into the United States. Quintero Navidad also admitted to laundering thousands of dollars of U.S. currency, which represented the proceeds of the importation and distribution of drugs within the United States back to Mexico. A sentencing hearing is scheduled for April 20, 2018 at 9 a.m. before Judge Bencivengo.

 

“Quintero Navidad’s guilty plea today sends a clear message to other drug kingpins operating in Mexico. There is no place to hide because our federal team will work tirelessly to hunt you down to face justice in our courts,” said U.S. Attorney Adam L. Braverman. “Our investigation and prosecution of other high-level cartel members is continuing and is having a significant impact on the global operations of the Mexican drug cartels.”

 

“Today’s guilty plea is an example of the great partnership of HSI Calexico and other federal law enforcement agencies, who worked diligently to bring this case to prosecution,” said Dave Shaw, special agent in charge of HSI in San Diego. “HSI will continue to investigate, disrupt, and ultimately dismantle these drug trafficking organizations who continue to engage in violent criminal activity.”

 

“The importance of this plea is twofold: One, drug traffickers will be arrested and prosecuted to the full extent of the law; and two, it sends the message to the other members of this violent drug trafficking organization that they are next,” said DEA San Diego Acting SAC Steve Woodland. “This is a major blow to this international drug trafficking organization and DEA will continue to investigate its members.”

 

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.

 

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

 

U.S. Attorney Braverman praised the outstanding work of the federal team from HSI Calexico/DEA Imperial County in the culmination of this investigation. U.S. Attorney Braverman also thanked U.S. Customs and Border Protection, the U.S. Marshals Service, the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.

 

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

 

DEFENDANT                                                                   Case Number 17CR2976-CAB                  

Sajid Emilio Quintero Navidad, aka Cadete               Age: 36                      Mexico City, Mexico

                       

SUMMARY OF CHARGES

 

Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.

 

Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.

 

Conspiracy to Launder Monetary Instruments, in violation of Title 18 U.S.C. § 1956. Term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release.

 

AGENCIES

 

Homeland Security Investigations

Drug Enforcement Administration

Department of Homeland Security, Joint Task Force – Investigations

Customs and Border Protection, Office of Field Operations

United States Marshals Service

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

Department of Treasury, Office of Foreign Assets Control

Customs and Border Protection, Office of Border Patrol

Immigration and Customs Enforcement, Enforcement and Removal Operations

El Centro Police Department

Brawley Police Department

Imperial County District Attorney’s Office

Imperial Valley, Law Enforcement Coordination Center

 

Scripps Health (Scripps), a health care system based in San Diego, California, has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by charging federal health care programs for physical therapy services that were rendered by therapists who did not have billing privileges for these programs and were not supervised by an authorized provider, the Justice Department announced today.  

 

“Federal health care programs require that services are rendered by authorized providers or under the appropriate supervision of an enrolled physician,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Chad A. Readler.  “These requirements help protect patients from unscrupulous or unqualified medical professionals.  The Department of Justice will continue to ensure that those who knowingly violate these requirements face appropriate consequences.”

 

Medicare and TRICARE limit billing privileges to enrolled providers.  Services from unenrolled providers can be billed as “incident to” the services of an enrolled physician, but only if the physician provided direct supervision.  The United States alleged that Scripps billed Medicare and TRICARE for physical therapy services provided by therapists without billing privileges and without the appropriate supervision by a physician. 

 

“This settlement illustrates the United States Attorney’s Office’s continued commitment to protecting the integrity of the Medicare and TRICARE programs,” said U.S. Attorney Adam L. Braverman.  “Unlawfully obtained payment from taxpayer-funded programs harms the entire health care system.  We will hold accountable all providers who defraud these programs.”

 

“Patients rightly expect qualified medical providers, or at least professionals working under the supervision of authorized providers,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “As charged, these billing practices cheat patients, taxpayers, and the Medicare program.”   

 

The settlement resolves allegations filed in a lawsuit by Suzanne Forrest, a former Scripps employee, under the qui tam provisions of the False Claims Act, which permit private individuals to sue for false claims on behalf of the government and to share in any recovery.  The civil lawsuit was filed in the Southern District of California and is captioned United States ex rel. Forrest v. Scripps Health, Case No. 16-CV-0634.  As part of this settlement, Ms. Forrest will receive $225,000. 

 

“Holding providers accountable protects patients and tax-payer funded health care programs,” said Eric S. Birnbaum, FBI Special Agent in Charge of the San Diego Field Office.  “The FBI will continue to work jointly with its law enforcement partners, utilizing all tools available, to pursue the repayment of monies to federal health care programs such as Medicare and TRICARE.”

 

"I appreciate the Department of Justice and the U.S. Attorney for its untiring efforts in holding health care providers accountable to the American taxpayer and our patients," said Vice Admiral Raquel Bono, director of the Defense Health Agency. "The Department of Justice's efforts continue to safeguard the health care benefit for American 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."

 

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

 

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of California, the Office of Inspector General for the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.    

 

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

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

 

NEWS RELEASE SUMMARY – January 19, 2017

 

SAN DIEGO – Scripps Health (Scripps), a health care system based in San Diego, California, has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by charging federal health care programs for physical therapy services that were rendered by therapists who did not have billing privileges for these programs and were not supervised by an authorized provider, the Justice Department announced today.  

 

“Federal health care programs require that services are rendered by authorized providers or under the appropriate supervision of an enrolled physician to help protect patients from unscrupulous or unqualified medical professionals,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Chad A. Readler. “The Department of Justice will continue to ensure that those who knowingly violate these requirements face appropriate consequences.”

 

Medicare and TRICARE limit billing privileges to enrolled providers. Services from unenrolled providers can be billed as “incident to” the services of an enrolled physician, but only if the physician provided direct supervision. The United States alleged that Scripps billed Medicare and TRICARE for physical therapy services provided by therapists without billing privileges and without the appropriate supervision by a physician. 

 

“This settlement illustrates the United States Attorney’s Office’s continued commitment to protecting the integrity of the Medicare and TRICARE programs,” said U.S. Attorney Adam L. Braverman. “Unlawfully obtained payment from taxpayer-funded programs harms the entire health care system. We will hold accountable all providers who defraud these programs.”

 

“Patients rightly expect qualified medical providers, or at least professionals working under the supervision of authorized providers,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “As charged, these billing practices cheat patients, taxpayers, and the Medicare program.”

 

The settlement resolves allegations filed in a lawsuit by Suzanne Forrest, a former Scripps employee, under the qui tam provisions of the False Claims Act, which permit private individuals to sue for false claims on behalf of the government and to share in any recovery.  The civil lawsuit was filed in the Southern District of California and is captioned United States ex rel. Forrest v. Scripps Health, Case No. 16-CV-0634. As part of this settlement, Ms. Forrest will receive $225,000. 

 

“Holding providers accountable protects patients and tax-payer funded health care programs,” said Eric S. Birnbaum, FBI Special Agent in Charge of the San Diego Field Office.  “The FBI will continue to work jointly with its law enforcement partners, utilizing all tools available, to pursue the repayment of monies to federal health care programs such as Medicare and TRICARE.”

 

“I appreciate the Department of Justice and the U.S. Attorney for their untiring efforts in holding health care providers accountable to the American taxpayer and our patients,” said Vice Admiral Raquel Bono, director of the Defense Health Agency. “The Department of Justice's efforts continue to safeguard the health care benefit for American 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.”

 

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

 

This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California, the Civil Division’s Commercial Litigation Branch of the Department of Justice, the Office of Inspector General for the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.

 

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

Assistant U. S. Attorney Sabrina Feve (619) 546-6786    

 

NEWS RELEASE SUMMARY – January 19, 2018

 

SAN DIEGO – Victor Alejandro Fernandez was sentenced in federal court today to 129 months in custody for his involvement in a conspiracy to steal and misuse mortgage customers’ sensitive personal information. 

 

Fernandez was charged along with Jason Ray Bailey, John Gordon Baden and Joel Nava with conspiracy to commit wire fraud and computer hacking.  Fernandez was also charged with aggravated identity theft.  All four defendants have pleaded guilty. 

 

According to charging and sentencing documents, between 2011 and 2014, Fernandez and his coconspirators were part of a Tijuana-based conspiracy that hacked the computer servers of major U.S. mortgage brokers, stole over 4,200 customers’ mortgage applications, and then used the victims’ social security numbers, addresses, dates of birth and personal information to open unauthorized lines of credit and take over and drain victims’ retirement and brokerage accounts.

 

For example, according to Fernandez’s plea agreement, he identified multiple victims’ brokerage accounts and fraudulently took control of the victims’ accounts by first calling the brokerage companies and providing the victims’ personal identification information, and then changing the victims’ passwords and contact information. Once he and his codefendants gained control of the accounts, members of the conspiracy wired funds from the victims’ brokerage accounts to coconspirators’ U.S. bank accounts in the San Diego and Calexico areas. Several of these wires were over $20,000 and $30,000 each.

 

DEFENDANT                                               Case Number: 14cr0277GPC 

 

Victor Alejandro Fernandez                           Age: 42                       Chula Vista, CA

 

SUMMARY OF CHARGES

 

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

Maximum Penalties: Up to 30 years in prison and $1,000,000 fine.

 

Count 2: Computer Hacking – Title 18, U.S.C., Sections 1030 (a) (4) and (c) (3) (A)

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

 

Count 5:  Aggravated Identity Theft – Title 18, U.S.C., Section 1028A

Maximum Penalties:  24 months’ consecutive sentence

 

INVESTIGATING AGENCIES

 

Federal Bureau of Investigation

 

 

 

 

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

 

NEWS RELEASE SUMMARY –  January 18, 2018

 

SAN DIEGO – Roberto Carlos Sanchez-Loor and Jose Antonio Gomez-Cuzme, both Ecuadorian nationals, pleaded guilty in federal court today to conspiracy to distribute and cause the distribution of approximately 980 kilograms of cocaine, knowing that the cocaine would be unlawfully imported into the United States.

 

Each defendant admitted that they were crew members on board a stateless go-fast vessel (GFV) in international waters approximately 110 nautical miles southwest of the Guatemalan and El Salvadorian border and that they were helping transport the cocaine northward for distribution into the United States.

   

According to court documents, on May 23, 2017, the U.S. Coast Guard (USCG) interdicted the GFV in international waters after a maritime patrol aircraft initially detected the GFV with three persons onboard.   The USCG Cutter Waesche interdicted the GFV.

 

The defendants will appear for sentencing on April 6, 2018 before U.S. District Court Judge Dana M. Sabraw. The remaining defendant, Edwin Cristobal Vera-Solorzano, is set for a motion hearing on January 26, 2018 at 2 p.m.

 

Bales of Cocaine Seized from GFV

Blue GFV containing bales of cocaine

Individual cocaine packages weighing 980 kilograms taken from GFV.

 

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

 

DEFENDANTS                                   Criminal Case No.17CR1656DMS

 

ROBERTO CARLOS SANCHEZ-LOOR                        32 years old      Ecuador

JOSE ANTONION GOMEZ-CUZME                              31 years old      Ecuador

 

SUMMARY OF CHARGES

 

Conspiracy to distribute cocaine intending to unlawfully import into the United States

21 U.S.C. 959, 960 and 963

 

Maximum Penalty: Ten-year mandatory minimum to life; fine of $1 million

 

AGENCIES

 

Homeland Security Investigations (HSI)

U.S. Coast Guard (USCG)

Customs & Border Protection (CBP)

Drug Enforcement Administration (DEA)

 

*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 Nicholas W. Pilchak and Matthew J. Sutton

 (619) 546-9709 and (619) 546-8941

 

NEWS RELEASE SUMMARY – January 18, 2018

 

SAN DIEGO – Daniel Stephen Wray pleaded guilty in federal court today, admitting that he was the leader of an elaborate scheme to steal identities and make and use fraudulent credit cards at multiple San Diego retailers.

 

Wray, 29, pleaded guilty to an indictment returned by a federal grand jury on November 16, 2017, charging him with Conspiracy to Commit Access Device Fraud. As detailed in the plea agreement, indictment, and other publicly filed court documents, Wray recruited multiple co-conspirators to join his ring of credit card fraudsters in late 2016. Wray then provided these individuals with counterfeit access devices—credit cards bearing altered names, but encoded with real credit card numbers for the accounts of unwitting victims—and drove them to San Diego-area stores.

 

Investigators believe that many of the victims’ identities and credit card numbers were stolen after Wray and his co-conspirators installed a skimmer at a La Jolla gas station. A skimmer is a device capable of reading and recording account information, including customer names, account numbers, and personal identification numbers, from credit and debit cards. After creating the fraudulent credit cards with the stolen credit card numbers, Wray and his co-conspirators then used them to purchase tens of thousands of dollars of merchandise from multiple San Diego retailers, including Costco and Smart N Final.

 

In a proceeding today before U.S. Magistrate Judge Andrew G. Schopler, Wray admitted his role as the leader of the fraudulent scheme, acknowledging that he obtained dozens of counterfeit and unauthorized access devices from multiple victims in San Diego County and then used these fraudulent credit cards to make tens of thousands of dollars in purchases, ranging from Apple iPads, luxury wristwatches, gold and silver, and large quantities of liquor and energy drinks from large San Diego retailers. Wray also admitted to being a prior federal felon in that he was previously convicted of illegally possessing 269 counterfeit access devices in 2014. A sentencing hearing is scheduled for May 7, 2018 at 8:30 a.m. before U.S. District Judge John Houston.

 

“Identity theft is one of the fastest growing crimes in the United States,” said U.S. Attorney Adam L. Braverman. “We will vigorously prosecute those who prey on our citizens and steal their identities.”

 

“Today’s change of plea is a reminder that the U.S. Secret Service and its law enforcement partners will actively investigate and pursue prosecution of those who engage in financial fraud and use others’ personal information for their own personal gain,” said United States Secret Service Special Agent in Charge Brian S. Christensen.

 

This case was investigated by the San Diego Regional Fraud Task Force. The Task Force is led by the United States Secret Service, together with multiple state and local partners, including the San Diego Police Department and the San Diego County District Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorneys Nicholas W. Pilchak and Matthew J. Sutton.

 

DEFENDANT                                                                   Case Number 17CR3856-JAH                  

Daniel Stephen Wray                                                        Age: 29                   San Diego, California

                       

SUMMARY OF CHARGES

 

Conspiracy to Commit Access Device Fraud, in violation of Title 18 U.S.C. § 1029; Term of custody including 20 years in prison, $250,000 fine and 3 years supervised release and mandatory restitution.

 

AGENCIES

 

San Diego Regional Fraud Task Force:

- United States Secret Service

- San Diego Police Department

- San Diego District Attorney’s Office

 

 

 

Assistant U. S. Attorney Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968   

 

NEWS RELEASE SUMMARY – January 12, 2018

 

SAN DIEGO – Marchello Dsaun McCain, a convicted violent felon and the brother of Douglas McCain, the first known American who died fighting for the Islamic State of Iraq and al-Sham (ISIS), was sentenced in federal court today to 10 years in prison for his illegal possession of a cache of firearms and body armor and making false statements to federal agents involving international terrorism.

 

In a related case, the United States unsealed a two-count indictment charging Canadian national and former San Diego resident Abdullahi Ahmed Abdullahi with providing, and conspiring with Douglas and other individuals in the United States and Canada to provide, material support to terrorists engaged in violent activities in Syria, that is, a conspiracy to murder, kidnap and maim persons in a foreign country.

On March 9, 2014, Douglas McCain departed the U.S. and traveled to Syria where he joined and fought for ISIS.  Approximately five months later, on or about August 25, 2014, Douglas McCain was killed in Syria fighting a battle against the Free Syrian Army. Following Douglas McCain’s death, Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents interviewed Marchello McCain on several occasions from August 26, 2014 through January 23, 2015, when agents arrested him on federal firearms charges.

 

In January 2016, Marchello McCain, who was previously convicted of two felony crimes of violence in Minnesota involving assault with a firearm, pleaded guilty to five counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon.  Eight months later, in September 2016, he pleaded guilty to making false statements to FBI-JTTF agents concerning his assistance to and knowledge of individuals providing material support (personnel and money) to individuals engaged in violent terrorist activities abroad and ISIS, including Douglas McCain and Abdullahi.

 

As part of his guilty pleas, McCain admitted that he made material false statements to the agents about his knowledge of the purpose of his brothers’ travel abroad and the methods of payment and source of monies to fund such travel. McCain acknowledged that he possessed over nine firearms, which included a stolen firearm and several semi-automatic 9 mm pistols, an AR-15 style semi-automatic rifle and an M1 Carbine .30 caliber semi-automatic rifle with a large capacity magazine. Marchello McCain also admitted that on February 13, 2014, approximately three weeks prior to Douglas McCain’s departure to fight in Syria, Marchello McCain went to a San Diego gun range with his brother and shot firearms, including an AR-15 style semi-automatic rifle and a 12-gauge pump-action shotgun.

 

In imposing sentence, the court found that defendant’s obstructive conduct frustrated, delayed and thwarted the United States’ efforts to uncover the scope and membership of conspiracies to provide material support to terrorists and a foreign terrorist organization, ISIS.

 

“ISIS has brought the war on terror closer to home by directing and inspiring attacks in the U.S. and other countries, thereby putting American lives in danger,” said U.S. Attorney Adam Braverman. “By lying to federal agents, Marchello McCain delayed, frustrated and thwarted an investigation into a group that supplied U.S. and Canadian fighters to ISIS. We are committed to doing whatever it takes to protect American lives here and abroad.”

 

“Counterterrorism investigations are the highest priority investigations conducted by FBI Joint Terrorism Task Forces,” commented FBI Special Agent in Charge Eric S. Birnbaum. “When someone misleads or obstructs counterterrorism investigations, this can adversely affect investigative activity in these important cases. Today's sentence will hold Mr. McCain accountable for his actions and dissuade others from lying to law enforcement agents concerning international terrorism matters.”

 

The defendant’s lies, including his false statements regarding the source and means of the financing of Douglas’ travel were not only intended to prevent the United States from finding out about the involvement of Abdullahi and others, but were also intended to prevent the discovery of his own involvement.

 

As detailed in the United States’ pleadings, the defendant’s involvement included: agreeing to travel to Syria and join his brother in violent jihadist activities; assisting Douglas and others in traveling to Syria to engage in violent jihadist activities by taking Douglas to a gun range to target shoot semi-automatic weapons; depositing cash into his wife’s bank account and letting Douglas use his wife’s credit card to purchase plane tickets to Turkey, a known entry point for foreign fighters seeking to enter Syria, and to make hotel reservations; regularly communicating with Douglas and other individuals regarding the financial and logistical needs of foreign fighters in Syria; wiring $800 to an ISIS operative in Turkey to support Douglas and/or others engaged in violent jihadist activities; and engaging in obstructive conduct to conceal the material support conspiracies.

 

Notwithstanding the obstructive conduct of McCain, the United States continued its investigation of the terrorist activities of Douglas McCain, Abdullahi and others. On March 10, 2017, a federal grand jury in the Southern District of California returned a two-count sealed indictment charging Abdullahi with conspiring to provide, and providing, material support to terrorists.

 

On September 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi is currently detained in Canadian custody without bail, pending an extradition hearing scheduled for May 31, 2018.  On January 3, 2018, the Abdullahi indictment was unsealed.  Abdullahi is also facing charges in Canada for a January 9, 2014 armed robbery of an Edmonton jewelry store.

 

The Abdullahi indictment alleges that from in or about August 2013 through in or about November 2014, Abdullahi conspired with Douglas and other individuals to provide personnel and money to individuals engaged in terrorist activities in Syria, including the killing, kidnapping and maiming of persons. The charged conspiracy alleges the participation and/or assistance of Abdullahi and approximately 14 other individuals and spans four countries, the United States, Canada, Turkey and Syria.

 

In preparation for their travels, Douglas and other members of the conspiracy practiced with firearms in San Diego and Canada. According to the indictment, Abdullahi, Douglas and others agreed to travel to Syria to support and join terrorist fighters engaged in terrorist activity, including the killing, kidnapping and maiming of persons.

 

In order to raise funds to support their efforts to support and join terrorist fighters in Syria, members of the conspiracy encouraged others to commit crimes against the “kuffar” (an Arabic term meaning infidels or non-believers), such as theft. In furtherance of this material support conspiracy, the indictment alleges that on January 9, 2014, prior to the travel of Douglas and another coconspirator, Abdullahi committed an armed robbery of a jewelry store in Edmonton, Alberta, Canada, in order to finance the travel of Douglas and other members of the conspiracy to Syria.  Thereafter, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas – in order to finance the travel of foreign fighters from North America to support and join terrorist fighters engaged in terrorist activities in Syria.

 

Additionally, members of the conspiracy, including Abdullahi, wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting members of the conspiracy fighting and engaging in terrorist activity in Syria, including the killing, kidnapping, an maiming of persons. 

 

The government alleges that because of the efforts of Abdullahi and other coconspirators, beginning in November 2013 through November 2014, five coconspirators, including Douglas McCain, traveled from North America to Syria, via Turkey, and acted as foreign fighters in Syria engaging in terrorist activity in Syria, including the murder of persons.  Douglas McCain was killed in battle fighting for ISIS in August 2014.  The remaining four coconspirators were all killed in Syria in mid-November 2014.

           

DEFENDANT                                               Criminal Case No. 15CR0174-W

 

Marchello Dsaun McCain                               Age 35            San Diego, California            

 

SUMMARY OF CHARGES

 

False Statements Involving International Terrorism – Title 18, U.S.C., Sections 1001(a)(2)

Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)

 

Felon in Possession of Firearms and Ammunition – Title 18, U.S.C., Sections 922(g)(1)

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

 

Felon in Possession of Body Armor by a Violent Felon – Title 18, U.S.C., Sections 931

Maximum penalty: 3 years’ imprisonment and $250,000 fine.

 

DEFENDANT                                               Criminal Case No. 17CR0622-W

 

Abdullahi Ahmed Abdullahi                          Age 33            Edmonton, Alberta, Canada  

 

SUMMARY OF CHARGES

 

Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)

Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)

 

Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)

Maximum penalty: 15 years’ imprisonment and $250,000 fine.

 

INVESTIGATING AGENCIES

 

San Diego Joint Terrorism Task Force

Federal Bureau of Investigation

Federal Air Marshal Service

Department of Homeland Security, Homeland Security Investigations

Department of Homeland Security, U.S. Border Patrol

 

 

Marchello Dsaun McCain, a convicted violent felon and the brother of Douglas McCain, the first known American who died fighting for the Islamic State of Iraq and al-Sham (ISIS), was sentenced in federal court today to 10 years in prison for his illegal possession of a cache of firearms and body armor and making false statements to federal agents involving international terrorism.

 

In a related case, the United States unsealed a two-count indictment charging Canadian national and former San Diego resident Abdullahi Ahmed Abdullahi with providing, and conspiring with Douglas and other individuals in the United States and Canada to provide, material support to terrorists engaged in violent activities in Syria, that is, a conspiracy to murder, kidnap and maim persons in a foreign country.

 

On March 9, 2014, Douglas McCain departed the U.S. and traveled to Syria where he joined and fought for ISIS.  Approximately five months later, on or about Aug. 25, 2014, Douglas McCain was killed in Syria fighting a battle against the Free Syrian Army. Following Douglas McCain’s death, Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents interviewed Marchello McCain on several occasions from Aug. 26, 2014 through Jan. 23, 2015, when agents arrested him on federal firearms charges.

 

In January 2016, Marchello McCain, who was previously convicted of two felony crimes of violence in Minnesota involving assault with a firearm, pleaded guilty to five counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon.  Eight months later, in September 2016, he pleaded guilty to making false statements to FBI-JTTF agents concerning his assistance to and knowledge of individuals providing material support (personnel and money) to individuals engaged in violent terrorist activities abroad and ISIS, including Douglas McCain and Abdullahi.

 

As part of his guilty pleas, McCain admitted that he made material false statements to the agents about his knowledge of the purpose of his brothers’ travel abroad and the methods of payment and source of monies to fund such travel. McCain acknowledged that he possessed over nine firearms, which included a stolen firearm and several semi-automatic 9 mm pistols, an AR-15 style semi-automatic rifle and an M1 Carbine .30 caliber semi-automatic rifle with a large capacity magazine. Marchello McCain also admitted that on Feb. 13, 2014, approximately three weeks prior to Douglas McCain’s departure to fight in Syria, Marchello McCain went to a San Diego gun range with his brother and shot firearms, including an AR-15 style semi-automatic rifle and a 12-gauge pump-action shotgun.

 

In imposing sentence, the court found that defendant’s obstructive conduct frustrated, delayed and thwarted the United States’ efforts to uncover the scope and membership of conspiracies to provide material support to terrorists and a foreign terrorist organization, ISIS.

 

“ISIS has brought the war on terror closer to home by directing and inspiring attacks in the U.S. and other countries, thereby putting Americans lives in danger,” said U.S. Attorney Adam Braverman. “By lying to federal agents, Marchello McCain delayed, frustrated and thwarted an investigation into a group that supplied U.S. and Canadian fighters to ISIS. We are committed to doing whatever it takes to protect American lives here and abroad.”

 

“Counterterrorism investigations are the highest priority investigations conducted by FBI Joint Terrorism Task Forces,” commented FBI Special Agent in Charge Eric S. Birnbaum. “When someone misleads or obstructs counterterrorism investigations, this can adversely affect investigative activity in these important cases. Today's sentence will hold Mr. McCain accountable for his actions and dissuade others from lying to law enforcement agents concerning international terrorism matters.”

 

The defendant’s lies, including his false statements regarding the source and means of the financing of Douglas’ travel were not only intended to prevent the United States from finding out about the involvement of Abdullahi and others, but were also intended to prevent the discovery of his own involvement.

 

As detailed in the United States’ pleadings, the defendant’s involvement included: agreeing to travel to Syria and join his brother in violent jihadist activities; assisting Douglas and others in traveling to Syria to engage in violent jihadist activities by taking Douglas to a gun range to target shoot semi-automatic weapons; depositing cash into his wife’s bank account and letting Douglas use his wife’s credit card to purchase plane tickets to Turkey, a known entry point for foreign fighters seeking to enter Syria, and to make hotel reservations; regularly communicating with Douglas and other individuals regarding the financial and logistical needs of foreign fighters in Syria; wiring $800 to an ISIS operative in Turkey to support Douglas and/or others engaged in violent jihadist activities; and engaging in obstructive conduct to conceal the material support conspiracies.

 

Notwithstanding the obstructive conduct of McCain, the United States continued its investigation of the terrorist activities of Douglas McCain, Abdullahi and others. On March 10, 2017, a federal grand jury in the Southern District of California returned a two-count sealed indictment charging Abdullahi with conspiring to provide, and providing, material support to terrorists.

 

On Sept. 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi is currently detained in Canadian custody without bail, pending an extradition hearing scheduled for May 31, 2018.  On January 3, 2018, the Abdullahi indictment was unsealed.  Abdullahi is also facing charges in Canada for a Jan. 9, 2014 armed robbery of an Edmonton jewelry store.

 

The Abdullahi indictment alleges that from in or about August 2013 through in or about November 2014, Abdullahi conspired with Douglas and other individuals to provide personnel and money to individuals engaged in terrorist activities in Syria, including the killing, kidnapping and maiming of persons. The charged conspiracy alleges the participation and/or assistance of Abdullahi and approximately 14 other individuals and spans four countries, the United States, Canada, Turkey and Syria.

 

In preparation for their travels, Douglas and other members of the conspiracy practiced with firearms in San Diego and Canada. According to the indictment, Abdullahi, Douglas and others agreed to travel to Syria to support and join terrorist fighters engaged in terrorist activity, including the killing, kidnapping and maiming of persons.

 

In order to raise funds to support their efforts to support and join terrorist fighters in Syria, members of the conspiracy encouraged others to commit crimes against the “kuffar” (an Arabic term meaning infidels or non-believers), such as theft. In furtherance of this material support conspiracy, the indictment alleges that on Jan. 9, 2014, prior to the travel of Douglas and another co-conspirator, Abdullahi committed an armed robbery of a jewelry store in Edmonton, Alberta, Canada, in order to finance the travel of Douglas and other members of the conspiracy to Syria.  Thereafter, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas – in order to finance the travel of foreign fighters from North America to support and join terrorist fighters engaged in terrorist activities in Syria.

 

Additionally, members of the conspiracy, including Abdullahi, wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting members of the conspiracy fighting and engaging in terrorist activity in Syria, including the killing, kidnapping, an maiming of persons. 

 

The government alleges that because of the efforts of Abdullahi and other co-conspirators, beginning in November 2013 through November 2014, five co-conspirators, including Douglas McCain, traveled from North America to Syria, via Turkey, and acted as foreign fighters in Syria engaging in terrorist activity in Syria, including the murder of persons.  Douglas McCain was killed in battle fighting for ISIS in August 2014.  The remaining four co-conspirators were all killed in Syria in mid-November 2014.

           

DEFENDANT                                               Criminal Case No. 15CR0174-W

 

Marchello Dsaun McCain                              Age 35            San Diego, California       

 

SUMMARY OF CHARGES

 

False Statements Involving International Terrorism – Title 18, U.S.C., Sections 1001(a)(2)

Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)

 

Felon in Possession of Firearms and Ammunition – Title 18, U.S.C., Sections 922(g)(1)

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

 

Felon in Possession of Body Armor by a Violent Felon – Title 18, U.S.C., Sections 931

Maximum penalty: 3 years’ imprisonment and $250,000 fine.

 

DEFENDANT                                               Criminal Case No. 17CR0622-W

 

Abdullahi Ahmed Abdullahi                          Age 33            Edmonton, Alberta, Canada         

 

SUMMARY OF CHARGES

 

Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)

Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)

 

Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)

Maximum penalty: 15 years’ imprisonment and $250,000 fine.

 

 

INVESTIGATING AGENCIES

San Diego Joint Terrorism Task Force

Federal Bureau of Investigation

Federal Air Marshal Service

Department of Homeland Security, Homeland Security Investigations

Department of Homeland Security, U.S. Border Patrol

Assistant U. S. Attorneys Alessandra P. Serano (202) 252-5843 or Joseph Orabona (619) 546-7951    

 

NEWS RELEASE SUMMARY – January 8, 2018

 

SAN DIEGO – Two gang members of the Westside Crips and one hotel manager of two national brand hotels in Oceanside were sentenced last week for their participation in a racketeering conspiracy involving sex trafficking, narcotics trafficking, and other violent crimes.

   

Richard Cleveland (aka “Face”), Michael Sullivan (aka “Du-Low”), and Umesh Oza (aka “Kevin”), previously admitted their respective membership and association with the Westside Crips, who primarily operated in Oceanside and elsewhere.  Last week, United States District Judge John A. Houston sentenced Cleveland to 57 months in prison, sentenced Sullivan to 36 months in prison, and Oza, a hotel manager for two national brand hotel chains, to 4 months in prison and 180 days of home detention.  Three other co-defendants – Ameer Roby aka “Tiny Dum”, Peter Miranda aka “Lil’ Burger”, Shane Anderson aka “Tiny West” and Larry Monroe - are scheduled for sentencing for later this month.

  

According to court documents, the members of the conspiracy were involved in drug trafficking, prostitution, attempted murder, assaults, and robberies.  Their criminal activity primarily occurred between 2004 through February 2017.  According to court documents, members of Westside Crips are akin to a crime family, where all members work together committing various crimes for the purpose of making money. The indictment alleges that the defendants took on different responsibilities within the criminal enterprise.  Some sold narcotics.  Others managed prostitutes and transported them all over the country. The hotel manager provided a safe haven for the alleged gang members to conduct their illegal activities.

 

For that reason, the defendants are charged with racketeering conspiracy—the statute traditionally used for organized-crime syndicates and mobsters. But as members, associates, and facilitators of criminal street gangs such as these, join forces and become more sophisticated and prolific in their illicit business pursuits, this statute is an effective tool to address all aspects of the criminal conduct.

 

In furtherance of the RICO conspiracy, Sullivan admitted he engaged in an aggravated assault using a semi-automatic firearm on two suspected juvenile rival gang members in 2004.  More recently, Sullivan admitted to promoting prostitution of adult females between 2013 and 2016.  Sullivan also admitted to possessing methamphetamine for sale.  Moreover, to further his role in the RICO conspiracy, Cleveland admitted he engaged in drug trafficking and promotion of prostitution of adult females between 2015 and 2016.  His drug trafficking activity also involved the sale of methamphetamine.

 

Oza admitted that as the manager of two motels located in Oceanside, California, he further the RICO conspiracy by allowing members of the Westside Crips to utilize the motels for their criminal activity.  In particular, Oza admitted that he allowed members, whom he believed were pimps working for the criminal enterprise, to rent rooms to adult females acting as prostitutes.

 

January marks National Slavery and Human Trafficking Prevention Month.  President Trump recently remarked in a nation press release:

 

Human trafficking is a modern form of the oldest and most barbaric type of exploitation.  It has no place in our world.  This month we do not simply reflect on this appalling reality.  We also pledge to do all in our power to end the horrific practice of human trafficking that plagues innocent victims around the world.

 

“Gang members and associates and those who assist them continue to plague our community with sex trafficking, violence, drugs and other crimes,” said U.S. Attorney Adam L. Braverman. “Our office will continue to use any and all resources to combat the problem.”

 

DEFENDANTS                                            Case Number 17cr0270-JAH                                              

 

Richard Cleveland aka “Face”                        Age: 37                                   Oceanside, CA

Michael Sullivan aka “Du-Low”                    Age: 33                                   Oceanside, CA

Umesh Oza aka “Kevin”                                 Age: 32                                   Oceanside, CA

 

SUMMARY OF CHARGES

 

Title 18, United States Code, Section 1962(d) - Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity; Title 18, United States Code, Section 1963 - Criminal Forfeiture

Maximum Penalties: 20 years’ incarceration, a fine of $250,000, three years of supervised release

 

AGENCIES

 

North County Narcotics Task Force

Drug Enforcement Administration

Oceanside Police Department

Internal Revenue Service

 

 

Sinaloa Cartel cell leader Damaso Lopez-Serrano aka “Mini Lic,” pleaded guilty in federal court today to conspiracy to distribute controlled substances for purpose of unlawful importation following his self-surrender to U.S. law enforcement authorities at the Calexico West, Mexico Port of Entry on July 27, 2017.

 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Adam L. Braverman of the Southern District of California and Acting Special Agent in Charge Steve S. Woodland of the U.S. Drug Enforcement Administration (DEA) San Diego made the announcement.

 

Lopez-Serrano, 29, of Culiacan, Mexico, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States.  Lopez-Serrano pleaded guilty to all charges in an indictment returned by a federal grand jury in San Diego on Aug. 19, 2016, charging him and five of his close associates with conspiracy to distribute methamphetamine, heroin and cocaine intended for importation and conspiracy to import methamphetamine, heroin and cocaine.

 

Lopez-Serrano also pleaded guilty to an indictment returned Dec. 4, 2016, in the Eastern District of Virginia by the U.S. Attorney’s Office for the Eastern District of Virginia and the Criminal Division’s Narcotic and Dangerous Drug Section charging him with conspiracy to distribute cocaine intended for importation.

 

In a proceeding today before U.S. District Judge Dana M. Sabraw, Lopez-Serrano accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including methamphetamine, cocaine and heroin, for importation from Mexico into the United States. Lopez-Serrano also admitted to possessing firearms for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for July 12, 2018 at 10 a.m. before Judge Sabraw.

 

“Damaso Lopez-Serrano’s conviction strikes a serious blow to the leadership of the Sinaloa Cartel and its violent drug trafficking activities,” said Acting Assistant Attorney General Cronan.  “The Administration, the Department and our law enforcement partners are steadfast in our commitment to pursuing and dismantling the international drug rings that poison our communities.”

 

“Cartel leaders have two options – self-surrender or we will work with our counterparts to find you, arrest you and extradite you to San Diego,” said U.S. Attorney Braverman. “For Lopez-Serrano’s distribution of literally tons of methamphetamine, cocaine and heroin across the border to America, he will now face justice in a San Diego federal court.”

 

“The guilty plea of this defendant tells the drug traffickers what they need to know,” said Acting Special Agent in Charge Woodland. “DEA will keep picking off these violent criminals one by one until there are no more willing to get involved for fear that law enforcement will be coming for them soon.  In the face of the current drug crisis we face in this country, DEA will continue to investigate and bring to justice these violent criminals.”

 

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

 

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

 

The primary indictment in this investigation was previously unsealed targeting the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons - Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014 and is pending extradition to the Southern District of California. Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the alleged leader of the Sinaloa Cartel along with Mayo.

 

As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo - Serafin Zambada-Ortiz, who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges.

 

José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias “El Chino Ántrax,” was arrested in the Netherlands, extradited to the United States by Dutch authorities in July 2014 and pleaded guilty to drug trafficking charges in May 2015. Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.

 

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

 

The investigation was conducted by DEA, U.S. Immigration and Customs Enforcement’s  Homeland Security Investigations, U.S. Customs and Border Protection (CBP)’s Office of Field Operations, U.S. Border Patrol, U.S. Marshals Service, Internal Revenue Service Criminal Investigation, FBI,  the U.S. Attorney’s Office for the Eastern District of Virginia, Department of Justice’s Organized Crime Drug Enforcement Task Forces, the Criminal Division’s Office of Enforcement Operations and Office of International Affairs.

 

The case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton from the Southern District of California and Trial Attorneys Amanda Liskamm and Michael Lang of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys William M. Sloan and Mary K. Daly of the Eastern District of Virginia.

 

Director of Media Relations Kelly Thornton

 (619) 546-9726

 

 

NEWS RELEASE SUMMARY – January 10, 2018

 

SAN DIEGO – Sinaloa Cartel cell leader Damaso Lopez-Serrano, aka “Mini Lic,” pleaded guilty in federal court today following his self-surrender to United States law enforcement authorities at the Calexico West Port of Entry on July 27, 2017.

 

Lopez-Serrano, 29, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States. Lopez-Serrano pleaded guilty to all charges in an indictment returned by a federal grand jury in San Diego on August 19, 2016, charging him and five of his close associates with Conspiracy to Distribute Methamphetamine, Heroin and Cocaine Intended for Importation and Conspiracy to Import Methamphetamine, Heroin and Cocaine.

 

Lopez-Serrano also pleaded guilty to an indictment returned December 4, 2016, in the Eastern District of Virginia by the U.S. Attorney’s Office for the Eastern District of Virginia and the Criminal Division’s Narcotic and Dangerous Drug Section charging him with Conspiracy to Distribute Cocaine Intended for Importation.

 

In a proceeding today before United States District Judge Dana M. Sabraw, Lopez-Serrano accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including methamphetamine, cocaine and heroin, for importation from Mexico into the United States. Lopez-Serrano also admitted to possessing firearms for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for July 12, 2018 at 10 a.m. before Judge Sabraw.

 

“Damaso Lopez-Serrano’s conviction strikes a serious blow to the leadership of the Sinaloa Cartel and its violent drug trafficking activities,” said Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division. “The Administration, the Department and our law enforcement partners are steadfast in our commitment to pursuing and dismantling the international drug rings that poison our communities.”

 

“Cartel leaders have two options – self-surrender or we will work with our counterparts to find you, arrest you and extradite you to San Diego,” said U.S. Attorney Adam L. Braverman. “For Lopez-Serrano’s distribution of literally tons of methamphetamine, cocaine and heroin across the border to America, he will now face justice in a San Diego federal court.”

 

“The guilty plea of this defendant tells the drug traffickers what they need to know,” said DEA San Diego Assistant Special Agent in Charge Steve S. Woodland. “DEA will keep picking off these violent criminals one by one until there are no more willing to get involved for fear that law enforcement will be coming for them soon.  In the face of the current drug crisis we face in this country, DEA will continue to investigate and bring to justice these violent criminals.”

 

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

 

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

 

The primary indictment in this investigation was previously unsealed targeting the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons - Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014 and is pending extradition to the Southern District of California. Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the alleged leader of the Sinaloa Cartel along with Mayo.

 

As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo - Serafin Zambada-Ortiz, who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges.

 

José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias "El Chino Ántrax,” was arrested in the Netherlands, extradited to the United States by Dutch authorities in July 2014 and pleaded guilty to drug trafficking charges in May 2015. Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.

 

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

 

The government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton from the Southern District of California and Trial Attorneys Amanda Liskamm and Michael Lang of the Criminal Division’s Narcotic and Dangerous Drug Section.

 

DEFENDANT                               Case Numbers: 16CR1896-DMS and 17CR3687-DMS

 

Damaso Lopez-Serrano, aka Mini Lic                           Age: 29                      Culiacan, Mexico

 

SUMMARY OF CHARGES

 

Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.

 

Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.

 

AGENCIES

 

Drug Enforcement Administration

Homeland Security Investigations

Customs and Border Protection, Office of Field Operations

Customs and Border Protection, Office of Border Patrol

United States Marshals Service

Internal Revenue Service

Federal Bureau of Investigation

U.S. Attorney’s Office, Eastern District of Virginia

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

 

 

 

 

                       

 

 

 

                       

Assistant U. S. Attorneys Andrew Haden (619) 546-6961 and Seth Askins (619) 546-6692    

 

NEWS RELEASE SUMMARY – January 5, 2018

 

SAN DIEGO – Deandre Cook today became the last of 25 gang members and associates to be sentenced as part of a prolific gun and drug trafficking operation that sold large quantities of methamphetamine and heroin in southeast San Diego neighborhoods. Cook was sentenced by U.S. District Judge John Houston to 84 months in prison.

Today’s sentencing brings the case to a close with the successful convictions of all 25 defendants.  Last month, Judge Houston sentenced the lead defendant in the conspiracy, Fili Usini, to 14 years in prison.

 

The two original 2016 indictments were the product of a year-long investigation. Over 1,500 grams of methamphetamine, 248 grams of heroin and six firearms were also seized as part of the investigation. The two indictments charged four different conspiracies with overlapping players, including individuals with ties to criminal street gangs such as Skyline, the Samoan Bloods, Kalaban, the Stateside Islanders, the Paradise Hills Locos, Logan Heights, Old Town National City, National City Southside Mob, Trust No Soul and Lincoln Park. Most of the defendants were selling methamphetamine on the streets of southeast San Diego. Other defendants were involved in the importation of methamphetamine and heroin from Mexico.

All 25 defendants charged in the case pleaded guilty and were convicted of drug trafficking. Three defendants were also charged with and pleaded guilty to being felons in possession of firearms. Judge Houston imposed prison terms on all 25 defendants, ranging from a low of 14 months to the high of 168 months for Usini.  All but six defendants received prison terms in excess of five years.

The case was the product of a coalition of local, state, and federal agents, led by Homeland Security Investigations (HSI) Gang Investigations Group and the San Diego Police Department.

“Methamphetamine is wrecking lives and communities, and this successful prosecution brings an immediate halt to the dangerous environment created by these 25 gang members and associates,” said U.S. Attorney Adam L. Braverman. “This case is a huge success story in our efforts to restore peace and safety to San Diego neighborhoods. We are going to continue our attack on those gang members who are committing violence on the streets of San Diego.”

 

"HSI Special Agents will continue to work with other law enforcement partners and prosecutors to eliminate the dangers that gang members bring up on our communities and put a stop to their criminal enterprises," said David Shaw, Special Agent in Charge of HSI in San Diego. “We will continue to work diligently to investigate, and ultimately dismantle these transnational street gangs and bring them to justice.”

 

“This operation and collaborative effort is yet another example of how well San Diego County law enforcement agencies partner together to fight crime to keep our neighborhoods safe", said San Diego Police Chief Shelley Zimmerman. "We will not tolerate criminal activity and we will continue to work together with all of our communities to make San Diego the safest City in the nation.”

 

United States v. Ortiz, et al, 16-CR-874-JAH

 

Defendants

 

FRANCISCO JAVIER ORTIZ-LUNA (1) –75 months prison

JAVIER HERNANDEZ (2) – 37 months prison

YARELI MAGNOLIA NORIEGA (3) – 78 months prison

JASMINE EUNIQUE RIPP (4) – 46 months prison

JULIO ALBERTO ONTIVEROS (5) – 46 months prison

 

Summary of Charges

 

Title 21, U.S.C., Secs. 952, 960, 963 Conspiracy to Import Controlled Substances - Life

Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine - Life

Title 21, U.S.C., Secs. 952 and 960  Importation of Methamphetamine – 20 years

Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – 40 years

Title 21, U.S.C., Secs. 952 and 960 B Importation of Heroin – 40 years

Title 21, U.S.C., Sec. 841(a)(1)- Possession of Heroin with Intent to Distribute – 20 years

 

United States v. Usini, et al., 16-CR-875-JAH

 

Defendants

 

FILI USINI (1) – 168 months prison

VIRGILIO SORIANO VILLEGAS (2) – 87 months prison

CARL DELANDO BRANDON (3) – 75 months prison

DEANDRE COOK (4) – 84 months prison

FRANC LESTER BULARAN (5) – 110 months prison

ANTHONY VELARDE (6) – 120 months prison

KRISTOFFER UMALI MACALMA (7) – 110 months prison

BICENTENNIAL POUTOA (8) – 110 months prison

VICTOR CERVANTES (9) – 120 months prison

JORGE ARMANDO SALAS (10) – 90 months prison

MAURICE SCOTT (11) – 70 months prison

JAMES GILLESPIE (12) – 63 months prison

KEITH IAULUALO (13) – 54 months prison

LONNIE DARNELL ANDERSON (14) – 60 months prison

TERRENCE ANDERSON (15) – 70 months prison

PATRICK JEFFREY DIBBLE (16) – 85 months prison

KEMONDRE HAMILTON (17) – 40 months prison

RICHARD BELCHER (18) – 60 months prison

LAVONN WILLIAM HALL (19) – 75 months prison

ANITA VILLALBA (20) – 14 months prison

 

Summary of Charges

 

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

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

Title 18, U.S.C., Sec 922(g)(1) – Felon in Possession of a Firearm – 10 years

Title 21, U.S.C., 853, Title 18, U.S.C., 924(d), and Title 28, U.S.C., 2461(c) – Criminal Forfeiture

 

AGENCIES

 

Homeland Security Investigations

San Diego Police Department

Drug Enforcement Administration

Bureau of Alcohol Tobacco Firearms and Explosives

San Diego Sheriff’s Department

San Diego County Probation Department

El Cajon Police Department

San Diego County District Attorney’s Office

U.S. Bureau of Prisons

 

SAN DIEGO - Attorney General Jeff Sessions has selected the Southern District of California to receive additional resources for the fight against violent crime.  The district will receive an additional Assistant U.S. Attorney to focus exclusively on violent crime, one of 40 new federal prosecutors in 27 selected locations throughout the United States.

 

“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods (PSN) task forces are hitting the streets across America to apprehend and bring violent criminals to justice.  I have asked Congress for additional PSN funding next year because I believe nothing will be more effective at reducing violent crime,” said Attorney General Sessions. “Under this program, I am asking a great deal of our United States Attorneys.  I am both empowering them and holding them accountable for results. To put them in the best position to impact and reduce violent crime, it is my privilege to announce that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States.”

 

“In this district, we are inundated with border-related crimes. Adding a prosecutor to our roster who will focus solely on violent crime will allow us to pursue more of the cases that harm our residents and damage our neighborhoods the most, and that will translate to safer communities,” said U.S. Attorney Adam Braverman. “We are grateful for the additional resources.”

 

More information on the locations of those 40 Assistant United States Attorneys and violent crime task forces is below:

 

AUSA Breakdown by District

 

Northern District of Alabama - 1
Eastern District of Arkansas - 1
Northern District of California - 2
Southern District of California - 1
District of Connecticut - 1
District of Columbia - 1
Central District of Illinois - 1
Northern District of Illinois - 3
Southern District of Indiana - 1
Eastern District of Louisiana - 1
District of Maryland - 3
Western District of Michigan - 1
Eastern District of Missouri - 2
Western District of Missouri - 1
District of Nevada - 2
District of New Mexico - 1
Eastern District of New York - 2
Western District of New York - 1
Northern District of Ohio - 2
Eastern District of Pennsylvania - 1
Middle District of Tennessee - 2
Western District of Tennessee - 2
Eastern District of Texas - 1
Northern District of Texas - 1
Southern District of Texas - 2
Western District of Texas - 1
Eastern District of Wisconsin - 2

 

 

# # #

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

 

NEWS RELEASE SUMMARY – December 14, 2017

 

SAN DIEGO – Jeffrey Harrington and Michael Mayer, owners of several defense contracting firms, were each sentenced in federal court today to 15 months in custody for conspiring to commit wire fraud and file false claims, and to making false statements on their federal income tax returns.

Harrington was also ordered to pay a $10,000 fine, $141,113 in restitution to the Internal Revenue Service, and to forfeit $708,679 in ill-gotten gains; likewise Mayer was ordered to pay a $10,000 fine plus $299,511 in restitution to the IRS and forfeit $708,678.

The defendants admitted fraudulently obtaining money from the United States by making false representations and false claims to the Department of Defense (“DoD”) for payment on items defendants knew had not been sold to the Navy, but which had been substituted with other, unauthorized products.  Three of the companies owned by Harrington and Mayer – including San Diego-based Veteran Logistics, Inc. (“VLI”), Industrial Xchange, Inc. (“IXI”), and Boston Laser Technology, Inc. (“BLTI”) – were also ordered to forfeit over $1.4 million and pay a $1 million fine for their roles in the offenses.

According to court records, the defendants regularly sold supplies to the DoD, the Department of Navy, the General Services Administration and other federal departments and agencies. Each company had multiple contracts with DoD’s Defense Logistics Agency (“DLA”) to sell products to the federal government through “EMALL,” currently known as “FedMall,” which is a web-based electronic commerce site that allows authorized users to search, compare and purchase commonly used products. Each contract allowed the company to sell pre-approved goods at set, maximum prices.  As detailed in court filings, however, the defendants fraudulently manipulated the EMALL system to substitute unapproved items for the goods purportedly sold to the government.

In one example, the defendants agreed on EMALL to supply Maritime Expeditionary Security Group Two at Norfolk Naval Shipyard with over 10,000 “Post-It” writing paper pads.  After colluding with Navy personnel, the defendants replaced these approved items with 50 electronic transceivers they were not authorized to sell.  By fraudulently substituting these products, the defendants were able to circumvent procurement controls and charge the military a 134% mark-up on the transceivers.  The defendants repeatedly employed this fraudulent technique dozens of times, on a host of products, across a wide array of components in the military.

The scheme also allowed the defendants to conceal the sale of consumer electronics and other items that could be readily misused by corrupt military officials.  For example, in one contract VLI agreed to supply the USS Ronald Reagan aircraft carrier with industrial, motorized plumber snakes.  VLI then fraudulently substituted that order with 100 29” Toshiba TVs, 60 32” Toshiba TVs and 160 TV tilt mounts.  VLI purchased these items for only $39,558, then turned around and billed the government $66,807. In another example discussed in court, VLI fraudulently substituted an order for  the USS Germantown with, among other things, two pink Nintendo gaming systems, two iPod Touch devices, and a PlayStation.

The plea agreements also detailed a series of transactions between October 2013 and April 2014, wherein IXI and another VLI-affiliated company, At Your Command (“AYC”), created approximately twenty EMALL carts for Navy Explosive Ordnance Disposal Group #2 in Norfolk, Virginia, containing various items, including bags, canvas organizer bags, and pouches, for which the defendants billed DLA and received $1,303,024. In reality, the defendants actually provided EODG-2 group with parachutes, altimeters and other sky diving gear purchased for approximately $924,252, realizing a profit of $378,772 by substituting improperly procured parachuting equipment.

The defendants were hugely successful in their fraud, and received approximately $45 million for EMALL sales related to over 12,000 transactions between approximately March 1, 2008 and January 31, 2015. On a small sample of 60 of those transactions between August 2009 and October 2013, totaling approximately $2,868,590 in sales, the loss to the Navy was approximately $1,417,395, indicating a fraud loss of approximately 50%.

Harrington and Mayer also pleaded guilty to false statements on their tax returns for the tax years 2010 and 2014. Harrington and Mayer both used VLI to pay personal expenses in excess of $200,000 and $100,000, respectively, thereby underreporting their 2010 income on their personal tax returns.  Both defendants, in contravention of the advice of their tax professionals, continued using VLI to pay for personal expenses and not declaring these benefits as income, causing their 2014 income tax returns to under-report their income by approximately $436,017 and $674,704, respectively. By under-reporting their income, Harrington underpaid taxes by $141,113, and Mayer underpaid taxes by $299,511, for 2010 and 2014.

In addition to these criminal sentences, all defendants will be suspended from government contracting.

United States Attorney Braverman observed: “Not only did the defendants inflict financial harm on the taxpayers by charging arbitrary mark-ups on these items, but they potentially compromised combat readiness by providing unauthorized, non-conforming parts.  What’s more, their scheme posed a significant danger of corrupting Navy personnel and others by essentially creating a ‘slush fund’ to purchase non-military items, such as televisions, computers, gaming systems, cameras, iPhones and other electronics.  This Office will continue to use all the tools available, including the District’s Procurement Fraud Working Group, to prevent and deter those who pose the threat of fraud and corruption to our procurement process.”

Chris Hendrickson, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service, said, “The defendants in this case exploited their connections with the U.S. Navy and others to grossly inflate their profitability and otherwise cheat the taxpayers and their commercial competition over a period of many years.  This type of fraud will be aggressively investigated by DCIS and our partners at every opportunity to preserve the integrity of the contracting process.”

“The success of this case is a direct result of the joint efforts of the Naval Criminal Investigative Service, our Federal Law Enforcement Partners and the U.S. Attorney's Office,” said Edward Denion, Assistant Special Agent in Charge of the NCIS Southwest Field Office. “Protecting our warfighters is one of the top priorities of NCIS, and this investigation is an example of how we do this. Anyone considering defrauding the Navy and taxpayers should know NCIS will aggressively pursue all such allegations and work with our partners to ensure the conviction of all those involved.”

FBI Special Agent in Charge Eric S. Birnbaum stated, “Today’s convictions are a result of federal partners teaming together to stop the loss of millions of government dollars as well as the greed and deceit employed in this case.” SAC Birnbaum continued, “The FBI will continue to work to root out fraud against our government and uncover the schemes to steal federal taxpayer dollars.”  The FBI encourages the public to report allegations of public corruption to the FBI public corruption hotline at telephone number (877) NO-BRIBE (662-7423).

“The sentences handed down today should serve as a warning to the public that those who seek to defraud the United States government by lining their pockets through fraudulent procurement schemes will face severe consequences,” said IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe.   “The agents who worked this case should be commended for their thorough investigation and for expertly following the paper trail that led to the unraveling of this complex fraud scheme.”

U.S. District Judge Michael M. Anello had previously sentenced two other co-defendants, Kimberlee and Natalee Hewitt, on October 16, 2017, to 3 years’ probation and $100,000 each in forfeiture, as well as $3,500 each in criminal fines.

CORPORATE DEFENDANTS

Veteran Logistics, Inc.

Industrial Xchange, Inc.

Boston Laser Technology, Inc.

 

INDIVIDUAL DEFENDANTS                                              

 

Jeffrey Harrington                    Age: 55            San Diego, CA

Michael Mayer                         Age: 63            San Diego, CA

Kimberlee Hewitt                     Age: 45            Ridgewood, New York

Natalee Hewitt                         Age: 49            Virginia Beach, Virginia

 

Criminal Case No.

 

17CR0488-MMA

 

SUMMARY OF CHARGES

 

Count 1 (All):

Conspiracy to commit wire fraud and file false claims (18 U.S.C. § 371).

Maximum penalties: 5 years’ imprisonment; 3 years’ supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $10.

 

Count 2 (Harrington):

False Statement on Tax Return (26 U.S.C. § 7206(1)).

Maximum penalties: 3 years’ imprisonment; 1 year supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $100.

 

Count 3 (Mayer):

False Statement on Tax Return (26 U.S.C. § 7206(1)).

Maximum penalties: 3 years’ imprisonment; 1 year supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $100.

 

AGENCIES

 

Defense Criminal Investigative Service

Defense Logistics Agency, Office of Inspector General

Federal Bureau of Investigation

General Services Administration, Office of Inspector General

Internal Revenue Service, Criminal Investigation

Naval Audit Service

Naval Criminal Investigative Service

 

 

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

 

NEWS RELEASE SUMMARY – December 21, 2017

 

SAN DIEGO – Renan Dias Da Rocha Gomes, a former employee aboard the Disney Wonder cruise ship, entered a guilty plea today to one count of wire fraud in connection with his scheme to embezzle more than $275,000 from The Walt Disney Company.

 

Gomes, who was arrested by federal agents on October 27, 2017, when the Disney Wonder made port in San Diego, admitted that from at least October 2015 through October 27, 2017, he was employed as a merchandise host and assigned to work in the merchandise stores aboard the Disney Wonder. At the hearing today, Gomes admitted he executed his scheme by fraudulently obtaining money through his access to the VeriFone payment system in order to embezzle funds from Disney for his own personal use and benefit.

 

According to the plea agreement, Gomes admitted he made approximately $275,000 in unauthorized charges to Disney’s bank account, and loaded the value of the funds onto Disney gift cards while working aboard the Disney Wonder on the high seas. Gomes also admitted that from April 23, 2017 through May 7, 2017, he spent approximately $37,700 of the embezzled funds for his own personal benefit by taking his family on a Disney World vacation. While on this vacation, Gomes stated the he used the gift cards with the embezzled funds to pay approximately $8,200 on lodging, approximately $29,500 on food, beverage, merchandise and entertainment expenses. As part of his plea agreement, Gomes will be required to repay The Walt Disney Company the total amount of funds he stole which the company was unable to recover.

 

“When someone misappropriates company assets, the loss not only affects the company but also the consumer. Today’s guilty plea sends a strong message that those who commit such corporate fraud, even while operating on the high seas, will be held accountable in this district,” said United States Attorney Adam L. Braverman. 

 

“This case illustrates the dangers that businesses face from trusted insiders who seek to defraud them.  While external fraud threats are usually the focus, the greatest fraud threats to businesses are typically from within,” stated Special Agent in Charge Eric S. Birnbaum.  “The FBI remains committed to working with our law enforcement partners to detect corporate crime in all its forms and bring those responsible to justice.”

 

“Today’s guilty plea is an example of the significant results that can be achieved when law enforcement agencies form a great partnership and work diligently to bring a case to prosecution,” said David Shaw, Special Agent in Charge for Homeland Security Investigations (HSI) in San Diego. “HSI will continue to investigate these individuals who attempt to enrich themselves by fraudulent means.”

 

Gomes’ next court appearance is on March 9, 2018 at 9 a.m. before U.S. District Judge Cathy A. Bencivengo. Gomes, who is a Brazilian national, remains in federal custody.

 

DEFENDANT                                   Criminal Case No. 17CR3897-CAB

Renan Dias Da Rocha Gomes            Age: 32           Citizenship: Brazil

 

SUMMARY OF CHARGES:

Count 1 – Wire Fraud (18 U.S.C. § 1343)

Maximum Penalties: mandatory minimum of 20 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years; restitution

 

 

INVESTIGATING AGENCIES

Federal Bureau of Investigation

Homeland Security Investigations, Immigration and Customs Enforcement

U.S. Customs and Border Protection

 

 

 

           

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

 

NEWS RELEASE SUMMARY – December 19, 2017

 

SAN DIEGO – Victor Manuel Felix-Felix, the alleged leader of a Mexican money laundering and cocaine trafficking organization, was extradited to the United States by Mexico yesterday and made his first appearance in federal court this afternoon.  Felix-Felix was a close associate of Joaquin “Chapo” Guzman-Loera and Felix Felix’s daughter is reportedly married to Guzman-Loera’s son.

 

According to extradition documents, in 2009, Drug Enforcement Administration (DEA) agents began investigating a money laundering organization based in Southern California. One agent, acting in an undercover capacity, flew to Panama City, Panama and posed as the leader of a transportation cell capable of moving narcotics and bulk currency using private aircraft.  After several additional undercover meetings, the agent gained the trust of the organization and agreed to begin picking up bulk currency for transfer to Mexico. Over the course of 2010 and 2011, the agent arranged for the transfer of millions of dollars in currency, coordinating with local law enforcement to arrange pick-ups in Los Angeles, California; New York, New York; Houston, Texas; Chicago, Illinois; Vancouver, Canada and Montreal, Canada.

 

After the successful currency pick-ups, the undercover agent began traveling to Central America to meet with higher-level members of Felix-Felix’s organization. In September 2010, at a meeting in the Dominican Republic, the undercover agent offered that he could transport cocaine from Ecuador to Mexico City, extradition documents said. Felix-Felix agreed, and provided the agent with an encrypted phone and a cash down-payment of $3.5 million for his services. A team of DEA agents then traveled to Ecuador and worked with local law enforcement to set up a roadside checkpoint and seize a truck containing 2,500 kilograms of cocaine intended for Felix-Felix.

 

After the seizure in Ecuador, the undercover agent offered Felix-Felix that he could transport another load of cocaine from Ecuador to Mexico City.  After receiving another upfront payment of $1 million in cash, DEA agents coordinated with Ecuadorian and Mexican law enforcement to arrange for an international “controlled delivery” of cocaine using a private jet.  Agents picked up cocaine in Ecuador, transported it to Mexico City, and then seized it after it was delivered to members of Felix-Felix’s organization, the extradition documents said.  Felix-Felix and 18 others were then arrested.

 

On May 13, 2011, a federal grand jury in San Diego returned an indictment, charging Felix-Felix with Engaging in a Continuing Criminal Enterprise, Conspiracy to Distribute Cocaine and Conspiracy to Commit Money Laundering. Felix-Felix was flown by the United States Marshals Service from Mexico City to San Diego on December 18, 2017. He is scheduled to be arraigned on Tuesday, December 19, 2017, before U.S. Magistrate Judge Andrew Schopler.

 

United States Attorney Adam Braverman stated, “Today is a reminder that international drug kingpins who profit by shipping narcotics into our community are not safe from prosecution. We will work with our international partners to bring them to justice wherever they reside.” 

 

U.S. Attorney Braverman also praised the outstanding work of the DEA, National City Police Department, San Diego Police Department, San Diego Sheriff’s Office, Mexican Federal Police, Colombian National Police, Panamanian National Police, and the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.

 

“DEA will continue to hunt down these violent drug traffickers,” said DEA San Diego Special Agent in Charge William R. Sherman.  “Let this be a warning to those who think they can step into the shoes of those who have been arrested-we will come for you too.”

 

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.

 

In 2012, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Felix-Felix under the Foreign Narcotics Kingpin Designation Act. The Kingpin Act prohibits U.S. persons from conducting financial or commercial transactions with these individuals and freezes any assets they may have under U.S. jurisdiction.

 

Felix-Felix’s next court appearance is scheduled for January 16, 2018 before U.S. District Judge Marilyn Huff.

 

DEFENDANT                                                      11-CR-1926-H

 

Victor Manuel Felix-Felix

                       

SUMMARY OF CHARGES

 

• Operating a Continuing Criminal Enterprise (18 U.S.C. 848)
• Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h))
• Transportation of Monetary Instruments from the United States to a Place Outside the United States (21 U.S.C. 1956(a))
• Conspiracy to Distribute Cocaine Outside the United States ( 21 U.S.C. 959, 960)
• Distribution of Cocaine Outside the United States (21 U.S.C. 959, 960)
• Conspiracy to import cocaine (21 U.S.C. 952 and 960)

 

AGENCIES

 

Drug Enforcement Administration

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of International Affairs

National City Police Department

San Diego Narcotics Task Force

San Diego District Attorney, Bureau of Investigations

Mexican Federal Police

Mexico’s Procuraduria General de la Republic (PGR)

Panamanian National Police

Ecuadorian National Police

Colombian National Police

Vancouver Police Department

Quebec Provisional Police

 

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

Assistant U. S. Attorneys Andrew Young (619) 546-7981, Benjamin Katz (619) 546-9714 or Mark W. Pletcher (619) 546-9604

 

NEWS RELEASE SUMMARY – December 15, 2017

 

SAN DIEGO – Owen Hanson, the leader of the violent “ODOG” racketeering enterprise, was sentenced to 255 months in prison and a lifetime of supervised release for leading an international drug trafficking, gambling and money laundering enterprise that operated in the United States, Central and South America and Australia from 2012 to 2016. 

 

According to court records, ODOG trafficked thousands of kilograms of cocaine, heroin, methamphetamine, MDMA (also known as “ecstasy”), marijuana, anabolic steroids and Human Growth Hormone (“HGH”). As Hanson admitted, ODOG’s drug operation routinely distributed controlled substances at wholesale and retail levels, including selling performing enhancing drugs to numerous professional athletes.  The organization also operated a vast illegal gambling operation focused on high-stakes wagers placed on sporting events.  The Enterprise used threats and violence against its gambling and drug customers to force compliance.  One particular victim who owed ODOG more than $2 million described in graphic detail at today’s hearing how Hanson sought to collect the debt by sending DVD’s to the victim and the victim’s wife showing beheadings, as well as a photo of victim’s desecrated family’s gravestone.

 

United States District Judge William Q. Hayes explained that a severe sentence was warranted because of the “staggering” and “astounding” size and scope of ODOG’s criminal activities.  Noting that Hanson moved hundreds of kilograms of drugs, all over the globe, month after month made him truly an “international drug trafficker.”  Judge Hayes commented to Hanson: “It is difficult to understand how you got here, other than greed.”

 

According to the government’s sentencing papers, Hanson’s criminal activity started while he was a football player at the University of Southern California, where he “birth[ed] his drug trafficking empire by selling recreational drugs and steroids to his teammates”  of a national championship football team, and used his business degree to “to build a criminal enterprise that exploited people at their lowest moments.”

 

 “Transnational racketeering organizations like ‘ODOG’ represent a clear and present danger to the safety and security of our communities, our country, and our international partners,” observed United States Attorney Adam Braverman.  “From shipping enormous quantities of dangerous drugs around the globe, to operating illegal bookmaking enterprises, to laundering millions of dollars in criminal proceeds, the breadth and scope of Hanson’s illicit activity was truly staggering, and is directly reflected by the more than two-decades long sentence imposed today.”

 

“Dismantling major international and national organized criminal enterprises is a longstanding area of Bureau expertise,” said FBI Special Agent in Charge Eric S. Birnbaum. “The goal of the FBI is to bring down entire organizations, especially those with a wide reach. Today's sentence, along with the 21 other convicted co-conspirators, emphasizes that the 'ODOG criminal organization' will no longer traffic drugs on our streets; will no longer run its illegal gambling ring; and will no longer bring violence upon those who are obstacles to their greed and desire to grow an illegal and dangerous enterprise.”

 

“The long prison sentence handed down today is appropriate and well deserved. Mr. Hanson was held accountable for his brazen actions as a leader and an organizer of a criminal enterprise,” stated Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation.  “The government will now use asset forfeiture as the final lever to seize a significant portion of the illegal proceeds generated by this drug distribution and gambling operation.  IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”

 

Hanson’s criminal career was ascendant when the FBI took down his operation.  According to sentencing papers, “Hanson showed no signs of stopping this criminal activity.  He bragged to undercover agents about the success of his operation and his aspirations to be even bigger.  In the days leading up to his arrest, Hanson communicated with an undercover FBI agent to coordinate a methamphetamine deal.  The night before Hanson was arrested, the undercover agent sent Hanson a message letting him know the deal was done and that the methamphetamine was ‘fine stuff.’  Hanson replied, ‘Told u – we don’t **** around.’  In response, the undercover agent thanked Hanson and told him to get a good night’s sleep.  Hanson replied, ‘Money doesn’t sleep.’”  Ultimately, the government argued that Hanson’s downfall brought down others, noting that associating with Hanson “turned gamblers into bookies, drug addicts into dealers, and friends into felons.”

 

In addition to serving more than 21 years in prison, Hanson was also sentenced to pay a criminal forfeiture in the amount of $5 million, including $100,000 in gold and silver coins, a Porsche Panamera, two Range Rovers, luxury watches, homes in Costa Rica, Peru and Cabo San Lucas, a sailboat, and interests in several businesses. 

 

So far, 21 of the 22 defendants charged in connection with this case have pleaded guilty, including:

 

• Luke Fairfield, a San Diego based Certified Public Accountant who assisted Hanson with laundering the proceeds of his various illegal endeavors by setting up shell corporations and advising members of the Enterprise on how to structure bank transactions to avoid detection by bank security and law enforcement;
• Derek Loville, a former professional football player, who pleaded guilty to distributing retail quantities of drugs for the ODOG Enterprise in Arizona;
• Daniel Portley-Hanks, a Los Angeles based private investigator who assisted Hanson with tracking down delinquent gamblers and other individuals who owed the enterprise money; and
• Jack Rissell, an “enforcer” who, in one instance, travelled from Southern California to Minneapolis to attack a delinquent gambler

 

One remaining defendant, Khalid Petras, awaits trial.

The case arose out of a joint investigation by FBI and the New South Wales (Australia) Police Force in conjunction with the New South Wales Crime Commission.  Hanson was initially indicted and arrested on September 9, 2015 after arranging the delivery of five kilograms of cocaine and five kilograms of methamphetamine.  Assistant U. S. Attorneys Andrew P. Young, Benjamin Katz and Mark W. Pletcher are prosecuting the case. 

 

DEFENDANT                                   Case Number: 15CR2310-WQH

 

Owen Hanson                                     Age:    34

Luke Fairfield                                     Age:    40

Kenny Hilinski                                    Age:    39

Giovanni Brandolino                          Age:    42

Daniel Portley-Hanks                         Age:    70

Jack Rissell                                          Age:    50

Derek Loville                                      Age:    48

Chalie D’Agostino                              Age:    52

Marlyn Villareal                                  Age:    32

Dylan Anderson                                  Age:    34

Tim Bryan                                           Age:    48

Jim Muse                                             Age:    53

Jeff Bellandi aka “Jazzy”                    Age:    50

Curtis Chen                                         Age:    33

James Duley                                        Age:    41

Dee Foxx                                            Age:    35

Khalid Petras                                      Age:    55

Rahul Bhagat                                      Age:    31

David Kipper                                      Age:    35

Todd Oldham                                      Age:    32

Daniel Ortega                                     Age:    42

 

SUMMARY OF CHARGES

                                                                       

Count 1

Racketeering Conspiracy to Conduct RICO Enterprise Affairs, 18 U.S.C. § 1962(d)

Maximum penalty: Life in prison, fine of $250,000 or twice the gross gain or loss caused by the offense, forfeiture of any property obtained or operated by RICO enterprise, 5 years’ supervised release.

 

Count 4

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

Maximum penalty: Life in prison, fine of $10,000,000 or twice the gross gain or loss caused by the offense, forfeiture of any proceeds, 10 years’ supervised release.

 

AGENCIES

 

Federal Bureau of Investigation – San Diego Field Office

Internal Revenue Service – San Diego

Australian Crime Commission

New South Wales Police Force

New South Wales Crime Commission

 

*As to defendant Khalid Petras, the charges and allegations contained in an indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.

Assistant U. S. Attorneys Alessandra P. Serano (619) 546-8104 or Connie V. Wu (619) 546-8592

 

NEWS RELEASE SUMMARY – December 15, 2017

 

SAN DIEGO –Marlin Lee Gougher was sentenced today to 200 months in prison and 20 years of supervised release for distributing, receiving and possessing child pornography.  Gougher, a former substitute teacher in the Temecula School District and private tutor, was convicted after a jury trial in September 2017.  

 

At trial, Gougher was found to have possessed two laptop computers with over 300 videos of child pornography, some of which depicted children as young as four years of age.  The FBI executed the search warrant on his Oceanside apartment in January 2013 where they located names of children Gougher had privately tutored over several years. To date, no one has come forward claiming any sexual misconduct by Gougher.

 

In imposing the 200 month sentence, United States District Court Judge William Q. Hayes commented that the images were “the worst I’ve ever seen.” Judge Hayes noted that the “horrific and heart-breaking nature” of the child pornography videos. Some videos depicted children under the age of five being raped by adult males. Judge Hayes said that the victims of child pornography suffer “psychological damage that can’t be undone. They don’t get a determinate sentence.” 

 

U.S. Attorney Adam L. Braverman said, “All child exploitation cases are heinous, but the actions of this defendant, whose profession afforded him special access to young students, are particularly appalling. We will use the full resources of the Department of Justice to seek the longest sentences possible for those who victimize children.”

 

“Each video and each image that Mr. Gougher possessed represented the victimization of a child.  This case is particularly disturbing given the defendant’s former position as a teacher and tutor.” said FBI Special Agent in Charge Eric S. Birnbaum.  “We hope the resulting sentence from this investigation sends a clear message to anyone involved in the online sexual exploitation of a child:  the FBI  is steadfast and committed to identifying child predators and protecting the innocence of our children.”

 

DEFENDANT                                               Case Number 14cr0635-WQH                                            

Marlin Lee Gougher                                       Age: 59           Oceanside, CA

 

SUMMARY OF CHARGES

 

Distribution and Receipt of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(2)

Maximum penalty: 20 years’ imprisonment with a mandatory minimum sentence of 5 years. Lifetime of supervised release

 

Possession of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(4)

Maximum penalty: 20 years’ imprisonment. Lifetime of supervised release

 

AGENCY

 

Federal Bureau of Investigation

 

 

 

 

NEWS RELEASE SUMMARY – December 13, 2017

 

SAN DIEGO – Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were convicted by a federal jury late yesterday of fraud and bribery charges in connection with a massive health care-fraud scheme involving the State of California’s Workers’ Compensation program.

 

After a seven-day trial, the jury found Dr. Grusd and his companies guilty on all charges facing them, including Conspiracy, Honest Services Mail and Wire Fraud, Health Care Fraud, and Travel Act violations, based on their years-long bribery and fraud scheme. 

 

According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $25 million for medical services. Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications.

 

After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over one hundred thousand dollars in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.

 

Dr. Grusd was ordered to return to federal court on March 12, 2018, for a sentencing hearing for himself as well as both corporations. Since 2009, Dr. Grusd and his various companies have filed tens of thousands of liens in the California Workers Compensation System, seeking reimbursement for hundreds of millions of dollars from multiple insurers. To date, any outstanding liens have been stayed and will be sent to lien consolidation for dismissal proceedings as a result of the convictions. The jury could not reach a unanimous verdict as to Dr. Grusd’s administrator, Gonzalo Paredes, who was ordered back to court on January 4, 2018, for a hearing regarding a retrial.

 

Dr. Grusd, Paredes, and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from “Operation Back Lash” – a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system that is continuing.

 

Since then, nearly 40 individuals and corporations have been charged with federal and/or state crimes, including doctors, attorneys, marketers and providers of medical services and devices. The four other defendants charged with Dr. Grusd and Paredes – who were alleged to have received bribes in exchange for patient referrals – have pleaded guilty and are cooperating with the continuing investigation while awaiting sentencing. The charges on which Dr. Grusd went to trial were brought in July 2017, when a grand jury returned a Superseding Indictment against him and his companies.

                                                     

Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

 

“A patient entrusts his life to his physician,” said U.S. Attorney Adam Braverman. “A doctor’s medical decisions should be based on the best interest of the patient, not the highest bidder. The jury has found that Dr. Grusd perverted that sacred relationship by buying and selling patients – oftentimes on a per-body-part basis – for his own personal enrichment.”

 

U.S. Attorney Braverman commended the tireless efforts of the Federal Bureau of Investigation and the California Department of Insurance to investigate these offenses, and thanked San Diego District Attorney Summer Stephan and her office for collaborating with the United States Attorney’s Office on the Operation Back Lash prosecutions.

 

“These convictions show that the paying of illegal bribes and treating patients as commodities for the purpose of lining conspirator's pockets will not be tolerated,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI will continue to use our investigative expertise to dismantle sophisticated criminal conspiracies at the highest levels. This case exemplifies that the FBI and our law enforcement partners are committed to rooting out corruption in our health care system.”

 

Anyone with information about healthcare fraud may call the FBI at 1-800-CALL-FBI, or 1-800-225-5324 or the California Department of Insurance’s toll-free fraud hotline, 800-927-4357.

 

DEFENDANTS                                Case Number: 15cr2821-BAS                     

 

Ronald Grusd                                                              Los Angeles, CA       

Gonzalo Ernesto Paredes                                            LaVerne, CA

California Imaging Network Medical Group             Incorporated in 2007              

Willows Consulting Company                                   Incorporated in 2011              

 

SUMMARY OF CHARGES

 

Conspiracy to Commit Honest Services Mail Fraud, Mail Fraud, Wire Fraud, and Health Care Fraud, in violation 18 U.S.C. 1349

Maximum Penalty: 20 years in custody; $250,000 fine, or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

 

Honest Services Mail and Wire Fraud, in violation of 18 U.S.C. Secs. 1341, 1343 and 1346 (18 Counts)

Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

 

Health Care Fraud, in violation of 18 U.S.C. 1347, (14 Counts)

Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

 

Travel Act, in violation of U.S.C. 1952 (6 Counts)

Maximum Penalty: Five years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

 

INVESTIGATING AGENCIES

 

Federal Bureau of Investigation

San Diego County District Attorney’s Office

California Department of Insurance

 

*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 Sherri Walker Hobson (619) 961-0287

 

NEWS RELEASE SUMMARY – December 7, 2017

 

SAN DIEGO – Oscar Vasquez-Alamilla of Spring Valley pleaded guilty in federal court today to smuggling multiple narcotics in his truck while driving through the Otay Mesa Port of Entry on September 26, 2017 through the SENTRI lanes.

 

Vasquez-Alamilla was a SENTRI (Secure Electronic Network for Travelers Response Inspection) pass holder, which allowed expedited clearance for pre-approved travelers upon arrival in the United States and further allowed travelers to use dedicated lanes into the United States at southern land border ports.  SENTRI is a U.S. Customs and Border Protection (CBP) Program.

 

In pleading guilty today to four felony counts of importing controlled substances, Vasquez-Alamilla admitted that on September 26, 2017, he knew that he was smuggling 24.74 pounds of cocaine, 12.68 pounds of fentanyl, 13.71 pounds of heroin, and over 7,000 pills marked as oxycodone in his truck as he entered the SENTRI lanes at Otay Mesa Port of Entry.  These drugs  were found in his truck by Customs and Border Protection officers (CBP) at the Otay Mesa Port of Entry.

 

Because of Vasquez-Alamilla’s immigration status as a lawful permanent residence of the U.S., he acknowledged in court today that his guilty pleas to importing drugs would cause his  deportation from the U.S. to Mexico.

Vasquez-Alamilla is scheduled for sentencing on March 12, 2018, at 9 a.m. before District Court Judge Larry A. Burns.

 

DEFENDANT                                   Criminal Case No. 17CR3467LAB

 

OSCAR VASQUEZ-ALAMILLA            Age: 34                                 Spring Valley, California

 

SUMMARY OF CHARGES

 

Count 1 – Importation of 6.22 kilograms of heroin (21 U.S.C. 952, 960)

Count 2 – Importation of 11.22 kilograms of cocaine (21 U.S.C. 952, 960)

Count 3 – Importation of 5.75 kilograms of fentanyl (21 U.S.C. 952, 960)

Count 4 – Importation of 7000 oxycodone pills (21 U.S.C. 952, 960)

 

Maximum penalties as to Counts 1, 2 and 3:  10-year minimum mandatory to life; fine of $1 million

 

Maximum penalty as to Count 4:  20 years maximum; fine of $250,000

 

AGENCIES

 

U.S. Customs and Border Protection

Homeland Security Investigations

Assistant U. S. Attorney Robert Ciaffa (619) 546-7748  

 

NEWS RELEASE SUMMARY – December 11, 2017

 

SAN DIEGO – David Enrique Meza of Imperial Beach was sentenced in federal court this morning to life in prison for fatally stabbing his boyfriend 24 times, slashing his throat to the point of near-decapitation and dumping his body in a ravine near Rosarito Beach, Mexico in order to inherit the boyfriend’s estate.

 

During today’s hearing, U.S. District Judge Jeffrey T. Miller called the murder an “inhumane, depraved act” and said the crime qualifies for a harsh sentence in part because of the unusually heinous, cruel nature of Meza’s actions. “The Merriam dictionary defines ‘heinous’ as hatefully or shockingly evil, abominable. This murder was shockingly evil – excessively so,” Judge Miller said.

 

On May 2, 2017, after two weeks of trial and seven days of deliberations, a jury found Meza guilty of murdering Texas retiree Jake Clyde Merendino in the early morning hours of May 2, 2015 in Mexico. Merendino’s body was found next to the highway between Rosarito and Ensenada in an area known as Los Arenales. Meza was convicted of both charges in the indictment, including one count of Foreign Domestic Violence Resulting in Death and one count of Conspiracy to Obstruct Justice.

 

Judge Miller, in describing the reasoning behind the sentence, said at the hearing, “If we try to visualize what happened,  we visualize blow, after blow, after blow, after blow, after slash, after slash, after slash, after blow, and repeat another three times…One can’t even imagine the torture and torment Mr. Merendino experienced.”

 

According to evidence presented at trial, Meza, then 25, and Merendino, then in his early 50s, met online in June 2013 and were involved in a romantic relationship thereafter. At the same time, Meza was also involved in a long-term romantic relationship with Taylor Marie Langston, a Chula Vista High graduate who was pregnant with his child at the time of the murder. Prosecutors said Meza was living a double life.

 

Merendino’s death came two days after he closed escrow on a luxury oceanfront condominium at Palacio del Mar in Rosarito. Meza was the beneficiary. Within days of the murder, Meza produced a handwritten will written on hotel stationery that made him sole heir to Merendino’s estate.

 

Judge Miller, who presided over the trial, told the courtroom that Meza was certainly motivated by greed, but he was also attempting to gain control of his spiraling circumstances. “His double life was collapsing under its own weight. A solution was the savage murder of Mr. Merendino.”

 

U.S. Attorney Adam Braverman said, “Nothing can spare the victim or his family the agony of this unspeakable crime, but today justice was delivered to a murderer who will suffer his own sort of agony – a lifetime in prison.”

 

“This life sentence, plus an additional 20 years for obstruction, is a just punishment for a callous, calculated and brutal murder,” stated FBI Special Agent in Charge Eric S. Birnbaum.  “Our message to all crime victims and today, a message in the name of Jake Clyde Merendino: Every day, the FBI carries an unwavering commitment to work tirelessly to deliver justice for the victims of crime. Alongside our colleagues at United States Attorney’s Office and our law enforcement partners in Mexico, the FBI is proud to have done that today.”

 

According to evidence presented at trial, Meza and Merendino drove to Mexico on April 30, 2015, so Merendino could close on his $273,000 ocean-view condominium at Palacio Del Mar in Rosarito.

 

The next day, on May 1, Meza and Merendino returned to Baja, this time with Merendino driving his Range Rover and Meza following on a motorcycle (a 2014 Christmas gift from the victim). The new condo was not yet ready for occupancy, so they checked in to a room at Bobby’s by the Sea, a hotel nearby.

 

At about 10:30 p.m., the hotel manager heard a motorcycle leaving the hotel parking lot, and Meza was captured on a border camera entering the U.S. at about 11 p.m. Meza returned to Mexico in the early morning hours of May 2, 2015, and his movements were tracked to the murder scene via GPS on his cell phone.

 

Merendino was last seen alive in the early morning hours of  May 2, when he drove out of Bobby’s by the Sea parking lot, telling the hotel security guard that he needed to help a friend stranded on the road. His body was found at around 3 a.m. by Mexican police officers. At 3:57 a.m. Meza crossed into the United States on his motorcycle.

 

At 7 p.m. the same day as the murder, Meza and his fiance returned to the Bobby’s by the Sea hotel in the black SUV. Meza told hotel staff he was there to pick up his personal items from the room he had shared with Merendino.

 

After the slaying, Meza filed an application to probate a 2014 handwritten will in which Merendino left his entire estate to Meza.

 

U.S. Attorney Braverman thanked law enforcement counterparts from Procuraduría General de Justicia del Estado - the Attorney General’s office in the state of Baja California – as well as the Rosarito Municipal Police, for their assistance in the investigation and prosecution of these crimes.

 

Braverman noted that in certain circumstances, the United States has legal jurisdiction to prosecute crimes committed in other countries when U.S. citizens are victimized. “The United States will use every tool at its disposal to investigate and prosecute offenders who prey on U.S. citizens abroad.”

 

DEFENDANT                                   Case Number: 15CR3175-JM

 

David Enrique Meza                           Age: 27

 

SUMMARY OF CHARGES

 

Count One

Interstate or Foreign Domestic Violence Resulting in Murder, in violation of Title 18 United States Code, Section 2261 (a) (1).

Maximum Penalty: Life in prison

Sentence: Life in prison

 

Count Two

Conspiracy to Obstruct Justice, in violation of Title 18, United States Code, Section 1512 (k).

Maximum Penalty: 20 years in prison

Sentence: 20 years in prison

 

AGENCY

 

Federal Bureau of Investigation

 

 

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

 

NEWS RELEASE SUMMARY –  December 11, 2017

 

SAN DIEGO – Tijuana resident Flavio Diego Rivera Davalos was arraigned today in federal court on charges that he smuggled approximately 77.82 pounds of fentanyl into the United States in one of the largest seizures of the deadly drug along the Southwest border with Mexico.

 

According to court documents, Davalos entered the United States from Mexico via the San Ysidro, California Port of Entry. Davalos, a visa holder, was the driver, sole occupant and registered owner of the 2010 Ford Focus bearing Baja California, Mexico license plates.

 

In pre-primary inspection, a Customs and Border Protection Officer and an assigned Narcotics and Human Detection Dog were conducting roving operations when the canine alerted to the odor of narcotics at the vehicle’s passenger rear door area and rear seats.

 

A CBP officer questioned Davalos regarding his purpose of travel to the United States and he responded that he was going to “Las Americas” Premium Outlets shopping mall. At the secondary inspection area, CBP officers detected anomalies in the rear seat and rear quarter panels of the vehicle. According to a complaint, officers found 31 packages throughout the vehicle, including in the driver’s side quarter panel, the passenger’s side quarter panel, the driver’s side rear seat, the passenger’s side rear seat, the speaker box and the firewall under the hood.

 

The defendant’s detention hearing is scheduled on December 14 at 9:45 a.m. before U.S. Magistrate Judge Karen Crawford and his preliminary hearing is set for December 21 at 2 p.m.before U.S. Magistrate Judge Jan Adler.

Federal authorities, led by U.S. Customs and Border Protection and Homeland Security Investigations, confiscated 542.42 kilograms of fentanyl in FY 2017.  In FY 2015, there were only six seizures totaling 30.18 kilograms.  This represents a 914 percent increase in fentanyl seizures at the Ports of Entry in the Southern District of California.

 

DEFENDANT                                   Case Number 17MJ4684

 

Flavio Diego Rivera Davalos             Age 19              Tijuana, Mexico

 

CHARGES

 

Importation of Controlled Substance: 10 year minimum mandatory to life; fine of $1 million dollars; at least 3 years of supervised release; $100 Special Assessment

 

AGENCIES

 

Customs and Border Protection (CBP)

Homeland Security Investigations (HSI)

 

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

 

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

Michelle Wasserman (619) 546-8431

 

NEWS RELEASE SUMMARY – December 5, 2017

 

SAN DIEGO – Luis Valencia pleaded guilty in federal court today to smuggling a tiger cub into the United States from Mexico in the front passenger side of his car while driving through the San Ysidro Port of Entry on August 23, 2017.

 

In pleading guilty, Valencia admitted that on August 18, 2017, he contacted an individual in Mexico to make arrangements to obtain the tiger cub and bring it into the United States.  The following day he received a photograph of a tiger cub from the individual in Mexico with a piece of paper in the photograph, upon which was written the defendant’s full name and the date of August 20, 2017.

 

On August 22, 2017, Valencia said he received a message from the individual in Mexico indicating that the tiger cub would be arriving at the Aeromexico cargo area of the Tijuana airport that evening.  On  August 23, 2017, at approximately 1:30 am, Valencia admitted that he entered the United States from Mexico driving a 2017 Camaro with no license plates.  At the time of entry, as the defendant was aware, underneath the legs of his front seat passenger in the Camaro was a six-week old Bengal tiger cub.  Valencia acknowledged that neither he nor his passenger declared the tiger cub as merchandise entering from Mexico upon their entry into the United States, although he was aware that it should have been declared.  The defendant admitted that he intended to conceal the presence of the tiger cub and deceive the inspectors in order to bring the tiger cub into the United States, and further acknowledged that he brought the tiger cub into the United States for a commercial purpose. 

 

All tiger species (Panthera tigris), including Bengal tigers (Panthera tigris tigris) are listed as endangered under the Endangered Species Act, and are listed on Appendix I of the Convention on International Trade in Endangered Species, an international agreement to which both the United States and Mexico are signatories.  Valencia admitted that neither he nor any of his co-conspirators had received permission from the U.S. Fish and Wildlife Service to import a tiger cub into the United States from Mexico.

 

Valencia is scheduled to be sentenced before U.S. District Judge Anthony J. Battaglia on February February 20, 2018, at 9:00 am.  Co-defendant Eriberto Paniagua is set for trial on January 9, 2018, at 9:00 a.m.

 

“We have laws in place to protect endangered species, and smuggling a tiger in the front seat of a car puts both the tiger and the public in jeopardy,” said U.S. Attorney Adam Braverman. “We will hold violators accountable.”

 

“Today’s guilty plea demonstrates Homeland Security Investigations’ (HSI) commitment to hold those involved in wildlife trafficking accountable,” said David Shaw, Special Agent in Charge of HSI in San Diego. “HSI Special Agents are committed to working together with U.S. Fish & Wildlife and other law enforcement partners to investigate and arrest those who do not abide by their legal obligations to seek permission from U.S. authorities to import endangered species such as the tiger cub in this case, who was ultimately rescued from this trafficking ring.”

 

“One of the highest priorities of the U.S. Fish and Wildlife Service Office of Law Enforcement is to investigate individuals involved in the unlawful commercial trafficking and smuggling of protected animals here and around the world,” said Fish and Wildlife Special Agent in Charge Jill Birchell.  “Tigers are one of the most imperiled species on the planet, and this investigation demonstrates that anyone attempting to unlawfully exploit these majestic creatures will be apprehended and held accountable."

 

DEFENDANT                                   Criminal Case No. 17cr2856-AJB

 

Luis Valencia                                      Age: 18                                   Perris, California

 

SUMMARY OF CHARGES

 

Conspiracy, 18 U.S.C. § 371

Maximum penalty: 5 years’ prison, fine of $250,000 or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the offense, five years of supervised release.

 

AGENCIES

 

U.S. Fish and Wildlife Service, Office of Criminal Investigations

Homeland Security Investigations

 

 

Assistant U.S. Attorney Christine M. Ro (619)546-7937

 

NEWS RELEASE SUMMARY – December 4, 2017

 

SAN DIEGO - Former bookkeeper Claude Theodore Riley was sentenced in federal court today to 24 months in prison for embezzling from his former employer and failing to pay taxes on the stolen funds. He was also ordered to pay $273,000 in restitution to the employer and $75,000 to the Internal Revenue Service.

 

Riley pleaded guilty in September to wire fraud and making a false tax return in a five-year scheme in which he stole stealing from his employer, an Imperial Valley farm.  Riley stole approximately $272,984.00 from his employer, filed fraudulent tax returns, and failed to file required employment tax returns resulting in a $1.5-million-dollar tax lien against the farm.  

 

Riley served as the farm’s bookkeeper from 2010 to 2015, overseeing the farm’s entire annual budget.  As the bookkeeper, Riley had access to the farm’s bank accounts, paychecks, and bookkeeping records.  Riley forged certain IRS documents to hide his embezzlement from the employer.  For his scheme, Riley made 148 transactions out of the employer’s bank account, fictitiously entered various vendors to be paid into the bookkeeping records, and generated checks made payable to himself.

 

“His employer trusted Riley to safeguard the fruits of their labor, but he diverted hundreds of thousands of those hard-earned dollars into his own pocket,” said U.S. Attorney Adam Braverman. “Today, the defendant pays the price for his deception.”

 

“Mr. Riley took advantage of the trust of his employer for his own benefit,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today, justice is served for this Imperial Valley farm family.  This case is an excellent example to illustrate how the FBI works to uncover fraud schemes that have a significant impact on the Valley's hard-working farming industry.”

 

The farming industry is an important source of Imperial Valley’s economy and producer of agriculture for the nation.  Imperial Valley is one of California’s top producers of agriculture, which generates income for local families in the Southern District of California. 

           

DEFENDANT                                               Criminal Case No. 17CR2721-BAS

 

Claude Theodore Riley                                   Age: 56           Brawley, California   

 

SUMMARY OF CHARGES

 

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

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

 

Filing a False Tax Return – Title 26, U.S.C., Section 7206(1)

Maximum penalty: 3 years’ imprisonment and $250,000 fine

 

INVESTIGATING AGENCIES

 

Federal Bureau of Investigation, Imperial County Resident Agency

Internal Revenue Service, Criminal Investigation

Brawley Police Department

 

 

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – December 1, 2017

 

SAN DIEGO – U.S. Navy commander Bobby Pitts was sentenced today to 18 months in prison, a $15,000 fine and $7,500 in restitution for conspiring to impede the Navy’s investigation of Singapore-based defense contractor Leonard Glenn Francis.

 

Pitts, 48, of Chesapeake, Va., pleaded guilty to one count of conspiracy to defraud the United States, admitting that he conspired to protect Francis, owner and chief executive of Glenn Defense Marine Asia (GDMA) from allegations of wrongdoing.

 

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

 

In pronouncing sentence today, U.S. District Judge Janis L. Sammartino told the defendant that in committing his crime, Pitts “betrayed the Navy and betrayed the Country.” 

 

According to admissions made as part of his plea agreement, from August 2009 to May 2011, Pitts served as the Officer in Charge of the U.S. Navy’s Fleet Industrial Supply Command (FISC) in Singapore.  As part of his duties, Pitts was responsible for overseeing the legal and ethical execution of the U.S. Navy’s ship husbanding contracts in the Pacific, including those held by Francis. 

 

In 2009 and 2010, Pitts learned that Naval Criminal Investigative Service and several civilian employees of the U.S. Navy were investigating whether Francis was over-billing the U.S. Navy on ship husbanding contracts.  In fact, Pitts had access to internal U.S. Navy documents pertaining to investigative steps that the U.S. Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the U.S. Navy’s oversight of its contracts with GDMA. 

 

On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal U.S. Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for force protection services in fact provided by the Thai government. 

 

“Pitts deliberately and methodically undermined government operations and in doing so, diverted his allegiance from his country and colleagues to a foreign defense contractor, and for that, he is paying a high price,” said U.S. Attorney Adam Braverman.

 

So far, 19 of 28 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty.

 

The case is being prosecuted by Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Fraud Section of the Justice Department’s Criminal Division.                   

 

DEFENDANT                                                           Case Number: 16-CR-1207                                     

 

Commander Bobby Pitts                                            Age 48           Chesapeake, Virginia

 

SUMMARY OF CHARGES

 

Conspiracy to Defraud the United States, in violation of 18 U.S.C. § 371

Maximum Penalty: Five years in prison, a $250,000 fine or twice the gross gain or loss from the offense, whichever is greater

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

 

Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958   

 

NEWS RELEASE SUMMARY – November 29, 2017

 

SAN DIEGO – Edwin Fuller, a member of a drug trafficking organization that illegally acquired and distributed at least 50,000 oxycodone tablets valued at $1.5 million during a three-year span, was convicted by a federal jury today following a three-day trial.

 

Fuller was part of what is believed to be the San Diego region’s most prolific and well-organized oxycodone ring. The organization acquired oxycodone via fraudulent prescriptions and phony California identification cards and distributed the pills across the country. One significant seizure involved 7,000 pills sent by this organization to Columbus, Ohio.

 

Fuller is the fourth key member of the organization that has been convicted in the case so far. The investigation is ongoing.

 

Two coconspirators testified at trial that Fuller was a recruiter and a “filler” who walked into pharmacies to get bogus prescriptions filled.  Fuller received the oxycodone and distributed it to others. Evidence at trial proved that over a six-month period Fuller was able to successfully acquire more than 11,000 30-milligram tablets of oxycodone. The traffickers obtained pills for about $2 each from the pharmacies and then sold them for a street value of up to $30 each.

 

One coconspirator testified that she was “thankful” for being arrested because she would have died as a result of her addition to oxycodone.

 

U.S. Attorney Adam Braverman said prosecution of this organization and others like it is a priority for this office because their greed is feeding the addiction crisis in California and other regions of the United States.

 

“Just yesterday I heard from parents who tragically lost their son to opiate addiction. This case demonstrates that we are holding pill peddlers accountable for the havoc they are wreaking on our country,” said U.S. Attorney Adam Braverman. “We will not tolerate drug trafficking rings that seek to profit by exploiting and endangering people who struggle with substance use disorder.”

 

Earlier today, Attorney General Jeff Sessions announced new resources and stepped up efforts to address the drug and opioid crisis, including over $12 million in grant funding to assist law enforcement in combating illegal manufacturing and distribution of methamphetamine, heroin, and prescription opioid and a directive to all U.S. Attorneys to designate an Opioid Coordinator to work closely with prosecutors, and with other federal, state, tribal, and local law enforcement to coordinate and optimize federal opioid prosecutions in every district.

Fuller is scheduled to be sentenced on February 15, 2018 at 2:15 p.m. before U.S. District Judge Gonzalo Curiel.

 

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.

 

DEFENDANTS                                            Case Number 16cr0867                               

Edwin Fuller                                                   Age: 39                       Los Angeles

 

SUMMARY OF CHARGES

 

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

Maximum penalty: 20 years in prison and $1 million fine

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

 

NEWS RELEASE SUMMARY – November 16, 2017

 

SAN DIEGO – Adam L. Braverman, a veteran prosecutor who has spent a significant part of his government career pursuing large-scale international drug trafficking cartels, took the oath of office today to become U.S. Attorney for the Southern District of California following his interim appointment by Attorney General Jeff Sessions.

 

“It is an honor and privilege to be asked to lead an office that is so close to my heart,” Braverman said. “I intend to support all the excellent work that is underway in this office, and also to pursue new, comprehensive, long-term solutions to our most challenging issues – particularly those crimes committed by transnational criminal organizations.”

 

Braverman, a native of Columbus, Ohio, has been a federal prosecutor in San Diego since 2008. He was most recently deputy chief of the Criminal Enterprises Section, which investigates and prosecutes international and domestic narcotics trafficking organizations and criminal street gangs.

 

During his tenure as an Assistant U.S. Attorney, Braverman led one of the Department of Justice’s most successful investigations and prosecutions of the Sinaloa Cartel, which resulted in the indictments of more than 125 people, including the command and control structure of the Sinaloa Cartel.

 

Braverman has been the recipient of numerous significant awards in recent years, including a Justice Department honor for superior performance as an Assistant U.S. Attorney in 2017 and the prestigious J. Michael Bradford Award from the National Association of Former United States Attorneys in 2016 for most outstanding performance by an Assistant U.S. Attorney.

 

With his appointment, Braverman becomes the top-ranking federal law enforcement official in the Southern District of California, which includes San Diego and Imperial counties.  The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, public corruption, child exploitation, firearms, immigration and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.

 

Braverman earned his bachelor’s degree in political science and criminal justice from The George Washington University in 1997 and his law degree from The George Washington University School of Law in 2000. He began his legal career as a law clerk, first for Washington, D.C. Superior Court Judge Ann O’Regan Keary in 2000 and then for U.S. District Judge Reggie B. Walton in the District of Columbia in 2002.

 

In 2004, Braverman went to work in private practice at Goodwin Procter in Washington, D.C. and then became a law clerk for Judge Consuelo M. Callahan of the U.S. Court of Appeals for the Ninth Circuit in 2007. He joined the U.S. Attorney’s office in San Diego in 2008.

 

Braverman replaces Alana Robinson, who was appointed by Department of Justice officials in January to be acting U.S. attorney on a temporary basis for up to 300 days, a period that expired today. Chief U.S. District Judge Barry T. Moskowitz officiated over the swearing-in ceremony. 

 

Special Assistant U.S. Attorney Ari Fitzwater (619) 546-8756 and Assistant U. S. Attorney Connie Wu (619) 546-8592 

 

NEWS RELEASE SUMMARY – November 14, 2017

 

SAN DIEGO – Jesus Armando Portocarrero-Angulo was sentenced yesterday by U.S. District Judge Roger T. Benitez to 104 months in prison and 5 years of supervised release for possessing with intent to distribute over 1,370 pounds of cocaine while onboard a vessel.

    

On October 4, 2016, defendant Portocarrero-Angulo was acting as the captain of the go-fast vessel “Pez Sierra,” which was traveling in international waters. While on routine patrol, a maritime patrol aircraft observed the occupants of the vessel throwing bales of suspected contraband overboard into the ocean.

 

A helicopter launched from the United States Coast Guard Cutter Waesche approached the defendant’s  vessel, which was traveling in the Eastern Pacific Ocean about 175 nautical miles northeast of the Galapagos Islands of Ecuador.  The helicopter signaled the defendant’s vessel to stop, but it refused to do so. The helicopter used warning shots, and then precision fire to disable the vessel. The Coast Guard recovered approximately 21 bales of cocaine previously thrown overboard from the defendant’s vessel.

 

Portocarrero-Angulo pleaded guilty in August. Two additional crewmembers who were onboard the go-fast vessel have also pleaded guilty and are scheduled for sentencing before Judge Benitez on January 8, 2018.

 

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.

 

DEFENDANT                                                           Case Number 16cr2555                                           

Jesus Armando Portocarrero-Angulo                          Age: 33                                   Ecuador

 

SUMMARY OF CHARGES

 

Possession of Cocaine with Intent to Distribute on Board a Vessel – Title 46, U.S.C., Section 70503

Maximum penalty: 40 years in prison and $5,000,000 fine

 

AGENCY

 

Drug Enforcement Administration

United States Coast Guard

 

 

Assistant U. S. Attorney Alessandra Serano (619) 546-8104

 

NEWS RELEASE SUMMARY – November 9, 2017

 

SAN DIEGO, CA – Anthony Khyree Dotson aka “Ant” was sentenced today to 120 months in prison and 10 years of supervised release for sex trafficking a 17-year old minor female while a fugitive for a prior federal conviction involving the same conduct. 

 

The case was initiated in April 2015 after a local high school counselor suspected that a student who attended the local high school was being trafficked. The counselor contacted the San Diego Police Department.  San Diego police detectives identified a vehicle that picked up the minor female from school and traced that vehicle back to Dotson, who was listed as an escapee from a halfway house in Los Angeles.  Dotson was serving the remainder of his federal prison sentence for a 2012 conviction for the same conduct involving two 16-year old minor females. 

 

In the current case, detectives identified an online ad for the minor on backpage.com in May of 2015 and called the number. A young female answered the call and directed the detective, posing as a customer, to a hotel in Mission Valley. Detectives observed Dotson with the minor in the parking lot of the hotel. The minor exited Dotson’s vehicle and directed the “customer” - an undercover officer, posing as a sex buyer - to a room where the minor was arrested.  Detectives located male clothing and used condoms in the trash can. The room was registered to Dotson and video surveillance showed Dotson checking into the room with the minor female wearing the same clothing found in the hotel room.  Dotson was apprehended waiting in his vehicle in the hotel parking lot.

 

United States District Judge Dana M. Sabraw, who sentenced Dotson for his prior offense, stated that he hoped Dotson “would move away” from this activity as he would be facing more significant prison time if he chose to engage in this offense in the future.  Sabraw noted that the penalties are harsh “for good reason” as the victims of these crimes are forever affected.  Assistant U.S. Attorney Alessandra P. Serano noted that the sentence imposed was more than double the amount of time Dotson received in 2012. 

 

“We will continue to work tirelessly with our law enforcement partners to detect and prosecute persons who engage in sex trafficking, a form of modern day slavery,” said Acting U.S. Attorney Alana Robinson.

 

“Every day, the FBI and our law enforcement partners at the Innocence Lost Task Force work to thwart these child predators.  In this case, it was an alert school counselor who noticed the signs of human trafficking and reported it to law enforcement,” said FBI Special Agent in Charge Eric S. Birnbaum.  “This case shows the community working together with law enforcement to combat this horrific crime.”

 

If you believe you are the victim of a trafficking situation or may have information about a potential trafficking situation, call the National Human Trafficking Resource Center (NHTRC) at 1-888-373-7888. NHTRC is a national, toll-free hotline, with specialists available to answer calls from anywhere in the country, 24 hours a day, seven days a week, every day of the year related to potential trafficking victims, suspicious behaviors, and/or locations where trafficking is suspected to occur.

 

This prosecution is the fruit of the collaborative work of the San Diego Police Department and the FBI’s Innocence Lost Task Force. 

 

DEFENDANTS                                Case Number: 17CR0638-DMS

 

Anthony Khyree Dotson aka “Ant”   Age: 26           San Diego, CA

 

SUMMARY OF CHARGES

 

Sex Trafficking of Children, Title 18 U.S.C. § 1591(a) and (b) – Maximum Penalties: life in prison, Sex Offender Registration

 

INVESTIGATING AGENCIES

 

San Diego Police Department

Federal Bureau of Investigation

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

 

NEWS RELEASE SUMMARY – November 6, 2017

 

SAN DIEGO –Abel Jose Perez of San Diego was sentenced today to twelve months and one day in federal prison for stealing $271,925.60 in Social Security retirement benefits intended for his father, who had died in 1997.  As Perez admitted when pleading guilty, instead of informing the Social Security Administration of his father’s death, Perez continued to take benefits that had been deposited into a bank account in his deceased parents’ names.  Soon after each month’s deposit from the Social Security Administration, Perez would forge his father’s signature on a bank check made payable to himself, and divert the funds for his own personal use.

 

The Social Security Administration pays retirement benefits to eligible retired workers, aged 62 or better, and to their eligible dependents.  Although the widow or the minor child of a deceased retiree can receive posthumous benefits, Perez, 55, admitted that in this case he knew he was not entitled to receive any of the money paid out by Social Security after his father’s death.  When entering his guilty plea on May 17, 2017, Perez admitted that for over sixteen years he retained exclusive access to and controlled a bank account belonging to his deceased parents, enabling him to illegally convert over a quarter-million dollars of public money to his own use.

 

Acting United States Attorney Alana W. Robinson commented, “The theft of Social Security benefits is a direct attack on the most vulnerable and needy members of our community.  Every dime of stolen benefits reduces the funds available to our retirees and other beneficiaries.”  Acting U.S. Attorney Robinson observed that while this was the largest single Social Security theft in the Southern District of California, the office has prosecuted a significant number of such cases in the past three years.  Moreover, she anticipated an increase in the office’s enforcement efforts designed to protect the public purse.

 

“The Social Security Administration’s Office of the Inspector General is pleased to see that this crime, which affects every individual relying on the Social Security Trust Fund for their retirement, was taken seriously and punished appropriately in this case,” said Robb Stickley, the Special Agent in Charge of the San Francisco Field Division, which is responsible for Southern California.  “We hope that this sentence sends a message that it is the responsibility of every individual in our society to protect their own retirement savings, and ensure that a loved one’s death does not go unreported.”

 

In addition to his prison sentence and period of supervised release, Perez was ordered to repay every dollar that he stole from the Social Security Administration.  At the conclusion of his sentencing hearing, Perez was remanded into custody to begin serving his prison sentence. 

 

DEFENDANT                       Case Number 17-cr-01259-WQH      

 

Abel Jose Perez                       San Diego, CA

 

SUMMARY OF CHARGES

 

Theft of Public Property – Title 18, U.S.C., Section 641

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

 

AGENCY

Social Security Administration’s Office of the Inspector General

Assistant U.S. Attorneys Matthew J. Sutton

and Adam L. Braverman (619) 546-8941 and (619) 546-6717

 

NEWS RELEASE SUMMARY – October 27, 2017

 

SAN DIEGO – Major Mexican drug cartel leader Sajid Emilio Quintero Navidad, aka Cadete, was arraigned in federal court on October 11, 2017, following his arrest by United States law enforcement at the San Ysidro Port of Entry on charges arising out of the Southern District of California. Quintero Navidad is the cousin of fugitive Mexican drug lord Rafael Caro Quintero and the associate of high-ranking Mexican cartel leader Ismael Zambada-Garcia, aka Mayo. He is believed to be one of the highest-ranking Mexican cartel leaders to be arrested in the United States.  

 

In August 2014, the Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Quintero Navidad as a “Special Designated Narcotics Trafficker,” pursuant to the Foreign Narcotics Kingpin Designation Act. As part of that designation, OFAC identified Quintero Navidad as a Mexico-based narcotics trafficker who coordinated the transportation of ton quantities of cocaine from South America through Mexico and onto the United States.

 

A federal grand jury in San Diego returned an indictment on September 22, 2017, charging Quintero Navidad with Conspiracy to Distribute Controlled Substances Intended for Importation, Conspiracy to Import Controlled Substances and Conspiracy to Launder Monetary Instruments. That same day, the Clerk of the Court issued a sealed warrant for his arrest. On October 11, 2017, Quintero Navidad was arrested at the San Ysidro Port of Entry, and on that same day, U.S. Magistrate Judge Jan M. Adler arraigned Quintero Navidad on these charges and unsealed the indictment against him.      

 

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

 

“Today is yet another reminder that there is no place to hide, because the Southern District of California, along with our law enforcement partners, will continue to pursue and prosecute international drug kingpins who for years profited from the shipment and sale of illegal drugs,” said Acting U.S. Attorney Alana Robinson. “With this action, one of the most significant drug traffickers in Mexico will be brought to justice.”

 

Acting U.S. Attorney Robinson also praised the outstanding work of the federal team from HSI Calexico / DEA Imperial County in the culmination of this investigation. Acting U.S. Attorney Robinson also thanked Customs and Border Protection, the U.S. Marshals Service, the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.

 

“The arrest of Sajid Emilio Quintero Navidad is a result of outstanding investigative work by HSI special agents in Calexico, in collaboration with our federal, state, local and international law enforcement partners,” said Dave Shaw, Special Agent in Charge of HSI in San Diego.  “HSI agents worked tirelessly to identify and arrest Mr. Quintero Navidad, underscoring our resolve to ensure he is brought to justice.”

 

“The arrest of Sajid Quintero-Navidad illustrates the great work that DEA and its law enforcement partners do every day,” said DEA San Diego Special Agent in Charge William Sherman. “This high level target will no longer be able to smuggle deadly drugs across our border.”

 

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.

 

DEFENDANT                                                                   Case Number 17CR2976-CAB                  

 

Sajid Emilio Quintero Navidad, aka Cadete               Age: 36                      Mexico City, Mexico

                       

SUMMARY OF CHARGES

 

Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.

 

Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.

 

Conspiracy to Launder Monetary Instruments, in violation of Title 18 U.S.C. § 1956. Term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release.

 

AGENCIES

 

Homeland Security Investigations

Drug Enforcement Administration

Customs and Border Protection, Office of Field Operations

United States Marshals Service

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

Department of Treasury, Office of Foreign Assets Control

Customs and Border Protection, Office of Border Patrol

Immigration and Customs Enforcement, Enforcement and Removal Operations

El Centro Police Department

Brawley Police Department

Imperial County District Attorney’s Office

Imperial Valley, Law Enforcement Coordination Center

 

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

SAN DIEGO – The U.S. Attorney’s office is prosecuting the first local case involving the seizure of carfentanil, the relatively new synthetic opioid that is 100 times stronger than Fentanyl and 10,000 times more potent than morphine.

 

The defendant, Sky Gornik, is accused of trafficking in carfentanil, fentanyl, ketamine and other drugs through the U.S. Mail over a period of several years. 

 

During a search of Gornik’s house in Clairemont, federal agents and local police found a wide variety of drugs, including a small baggie containing 1.77 grams of carfentanil - which experts say equates to about 86,000 fatal doses.

 

Agents also seized gel tablets containing fentanyl and methamphetamine. Agents learned that Gornik ordered these fentanyl gel tablets (approximately 600 units per week over the past two years) over the dark web from a dealer in Oklahoma.  The Oklahoma dealer purchased the fentanyl directly from China.

 

Federal agents seized $1.2 million in digital currency in that case. 

 

The U.S. Attorney’s Office is also prosecuting its first case involving the fentanyl precursor chemical known as “4ANPP.” This is the primary ingredient for manufacturing fentanyl. The 4ANPP precursor was mailed from China directly to locations in San Ysidro. Traffickers typically take the product from the U.S. into Mexico, where fentanyl is manufactured.  Once the traffickers manufacture the fentanyl with the 4ANPP, they attempt to smuggle the fentanyl back into the United States.

 

In the precursor case, a former Border Patrol agent, Cesar Daleo, was arrested and charged with drug crimes after he went to a post office box in San Ysidro to pick up a package containing 4ANPP.  But unbeknownst to the defendant, authorities were on to him. Customs and Border Protection agents at Los Angeles International Airport had intercepted the original package, which originated in China and was bound for San Ysidro. Homeland Security Investigations agents then replaced the 4ANPP with a harmless substance and waited for someone to pick it up.

 

Daleo was arrested soon after he picked up the package. According to charging documents, Daleo had picked up packages at the same location 13 previous times in the last year.

 

One kilogram of precursor 4ANPP was seized that day, but that amount could make approximately 25 kilograms of fentanyl in the possession of Mexican Drug Trafficking Organizations’ production labs.

 

DEFENDANT                                               Case Number 17cr2796

Sky Justin Gornik                                           Age: 37                       San Diego                  

SUMMARY OF CHARGES

 

Conspiracy to distribute fentanyl, in violation of 21 U.S.C. 841(a)(1), 846

Maximum Penalty:  20 years in custody; 3 years of supervised release; $250,000 fine; $100 special assessment

  

Possession with intent to distribute carfentanil, in violation of 21 U.S.C. 841(a)(1)

Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine

 

Possession with intent to distribute ketamine, in violation of 21 U.S.C. 841(a)(1)

Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine

 

DEFENDANT                                               Case Number                        

Cesar Daleo                                                     Age: 47                       San Diego                  

 

SUMMARY OF CHARGES

Conspiracy to possess listed chemical (4ANPP) knowing or having reasonable cause to believe that the listed chemical would be used to manufacture a controlled substance, fentanyl, in violation of 21 U.S.C. 841 (c) (2) and 846.

Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine

 

Attempted possession of listed chemical (4ANPP) knowing or having reasonable cause to believe that the listed chemical would be used to manufacture a controlled substance, fentanyl, in violation of 21 U.S.C. 841 (c) (2) and 846;

Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine

 

AGENCIES

 

Homeland Security Investigations

United States Postal Inspectors

San Diego Police Department

Drug Enforcement 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.

Acting U.S. Attorney Alana W. Robinson talks about the risks of Fentanyl and Carfentanil.

SAN DIEGO – The county’s top law enforcement officials issued a dire warning today about a dramatic surge in deaths and international trafficking activity related to Fentanyl and its even more deadly cousin, carfentanil.

 

While Fentanyl is 30-50 times more powerful than heroin, concern among law enforcers has intensified with the emergence of carfentanil, a drug 100 times stronger than fentanyl that is normally used as a sedative for animals like elephants. It only takes a few granules the size of grains of table salt to kill someone.

 

At a news conference today, officials reported a significant increase in fentanyl-related deaths in San Diego County since 2014 – which mirrors a national trend. In calendar year 2017, there have been 40 overdoses in the first nine months - more than all of 2016. And, the Medical Examiner has 11 more fentanyl cases pending confirmation, which would bring the number to 51 with three months to go. Across the country, more than 64,000 people have died as the result of an opioid overdose in 2016.

 

More than 75 percent of fentanyl seizures across the southwest border is coming through ports of entry in the Southern District of California from Mexico. Law enforcement officials have responded by seizing unprecedented quantities of fentanyl.

 

Federal seizures of fentanyl at the border in San Diego and Imperial counties have almost tripled since last year, from 19 to 54. The year before that, in 2015, there were only six seizures. That’s a 700 percent increase in two years.

 

Federal authorities, led by U.S. Customs and Border Protection and Homeland Security Investigations, confiscated 480 kilograms of illicit fentanyl at the border this year. That’s more than half a ton and almost double last year’s take. Just two years ago, authorities seized just 30 kilograms.

 

“This rapid increase in seizures and deaths tells us that we are on a very dangerous trajectory,” said Acting U.S. Attorney Alana Robinson. “There is no question that this is an epidemic with legs and it is sprinting. Every law enforcement agency in our community, whether federal, local or state, is on high alert. We will not allow San Diego and Imperial Counties to serve as a Fentanyl Gateway for the rest of the country. Nor will we allow Mexican cartels to capitalize on the opiate crisis.”

 

“A tiny amount of fentanyl can be lethal and today’s street buy can be tomorrow’s funeral,” District Attorney Summer Stephan said. “People buying drugs can’t be sure of what they’re really getting, making it a dangerous game of Russian roulette. Deaths due to unintentional combinations of drugs have roughly doubled in San Diego County in the last 15 years.”

 

“Homeland Security Investigations (HSI) San Diego Special Agents, together with our law enforcement partners, are working diligently to identify and ultimately dismantle the criminal organizations responsible for the transnational movement of these dangerous drugs,” said David Shaw, special agent in charge for HSI in San Diego. “HSI is committed to fully investigating and seeking prosecution of those individuals committing these crimes, in order to keep our communities safe and clear of these dangerous drugs.”

 

“Fentanyl is a dangerous substance, and we are not only concerned with keeping it out of our communities but also for the safety of our officers when they come into contact with it,” said San Diego CBP Director of Field Operations, Pete Flores.  “We are grateful for the collaborative efforts of our law enforcement partners to deliver consequences to those that smuggle fentanyl and for working to get this off of our streets.”

 

“Fentanyl is 30 to 50 times more potent than heroin which makes it one of the most deadly drugs on our streets today,” said San Diego Police Chief Shelley Zimmerman. “That is why we must get the word out to everyone. This is about saving lives and educating our community about the dangers of illegally using Fentanyl.”

 

“DEA is attacking the opioid crisis on two levels: arresting the people who are responsible for trafficking these deadly substances; and educating the public about the dangers of opioid abuse,” says DEA San Diego Special Agent in Charge William R. Sherman.  “This year, DEA has spoken at over 60 elementary, middle, high schools, and colleges in San Diego County and Imperial Counties reaching over 17,000 students, along with parent and community groups, and countless national and local media outlets to discuss the dangers of opioid abuse. DEA will continue its diligence in making our residents aware of the deadly danger these drugs pose.”

 

“Our collaborative efforts, through taskforces, sharing resources and intel, and leveraging expertise, are having an impact in neighborhoods across the country. There is a great deal yet to accomplish, as our nation struggles with this epidemic,” said Nichole Cooper, Inspector in Charge, Los Angeles Division, U.S. Postal Inspection Service. “Whether these illegal substances are sourced by smuggling, commercial shippers or the mail, the United States Postal Inspection is committed to working on behalf of American citizens, alongside our partners, to help safeguard communities and bring offenders to justice. We will continue to work with our law enforcement partners to get dangerous individuals and drugs off our streets.”

 

 “The Sheriff's Department is committed to collaborating with our local, state and federal law enforcement partners to address the national opioid epidemic,” said Sheriff’ Bill Gore. “By working together, law enforcement and our community partners can create new and effective solutions to save lives and stop this devastating crisis.”

 

“The opioid crisis gripping our nation has become far-reaching and widespread, touching every corner of the United States, including the greater San Diego area,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “IRS Criminal Investigation will not stand still while deadly synthetic drugs like fentanyl are sold on the streets, literally destroying our communities.  By fighting this epidemic, we are saving lives and sending a clear message that those who seek to profit by peddling poison will be put out of business and brought to justice.”

 

Here are a few more trends:

 

-Fentanyl trafficking is a very lucrative business. One kilogram of fentanyl costs about $32,000 and can be used to create a million counterfeit pills for a profit of more than $20 million.

 

-Users are ordering up fentanyl from the so-called “Dark Web” like they would order something from Amazon. The drug is being purchased online from China and sent directly to customers by mail or express delivery service in the U.S.

 

-Fentanyl is turning up in counterfeit oxycodone pills – agents in this district have seized over 20,000 counterfeit oxycodone pills containing fentanyl in 2017, protecting Southern California from Mexican cartels seeking to capitalize on the opiate crisis.

 

In one case this year, a Medical Examiner analyst studied a counterfeit Oxycontin 40 milligram pill found at the scene of an overdose; he literally found 20 different ingredients contained in the pill, including fentanyl.

 

“You may think you’re buying Oxy on the streets or from the web, but there’s no way to know what’s inside that pill,” said U.S. Attorney Robinson. “With every pill you purchase illicitly on the streets or through the web, and consume, you are gambling with your life. With every pill, you are making a potentially life-changing decision.  Because if you end up with a tainted dose, you are done.  You leave children behind, your parents behind, your spouses behind.”

 

The law enforcement community has taken this problem very seriously and developed a multi-level strategy that involves a number of approaches from different disciplines.

 

-The U.S. Attorney’s Office and its partners created a local Fentanyl Working Group in April. This is a multi-dimensional group that includes local, state and federal investigative agencies, toxicologists, the Medical Examiner’s Office, DEA Lab Chemists, first responders, plus local, county and federal prosecutors. This synergistic multi-disciplinary collaboration is a significant step in working together to promote streamlined investigations. 

 

The Fentanyl Working Group held an educational Fentanyl Forum on June 14 where more than 260 local and federal law enforcement officers learned about the dangers of encountering fentanyl in the field; the local smuggling trends from Mexico and China to the U.S.; parcel interdiction cases, prosecution of overdose cases in state and federal courts; and prosecution collaboration with our office and that of the District Attorney. A second Fentanyl Forum is scheduled on November 28, 2017. 

 

The Fentanyl Working Group is also committed to arming the community and first responders with the important information they need to stay safe.  Last week, for example, our office educated East County staff who work with Drug Endangered Children on fentanyl dangers, the importance of Naloxone, and available county resources.

 

The U.S. Attorney’s Office and District Attorney’s Office are working closely with the Medical Examiner’s Office on overdose cases involving fentanyl or carfentanil to trace the origin of these deadly substances and build possible murder cases against suppliers. The Working Group is advising law enforcement officers who respond to overdose cases to carry Naloxone and to investigate these situations as possible murder cases.

 

People who need help with mental health including alcohol or drug abuse, 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.

 

 

 

The following public officials are attending today’s press conference and are available for one-on-one interviews at the event’s conclusion:

 

Acting U.S. Attorney Alana Robinson

San Diego County District Attorney Summer Stephan

Homeland Security Investigations Special Agent in Charge David Shaw

Pete Flores, Director of Field Operations, San Diego, U.S. Customs and Border Protection

San Diego Police Chief Shelley Zimmerman

San Diego County Sheriff’s Commander Dave Moss

Acting Assistant Special Agent in Charge Adam Steiner, IRS Criminal Investigation

DEA Lab Director James Malone

Steven Campman, Chief Deputy Medical Examiner, San Diego County Department of the Medical Examiner

Assistant Inspector in Charge Eric Shen, US Postal Inspection Service

Postal Inspector Mark Hallisey, San Diego Field Office

 

Fentanyl Powerpoint Presentation

For Further Information, Contact: Assistant U.S. Attorney Lara A. Stingley (619)546-8403 or Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951

 

NEWS RELEASE SUMMARY – September 22, 2017

 

SAN DIEGO – Alexander David Faudoa, a recruiter of drug traffickers and alien smugglers from Imperial County, was sentenced in federal court today to 70 months in prison for conspiring to distribute cocaine and smuggle aliens. 

 

According to court records, Faudoa was responsible for the recruitment of drivers to transport undocumented aliens and narcotics from Mexico to locations in the United States, including California, Colorado, Kansas, and North Carolina. Faudoa communicated with his co-conspirators in Mexico and the United States in order to complete these crimes.

 

For example, Faudoa admitted that between June and July 2016, he coordinated the distribution of approximately 2.92 kilograms of cocaine between Kansas and California. Faudoa also admitted that in December 2016, he coordinated two separate events involving the transportation and harboring within the United States of approximately 19 undocumented aliens who had been successfully smuggled across the U.S./Mexico border in the Southern District of California. Each of these undocumented aliens was paying between $3,000 and $7,500 per person to be smuggled into the United States and transported to their final destination. Faudoa also admitted that he agreed to pay the drivers who were transporting the undocumented aliens a nominal fee – such as $400 to transport five undocumented aliens to their destination inside the United States.

 

The investigation was led by the Federal Bureau of Investigation with the assistance of U.S. Border Patrol. On March 1, 2017, a complaint was filed against Faudoa and an arrest warrant was issued.  Faudoa was arrested on March 17, 2017 attempting to enter the United States from Mexico through the Calexico, California, Port of Entry. Faudoa was taken into custody, where he has remained for the pendency of this case.   

 

Faudoa was sentenced today by U.S. District Judge Roger T. Benitez for one count of conspiracy to distribute cocaine and one count of conspiracy to commit alien smuggling.

 

Acting United States Attorney Alana W. Robinson said, “This defendant directed a vast network of drug and people smugglers across the country, and he did so audaciously and without regard for the well-being of his customers. This sentence means fewer people will be smuggled at great risk to their own safety, and fewer deadly narcotics on our streets.”

 

Acting United States Attorney Alana W. Robinson said, “This defendant directed a vast network of drug and people smugglers across the country, and he did so audaciously and without regard for the well-being of his customers. This substantial sentence will result in fewer people being smuggled at great risk to their own safety, and fewer deadly narcotics in the marketplace to harm our communities.”

 

FBI Special Agent in Charge Eric S. Birnbaum said, “Alexander David Faudoa played a key role in an organization trafficking in illegal drugs and people. Today's sentencing demonstrates how the FBI, in working with our law enforcement partners in the Imperial Valley, target and dismantle those trafficking organizations that threaten the safety and security of our nation.”

 

U.S. Border Patrol Chief Anthony Porvaznik stated, “United States Border Patrol agents enthusiastically work with all law enforcement partners to secure our nation and provide safety for everyone in our communities. The combination of the Border Patrol agents, Federal Bureau of Investigation and U.S. Attorney’s Office efforts in this case are an example of truly professional work to enforce our laws and enable positive outcomes.”

 

DEFENDANT                                   Criminal Case No. 17CR0923-BEN

Alexander David Faudoa                    Age: 27                       Citizenship: United States

CHARGES THAT FAUDOA WAS SENTENCED ON:

 

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

Maximum Penalties: mandatory minimum of 5 years in prison; maximum sentence of 40 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years

 

Count 2 – Conspiracy to Commit Alien Smuggling (18 U.S.C. § 371)

Maximum Penalties: maximum sentence of 5 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years

 

INVESTIGATING AGENCIES

 

Federal Bureau of Investigation

U.S. Border Patrol     

Assistant U. S. Attorneys Alessandra P. Serano (619) 546-8104 or Connie V. Wu (619) 546-8592

 

NEWS RELEASE SUMMARY – September 21, 2017

 

SAN DIEGO – A federal jury yesterday convicted Marlin Lee Gougher, a former substitute teacher in the Temecula School District and private tutor, of three counts of distribution, receipt and possession of child pornography.

 

Gougher possessed two laptop computers with over 300 videos of child pornography, some of which depicted children as young as four years of age. The FBI executed the search warrant of his Oceanside apartment in January 2013.

 

Gougher, who elected to appear in court wearing a prison issued orange jumpsuit, testified on his own behalf.  However, all of the testimony was stricken by United States District Court Judge William Q. Hayes as being non-responsive to any question posed.

 

“The jury has recognized the defendant for who he is – every parent’s nightmare,” said Acting U.S. Attorney Alana W. Robinson. “This trusted teacher and tutor with direct access to children was exploiting young victims in the worst way. I consider protecting the well-being of children to be our highest calling as prosecutors.”

 

“Each image Mr. Gougher possessed represented the victimization of a child.  This case is particularly disturbing given the defendant’s former position as a teacher and tutor.” said FBI Special Agent in Charge Eric S. Birnbaum.  “We hope this jury conviction sends a clear message to anyone involved in the online sexual exploitation of a child:   the FBI will not tolerate the victimization and destruction of our children’s future and will remain vigilant and committed to removing sexual predators from our children’s lives.”

DEFENDANT                                               Case Number 14cr0635-WQH                                            

Marlin Lee Gougher                           Age: 59           Oceanside, CA

 

SUMMARY OF CHARGES

 

Distribution and Receipt of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(2)

Maximum penalty: 20 years’ imprisonment with a mandatory minimum sentence of 5 years. Lifetime of supervised release

 

Possession of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(4)

Maximum penalty: 20 years’ imprisonment. Lifetime of supervised release

 

AGENCY

 

Federal Bureau of Investigation

 

 

NEWS RELEASE SUMMARY – September 21, 2017

 

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

 

SAN DIEGO – Ronald Fabor, the Operations Safety and Compliance Manager of Diamond Environmental Services, was convicted by a federal jury yesterday of two counts of perjury relating to his testimony before a grand jury.

 

The grand jury investigation involved allegations that Diamond had unlawfully discharged trucked portable toilet waste into municipal sewer systems at their facilities in violation of federal law. The trial jury found that Fabor falsely testified that the first time he learned that individuals at Diamond were dumping sewage into the municipal sewers (rather than taking it to the designated locations) was the date that federal search warrants were executed at the Diamond locations in San Diego and San Marcos.  The jury also convicted Fabor of falsely testifying that he had never personally observed Diamond trucks connected by hoses to the illegal sewer connections at the Diamond facilities.

 

Fabor was ordered to appear on January 8, 2018,at 9:00 am before the U.S. District Judge Roger T. Benitez for sentencing. 

 

In a related case (17cr1305-BEN), on June 1, 2017, Diamond Environmental Services LP pled guilty to mail fraud, for defrauding various municipalities of revenue relating to the fees for disposal avoided by the unlawful discharges.  On that same date, diamond owner Eric De Jong pled guilty to conspiring to violate the Clean Water Act for his role in the dumping.  Earlier, on May 24, 2017, Diamond Chief Operating Officer Warren Van Dam had also pled guilty to participating in the same conspiracy. Diamond, De Jong and Van Dam are scheduled to be sentenced by U.S. District Court Judge Benitez on November 13, 2017, at 9:00 am

 

“Mr. Fabor delivered false testimony to a grand jury about illegal pollution that put public health and safety at risk,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California.  “Providing honest testimony is a fundamental necessity of our legal system and is critical to EPA's ability to protect public health and the environment.”

 

DEFENDANT                                   Criminal Case No 17cr1064-BEN

 

Ronald B. Fabor                                  Age: 55                                  

San Marcos, California

 

SUMMARY OF CHARGES

 

Perjury, 18 U.S.C. § 1621

Maximum penalty: 5 years’ prison and/or a fine of $250,000

 

AGENCIES

 

Federal Bureau of Investigation

U.S. Environmental Protection Agency, Criminal Investigation Division

 

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

and Michelle L. Wasserman (619) 546-8431

 

NEWS RELEASE SUMMARY – September 18, 2017

 

SAN DIEGO – A second man, Perris resident Eriberto Paniagua, has been charged in the smuggling of a Bengal tiger cub into the United States from Mexico on August 23, 2017.

 

Paniagua, who allegedly told officials at the Otay Mesa Port of Entry that the Bengal tiger cub at his feet was merely a “cat,” was indicted by a federal grand jury and made his first court appearance today.

 

According to the indictment unsealed today, Paniagua conspired with the driver of the car, Luis Valencia, and others to knowingly import a tiger cub into the United States. Both defendants are charged with one count of conspiracy and one count of smuggling contrary to law.

 

All species of tigers are listed as endangered under the Endangered Species Act, and are protected under Appendix I of the Convention on International Trade in Endangered Species.  To legally import an endangered species into the United States requires a permit from the U.S. Fish & Wildlife Service, and the importation must be accompanied by a Declaration Form 3-177 filed with Fish & Wildlife. 

 

The Bengal tiger (Panthera tigris tigris) is the most populous subspecies of tiger. The Bengal tiger is native to India, Bangladesh, Nepal and Bhutan. According to the World Tiger Recovery Project, there are only 2,500 wild specimens on earth and the population of Bengal tigers is decreasing.

 

During today’s arraignment, Paniagua was released on a $25,000 personal surety bond and ordered to appear for a motion hearing/trial setting October 16, 2017 at 2:00 pm before U.S. District Judge Anthony J. Battaglia.

 

DEFENDANTS                                             Criminal Case No. 17CR2856-AJB

 

Luis Eudoro Valencia                                     Age: 18                                   Perris, California

Eriberto Paniagua                                           Age: 21                                   Perris, California

 

SUMMARY OF CHARGES

 

Conspiracy 18 U.S.C. § 371

Maximum penalty: 5 years’ prison, fine of $250,000

 

Smuggling/Importation Contrary to Law, 18 U.S.C. § 545

Maximum penalty: 20 years’ prison, fine of $250,000, or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the, five years of supervised release.

 

AGENCIES

 

U.S. Fish & Wildlife Service

Homeland Security Investigations

 

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

 

Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Andrew P. Young (619) 546-7981

 

NEWS RELEASE SUMMARY – September 19, 2017

 

SAN DIEGO – Financial executive Peter Cash Doye and notary public and real estate broker Raquel Reid were indicted today for their alleged roles in a massive scheme that generated nearly $50 million in fraudulently-obtained loan proceeds.

 

According to the indictment, the defendants defrauded lenders into making enormous loans against four multi-million dollar mansions in La Jolla and Del Mar, then used forged documents to make it appear  that the loans had been paid off – thereby enabling them to secure additional loans from new lenders who believed the mansions were owned “free and clear.”

 

According to the indictment, Doye, a senior executive at the real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), negotiated the financing from unsuspecting lenders and investors based on a host of lies about the collateral used to secure the loans.  To pull of the scam, Doye, Reid, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, wreaking havoc on the chain of title for these homes.  Reid notarized the forged documents, helping to make the fraudulent paperwork appear authentic.  

 

Doye’s business partner Courtland Gettel and Arizona attorney Jeffrey Greenberg have each pleaded guilty to participating in the scheme. According to their plea agreements, Gettel was the owner of Conix and VCRE, which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.

 

As part of his guilty plea in 2016, Gettel admitted that he and Doye acquired the high-end homes in La Jolla and Del Mar by claiming they would be used as luxury rentals and investment properties—although in fact, Gettel and Doye lived in the properties along with their families. When they needed money to fund other business deals, Gettel and Doye began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.  Greenberg admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals. 

 

In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless.  In response to questions from these lenders, Doye, Reid and Gettel agreed to falsely deny knowing anything about the fraudulent loans, and created yet more fraudulent documents to cover their tracks. For example, Reid destroyed her notary book and cut up her notary stamp, and then falsely reported to the California Secretary of State that it had been lost.

 

But the group defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their interests and resulting in tens of millions of dollars in losses from unpaid loans.  As part of their pleas, Gettel and Greenberg must forfeit the proceeds they stole from the various lenders and pay restitution to the victims.  Doye and Reid were charged with criminal forfeiture as part of the indictment.

 

Gettel has also admitted that after his guilty plea and while he was awaiting sentencing, he arranged even more fraudulent real estate transactions.  He has agreed to recommend a correspondingly higher sentence as a result of his ongoing fraud.  Gettel is scheduled to be sentenced before U.S. District Judge William Q. Hayes on October 17, 2017, at 10:00 am.  Greenberg was disbarred from practicing law in Arizona on October 6, 2016.  Greenberg is scheduled to be sentenced before U.S. District Judge William Q. Hayes on October 2, 2017, at 9:00 am.

 

Doye and Reid are expected to make their initial appearances before U.S. Magistrate Judge Karen S. Crawford on September 21, 2017 at 2:00 pm. 

 

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

 

DEFENDANTS

 

Peter Cash Doye                                             Age: 41                       San Diego, CA

Raquel Reid                                                    Age: 38                       San Diego, CA

 

CHARGES

 

Count One (both defendants): Wire and Mail Fraud Conspiracy, in violation of 18 U.S.C. § 1349

Counts Two through Six (Doye only; both defendants as to Count Three): Wire Fraud, in violation of 18 U.S.C. § 1343

Counts Seven through Nine (Doye only as to Count Seven, both defendants as to Counts Eight and Nine): Mail Fraud, in violation of 18 U.S.C. § 1341

Maximum Penalties per count: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution

 

Counts Ten and Eleven (both defendants): Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A

Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.

 

Count Twelve (Reid only): False Statements to Federal Agents, in violation of 18 U.S.C. § 1028A

Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.

 

DEFENDANTS PREVIOUSLY CHARGED

 

Jeffrey Greenberg, 16CR1076-WQH and 1077-WQH          Age: 67           Tucson, AZ

Courtland Gettel, 16CR1099-WQH                                       Age: 43           Coronado, CA

 

Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349

Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.

 

AGENCIES

 

Federal Bureau of Investigation

 

Special Assistant U.S. Attorney Ari Fitzwater (619) 546-8756, Assistant U. S. Attorney Joshua Jones (619) 546-9744, Assistant U. S. Attorney Connie Wu (619) 546-8592

 

NEWS RELEASE SUMMARY – September 20, 2017

 

SAN DIEGO – The U.S. Coast Guard’s announcement today that it has intercepted a record amount of illicit drugs in the Eastern Pacific Ocean in FY2017 includes a San Diego-based prosecution involving more than 6,000 pounds of cocaine confiscated from a low-profile vessel.

 

The U.S. Coast Guard encountered the vessel in international waters, approximately 450 nautical miles southwest of the Guatemala/El Salvador border on August 14 and detained four individuals following discovery of the cocaine. Low-profile vessels are designed to ride low in the water to avoid detection.

 

A federal grand jury returned an indictment in the Southern District of California on September 1, charging four men with possession of cocaine with intent to distribute onboard a vessel. According to the indictment, approximately 6,349.20 pounds of cocaine (totaling over three tons) was confiscated from the vessel. The defendants remain in custody pending trial.  The defendants will appear for a motion hearing and trial setting before U.S. District Judge John A. Houston on October 16.

 

At today’s event attended by Attorney General Jeff Sessions, the 140-person crew of the Coastguard Cutter Stratton offloaded 50,000 pounds of cocaine and heroin - with an estimated street value of more than $679 million – that was seized in the Eastern Pacific Ocean since August 2.

 

“By preventing overdoses and stopping new addictions before they start, enforcing our drug laws saves lives,” Attorney General Jeff Sessions said. “This record-breaking year by our Coast Guard saw the arrest of more than 500 suspected drug traffickers and kept nearly half a million pounds of dangerous drugs from getting to our streets--and ultimately to our neighbors, friends, and families. I commend every service member who has helped us in our mission to keep the American people safe, and I thank them for this indispensable contribution to public safety.”

 

“The seizure of this cocaine means tens of thousands of pounds won’t make it to our communities and hundreds of millions of dollars won’t make it into cartel coffers,” said Acting U.S. Attorney Alana Robinson. “To drug traffickers who may think they are invisible in the middle of what seems to be a vast, empty ocean: You are not alone. We are doing everything we can to prevent you from using the high seas as your personal freeway.”

 

The Coast Guard has interdicted several low-profile vessels since June. Low-profile vessels are specifically designed for smuggling illicit cargo such as drugs, weapons and cash. These smuggling vessels have multiple outboard motors to allow them to travel at high speeds and are painted to blend with the water to avoid detection from military and law enforcement authorities operating in the region.

 

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.

 

DEFENDANTS                                                        Case Number 17cr2603                                           

Edinson Elias Castillo-Bustos                                    Age: 56                                   Colombia

Redis Mina-Canga                                                      Age: 50                                   Colombia

Edgar Anibal Rojas-Vanegas                                      Age: 31                                   Guatemala

Jose Sebastian Ardila-Meza                                        Age: 48                                   Colombia

 

SUMMARY OF CHARGES

 

Conspiracy to Distribute Cocaine on Board a Vessel  – Title 46, U.S.C., Sections 70503 and 70506(b)

Maximum penalty: Life in prison and $10,000,000 fine

 

Possession of Cocaine with Intent to Distribute on Board a Vessel – Title 46, U.S.C., Section 70503

Maximum penalty: Life in prison and $10,000,000 fine

 

AGENCY

 

Drug Enforcement Administration

United States Coast Guard

 

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

 

Assistant U. S. Attorneys Joshua Mellor (619) 546-9733 and Francis A. DiGiacco (619) 546-6771

 

NEWS RELEASE SUMMARY – September 14, 2017

 

SAN DIEGO – Five alleged members of a San Diego-based drug trafficking cell, including alleged leader Jaime Ivan Mendez-Maciel, were arrested yesterday and made their first appearances in federal court yesterday and today.

 

According to the indictment and search warrants, Mendez-Maciel operated a series of drug stash houses in San Diego and coordinated the importation and distribution of hundreds of pounds of methamphetamine and cocaine through the Southwest Border destined for various cities throughout the United States.

 

Drug Enforcement Administration agents began investigating the drug trafficking organization cell in October of 2016. Throughout the investigation, DEA agents seized over a hundred pounds of methamphetamine, fifty pounds of cocaine, and several assault rifles and pistols.

 

Mendez-Maciel, Juan Garcia and Nallely Tanairi Garcia were arraigned on Wednesday before U.S. Magistrate Judge William Gallo. Armando Martin Lopez-Estrada and Daniel Bravo were arraigned today. The defendants are scheduled to appear for a detention hearing on Friday, September 15 at 10 a.m. before Judge Gallo.

 

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.

 

DEFENDANTS                                         Case Numbers: 17CR2726-LAB and 17CR2727-LAB

Jamie Ivan Mendez-Maciel                       Age: 41                            San Diego

Jesse Cortes – fugitive                               Age: 20                            San Diego

Juan Garcia                                                Age: 19                            San Diego

Nallely Tanairi Garcia                               Age: 25                            San Diego

Armando Martin Lopez-Estrada                Age: 31                            San Diego

Daniel Bravo Age: 36 San Diego

 

SUMMARY OF CHARGES

 

 

Title 21, U.S.C., Secs. 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine and Cocaine;

Title 21, U.S.C., Secs. 952, 960, and 963 - Conspiracy to Import Methamphetamine and Cocaine;

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

Title 21, U.S.C., Sec. 952 and 960 - Importation of Methamphetamine and Cocaine;

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

 

AGENCY

 

Federal Bureau of Investigation

Homeland Security Investigations

Customs and Border Protection

Internal Revenue Service

San Diego Police Department

California Highway Patrol

Alcohol, Tobacco, and Firearms

United States Marshals Service

 

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

For Further Information, Contact: Assistant U.S. Attorney Adam Braverman (619) 546-6717

 

NEWS RELEASE SUMMARY – September 13, 2017

 

SAN DIEGO – Jose Rafael Camacho-Ontiveros, the alleged leader of a Mexican heroin trafficking organization, was extradited to the United States by Mexico yesterday and made his first appearance in federal court this afternoon.

 

A federal grand jury in San Diego returned an indictment on October 14, 2011, charging Camacho-Ontiveros and 11 other alleged members of the Mexican heroin trafficking organization. Camacho-Ontiveros was charged with Engaging in a Continuing Criminal Enterprise, Conspiracy to Distribute Heroin and Conspiracy to Commit Money Laundering. That same day, the Clerk of the Court issued a sealed warrant for his arrest. Six defendants remain fugitives.

 

In February 2010, Drug Enforcement Administration agents began investigating a Mexican drug trafficking organization that smuggled white heroin across the Southwest Border destined for various cities along the East Coast. The organization’s preferred smuggling method was to place the heroin in the soles of its couriers’ shoes. In total, DEA agents intercepted thirty-eight telephones during this year-long investigation resulting in fourteen heroin and money seizures throughout the United States.

 

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

 

Acting United States Attorney Alana Robinson stated, “Greedy drug traffickers are saturating our country with heroin, and the results are devastating. We will continue to aggressively pursue those responsible for the opioid crisis in the United States.”

 

“This country is in the midst of the worst opioid epidemic in history,” says DEA San Diego Special Agent in Charge William R. Sherman. “This case highlights DEA’s commitment to battling against the people who created this epidemic and have done so out of simple greed.”

 

Camacho-Ontiveros was flown by the United States Marshals Service from Mexico City to San Diego on September 12, 2017. He was arraigned on Wednesday, September 13, 2017, before U.S. Magistrate Judge William Gallo. The defendant is scheduled to appear for a detention hearing on Friday, September 15 at 9:45 a.m. before Judge Gallo.

 

DEFENDANT                                                                              Criminal Case No. 11-CR-4701-DMS

 

Jose Rafael Camacho-Ontiveros, aka Rafa

 

SUMMARY OF CHARGES

 

Count 1: Title 21, United States Code, Section 848(a) – Engaging in a Continuing Criminal Enterprise

 

Count 2: Title 21, United States Code, Sections 841(a)(1) and 846 – Conspiracy to Distribute Heroin

 

Count 3: Title 18, United States Code, Sections 1956(a)(2)(A) and (h) – Conspiracy to Commit Money

Laundering

 

INVESTIGATING AGENCIES

 

Drug Enforcement Administration

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

 

 

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

 

 

 

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

 

NEWS RELEASE SUMMARY – September 11, 2017

 

LOS ANGELES – A Manhattan Beach attorney was sentenced today to nine months in federal custody after being convicted at trial for embezzling over a quarter-million dollars from his former employer, MWRC Internet Sales LLC (“MWRC”), and filing false tax returns. James (“Jim”) Miller, a former regional counsel at the Securities Exchange Commission’s Los Angeles office and former real estate investor, was convicted in June of five felony counts of wire fraud and four counts of filing a false tax return. In addition to serving nine months in jail, the sentence imposed today by Judge George Wu requires Miller to pay the Internal Revenue Service $64,329 in restitution, $900 special assessment, and two years of supervised release.

 

According to the evidence presented at trial, James Miller was the president and co-managing partner of MWRC Internet Sales LLC, an Internet sales company that was founded in approximately 2000 in order to provide manufacturers and local brick-and-mortar retailers a way to share in the profit from online sales. As part of his duties, Miller had check signing authority for MWRC’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself, embezzling more than $300,000 from the company. Miller used this money to pay for personal expenses and debts, and did not report it on his personal tax returns for 2009 through 2012, causing a tax loss of approximately $64,000.

 

According to the evidence at trial, Miller’s conduct of writing unauthorized checks was first revealed when Miller and Russell Lesser, Miller’s co-managing partner and MWRC’s primary investor, were preparing annual financial statements in March 2011. Evidence at trial revealed that Lesser allowed Miller, his long-time friend, to continue as co-managing partner of MWRC based on Miller’s promise to never engage in the conduct again and to pay MWRC back the stolen funds. Lesser, who had been loaning Miller $3,000 per month to help Miller in a financially difficult time, continued to provide Miller the personal loan of $3,000 per month, and directed Miller to use that money to start repaying MWRC. Evidence at trial showed that although Miller did stop embezzling money for two months, he began writing checks to himself again in May of 2011 despite his promise to Lesser not to do so.

 

The evidence at trial showed that although Miller did repay MWRC $95,500 between 2009 and 2012 during the course of his embezzlement, he received from Lesser personal loans totaling $108,000 during the same time period. Evidence at trial also showed that Miller falsified MWRC’s check register to hide his criminal conduct. Specifically, evidence at trial showed that Miller made numerous false entries on the check register indicating that checks were transfers to another MWRC bank account (the most common use of the account) when in fact the checks were written to Miller himself and deposited in his own personal bank account.

 

The Court rejected Miller’s request for a sentence of probation based on his community service, noting that “the commission of some good works is not a get out of jail card.”

 

The case was prosecuted by Southern District of California Assistant United States Attorney Rebecca Kanter, acting as a Special Attorney, and Trial Attorney Benjamin Weir of the Tax Division.

 

Southern District of California Acting United States Attorney Alana W. Robinson, stated that “This case was aggravated by the fact that Miller was not only an attorney, but a former regional counsel for the Securities Exchange Commission. Given the defendant’s duty of candor, his numerous outlandish claims during his trial testimony makes this crime particularly offensive. Corporate executives such a Miller should understand that stealing from their employer is not “merely a business dispute,” but serious felony conduct that will be investigated and prosecuted.

 

“Defendant Miller abused his position of trust and continuously lied to his colleagues for personal gain,” said Danny Kennedy, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our federal partners will continue to work together to hold accountable offenders who commit major financial crimes that impact individual businesses and taxpayers.”

 

“Miller allowed greed to color his judgment and now he will be paying the price,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “Today’s sentencing reinforces our commitment to every American taxpayer to vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”

 

DEFENDANT                                            Case Number 14CR0471-GW

James Miller                                                Age: 68           Manhattan Beach, CA

 

SUMMARY OF CHARGES

 

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

False Statement on Tax Return – Title 26, U.S.C., Section 7206(1)

 

AGENCY

 

Federal Bureau of Investigation, Los Angeles Division

Internal Revenue Service, Criminal Investigations

 

 

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

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – September 12, 2017

 

SAN DIEGO – A former U.S. Navy Commander was sentenced yesterday to 18 months in prison for lying to investigators to conceal his illicit decades-long relationship with Leonard Glenn Francis, the foreign defense contractor at the center of a colossal bribery and fraud scandal.

 

David Kapaun, former U.S. Navy Commander and later the civilian Deputy Chief of Staff at Special Operations Command, Pacific, at Camp Smith, Aiea, Hawaii, pleaded guilty to one count of making false statements on June 6, 2017, admitting that he lied on his security clearance application forms regarding his relationship with Francis, owner of Singapore-based Glenn Defense Marine Asia. The company provided ship husbanding services such as trash and sewage removal, food, water, security and fuel to U.S. Navy ships.

 

According to the government’s sentencing memo, Kapaun received at least as much as $50,000 in illicit goods and services from Francis since 2001. The long history between the two men involved many late nights of partying at nightclubs and karaoke bars, fine dining, and prostitutes – all paid for by Francis. For his part, Kapaun performed numerous and varied official acts for GDMA, including providing classified schedules of U.S. Navy ship port visits. Acknowledging the staggering breadth and duration of Kapaun’s activity on GDMA’s behalf, Francis referred to him as GDMA’s “comms center, strategist, and ops center.”

 

Conscious of the illegality of his actions, Kapaun was always careful to conceal the nature of his relationship with and his receipt of things of value from Francis. Kapaun, for example, created a fake name, Dave McIntosh, and a sham email address to disguise his identity and avoid the detection of law enforcement. Kapaun and Francis also used coded terminology when discussing their illicit activities.

 

In addition to the 18 months in prison, Kapaun was also sentenced to pay a fine in the amounts of $25,000, as well as restitution to the U.S. Navy in the amount of $50,000 and perform 200 hours of community service work following his release.

 

“Today’s sentence underscores the breadth and scope of this unprecedented investigation,” said Acting U.S. Attorney Alana W. Robinson. “We will continue to investigate and prosecute all who greedily feather their own beds in dereliction of the obligations to the United States.”

 

Twenty-eight individuals, including 21 current and former Navy officials and five civilian defendants, plus GDMA, the corporation, have been charged so far as part of the massive fraud and bribery investigation. Nineteen of these defendants have pleaded guilty. Nine defendants await trial.

 

The Defense Criminal Investigative Service, Naval Criminal Investigative Service and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California, Assistant U.S. Attorney Ken Sorenson of the District of Hawaii, and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

 

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

 

DEFENDANT                                          Case Number: CR-1700333-SOM

 

David Michael Kapaun                             Age 58                         Wahiawa, HI

 

SUMMARY OF CHARGES

 

False Statements, in violation of 18 U.S.C. § 1001

Maximum Penalty: Five years in prison

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency