Southern District of California

Assistant U. S. Attorneys Michael J. Heyman (619) 546-9615 and Joseph J.M. Orabona (619) 546-7951

 

NEWS RELEASE SUMMARY – September 11, 2017

 

SAN DIEGO – J. Douglass Jennings, a practicing accountant and disbarred California attorney, pleaded guilty today to one count of Bankruptcy Fraud (Concealment of Assets) and one count of Tax Evasion.

 

Mr. Jennings, a Certified Public Accountant (CPA) and former attorney, once touted in a commercial that he managed “one of the nation’s leading estate and tax planning law firms.” He appeared on talk-shows and authored two books, including what he claimed in court filings was “highly regarded and one of the best and most complete estate planning treatises to date.” Mr. Jennings also practiced what he described in an advertisement as a “faith-based” approach to financial planning, with some referring to him as “Uncle Doug.”

 

In his plea agreement, Mr. Jennings admitted that, beginning in January 2010, he devised a scheme to defraud his unsecured creditors by concealing numerous assets, and then filed a voluntary bankruptcy petition in the United States Bankruptcy Court for the Southern District of California, In re J. Douglass Jennings, Jr. and Peggy L. Jennings, Case No. 11-04720, in furtherance of that scheme. Mr. Jennings further admitted that, in his bankruptcy filings, he defrauded his unsecured creditors by intentionally concealing the following assets and income valued at nearly $1.5 million, including:

 

• A stock interest in a real-estate venture valued at approximately $1 million;

• A 53.2 foot luxury yacht known as the “Sea Eagle” valued at approximately $150,000; and

• Antique silver items valued at approximately $165,139.

 

During the pendency of the bankruptcy case, Mr. Jennings additionally obtained salary payments and other benefits prohibited by the Bankruptcy Court in the amount of $138,694.

 

In total, Mr. Jennings caused unsecured creditors to lose $1,453,833 as a result of his bankruptcy fraud.

 

Mr. Jennings also pleaded guilty to evasion of tax payments. From August 2011 through April 2013, Mr. Jennings had a tax due and owing to the Internal Revenue Service (“IRS”) for calendar years 2005 through 2009 totaling approximately $2,852,545. He originally agreed to pay this amount to the IRS. Mr. Jennings also consented to pay a civil fraud penalty in the amount of $2,031,837, and interest in the amount of $1,042,711. Notwithstanding this agreement, however, Mr. Jennings attempted to evade and defeat the payment of taxes, penalties, and interest through his concealment of assets in his bankruptcy case. As a result, Mr. Jennings pled guilty to evasion of tax payments and admitted that a criminal judgment should be entered against him in the amount of $5,927,093.

 

On August 16, 2017, Mr. Jennings’ wife, Peggy Jennings, pled guilty to bank fraud in a related action, United States v. Peggy L. Jennings, Case No. 17CR2306-BEN. Mrs. Jennings admitted as part of her scheme to defraud the bank that she forged her mother’s signature on loan documents, fraudulently transferred funds into her mother’s bank accounts to make it appear that her mother had substantial income, submitted false documents to the bank, and intended to cause the bank losses exceeding more than $226,000. Pursuant to her plea agreement, Mrs. Jennings has agreed to pay restitution to the bank in the amount of $145,481.71 and to pay a fine in the amount of $50,000. Mrs. Jennings is scheduled to be sentenced before the Honorable Roger T. Benitez on November 13, 2017.

 

Following Mr. Jennings’ guilty plea to the bankruptcy and tax fraud charges, the Court set a sentencing hearing before U.S. District Judge Roger T. Benitez on December 11, 2017.

 

“Concealing assets compromises the very core of our bankruptcy system, which is designed to protect both debtors and creditors,” stated Acting U.S. Attorney Alana W. Robinson. “A bankruptcy petitioner who fails to make a full good faith disclosure risks a variety of serious consequences, including criminal prosecution.”

 

“Bankruptcy fraud threatens the integrity of the bankruptcy system, as well as public confidence in that system,” stated Tiffany L. Carroll, Acting U.S. Trustee for the Southern District of California, Hawaii, Guam, and the Northern Mariana Islands (Region 15). “I am grateful to Acting U.S. Attorney Robinson, our law enforcement partners, and the chapter 7 bankruptcy trustee for their commitment to combating bankruptcy-related crimes.” The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 15 is headquartered in San Diego with an additional office in Honolulu.

 

“Bankruptcy fraud harms creditors and erodes confidence in the federal bankruptcy system,” commented FBI Special Agent in Charge Eric S. Birnbaum. “Truth must be at the core of any bankruptcy and individuals who hide their assets during bankruptcy cases are defrauding their creditors. The FBI will reveal the truth and in this case, exposed the concealment of more than $1.4 million in assets and income.”

 

“Mr. Jennings’ attempt to discharge nearly $6 million of tax debt through a fraudulent bankruptcy filing was a theft from the American public. It is a felony offense that carries severe consequences,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “IRS Criminal Investigation will continue to protect the integrity of the tax system by ensuring everyone pays their fair share.”

 

The criminal investigation involving Mr. and Mrs. Jennings arose out of a referral from the U.S. Trustee based upon findings from the Bankruptcy Court that Mr. and Mrs. Jennings engaged in fraud during their bankruptcy proceedings.

 

DEFENDANT                                     Case Number 17CR2722-BEN

Douglass Jennings, Jr.                          Age: 72            Rancho Santa Fe, CA

 

SUMMARY OF CHARGES FOR J. DOUGLASS JENNINGS:

 

Bankruptcy Fraud – Title 18, U.S.C., Section 152(1)

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

 

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

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

 

DEFENDANT                                      Case Number 17CR2306-BEN

 

Peggy L. Jennings                                 Age: 72            Rancho Santa Fe, CA

 

SUMMARY OF CHARGES FOR PEGGY L. JENNINGS:

 

Bank Fraud – Title 18, U.S.C., Section 1344

Maximum penalty: 30 years’ imprisonment and $250,000 fine

 

AGENCIES

 

Federal Bureau of Investigation

Internal Revenue Service

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

 

NEWS RELEASE SUMMARY – September 11, 2017

 

Former bookkeeper Claude Theodore Riley pleaded guilty today to wire fraud and making a false tax return in a five-year scheme stealing from his employer, a local 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.

 

“Defendant egregiously abused a sensitive position of trust when he stole more than $272,000 from an Imperial Valley farm and filed fraudulent tax returns,” stated Acting U.S. Attorney Alana W. Robinson. “I commend our federal and local law enforcement partners’ diligent efforts to obtain justice for this local farm, which is one of many that serve as the economic backbone of Imperial Valley.”

 

“Spanning more than five years, Mr. Riley stole funds by issuing unauthorized checks from his employer’s bank account and depositing them to his personal bank account,” stated R. Damon Rowe, Special Agent in Charge of IRS Criminal Investigation. “Our office will vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”

 

“The FBI is committed to uncovering fraud schemes that affect our community,” said FBI Special Agent in Charge Eric S. Birnbaum. “The financial stability of Imperial Valley’s agricultural businesses are essential to the local economy. Crimes that undercut the hard work of our Valley’s farming industry will not be tolerated.”

“This case is a great example of how local and federal law enforcement agencies can work together to protect and serve the community,” said Brawley Police Department Interim Chief of Police Kelly L. Brown. “The Brawley Police Department thanks the Federal Bureau of Investigations for their assistance.”

 

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

 

 

A Manhattan Beach, California resident was sentenced to nine months in prison for wire fraud and filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson for the Southern District of California.

 

According to the evidence presented at trial, James Miller, a California attorney, was the president and managing partner of MWRC Internet Sales LLC, an online sales company. As part of his duties, Miller had check signing authority for the company’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself from MWRC’s account, embezzling more than $300,000. Miller used this money to pay for personal expenses and did not report it on his individual tax returns for 2009 through 2012, causing a tax loss of approximately $58,000.

 

In addition to the term of prison imposed, U.S. District Judge George Wu ordered Miller to serve two years of supervised release and to pay $64,329 in restitution to the Internal Revenue Service (IRS).

 

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of FBI and IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Benjamin Weir of the Tax Division, who prosecuted the case.

 

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

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

 

NEWS RELEASE SUMMARY – September 6, 2017

 

SAN DIEGO – A well-organized and often violent group of thieves has stolen more than $20 million worth of merchandise from high-end shopping malls here and around the country, according to an indictment unsealed today which charges 22 people.

 

A contingent of more than 250 officials from local, state and federal law enforcement agencies made 12 arrests today and searched three homes in Lemon Grove, Chula Vista and San Diego. Three defendants were already in custody; seven were fugitives as of 1 p.m. today. The defendants in custody are scheduled to make their first court appearances at 10 a.m. tomorrow before U.S. Magistrate Judge Barbara Lynn Major.

 

During searches today, agents confiscated approximately $30,000 in cash plus about a dozen large trash bags full of new clothing - with merchandise tags and security devices still attached - from retailers such as Victoria’s Secret, Hollister Co., Guess, Express and Abercrombie & Fitch, and brands such as Calvin Klein, Hurley, Armani, Adidas, Kenneth Cole and Puma. Agents also found piles of new Louis Vuitton shoes and boxes full of security sensors that had been removed from clothing.

 

The indictment describes how defendants from the San Diego area formed crews of thieves to steal merchandise from retail stores throughout the United States and transport the merchandise across state lines for sale in Mexico. The well-organized teams operated consistently for over a decade. The indictment describes how team leaders assigned each member a specific role, such as team leader, mule or blocker. Team leaders selected stores to target, scouted the stores, and choreographed the actions of other team members using cell phones and hand signals while Mules secreted the stolen merchandise out of stores in “booster bags,” which are shopping bags with metallic linings designed to defeat anti-theft sensors. Blockers prevented store employees from seeing the ongoing theft by obstructing their view with clothing, by distracting the employees, or by physically preventing the employees from responding.

 

When necessary, the teams used force against store employees, other customers, and law enforcement to escape. For example, the indictment alleges that in November 2009, defendant Sergio Manuel Montano Nava knocked over an infant in its stroller and injured the infant’s father to avoid being arrested for a theft at a Hollister store in Schaumburg, Illinois.

 

In November 2012, defendants Jose Damazo Herrera, Robin Macias and others drove vehicles through a crowd while fleeing a theft from a Hollister store in the Fashion Valley Mall in San Diego. The thefts alleged in the indictment typically resulted in losses of several thousand dollars in merchandise.

 

In March 2013, a defendant grabbed a loss prevention officer by the throat and threw her to the ground while running from a theft at Abercrombie & Fitch at the Plaza Bonita Mall in National City.

 

The indictment lists 38 thefts which occurred at locations around the country at various clothing stores, including Victoria’s Secret, Hollister Co., Abercrombie & Fitch, Banana Republic and Express in the California cities of Escondido, San Diego, National City, San Clemente, Ventura, Oxnard, Camarillo, City of Industry, Orange, Mission Viejo, Northridge, Canoga Park; and outside the state in Las Vegas, Nevada; Frederick, Maryland; Vancouver, Washington; and Schaumburg, Illinois.

 

The indictment said that on October 23, 2013, defendant Maria Angelica Mendez Valdivia had $482,275 worth of merchandise - stolen from at least 57 retailers - which was being transported to Mexico. The thieves sold the stolen merchandise to an alleged “fence,” defendant Sara Portilla, who is accused of selling the stolen merchandise from a store she operates in Tijuana.

 

“The mall is supposed to be a safe place for families to shop, eat and enjoy themselves,” said Acting U.S. Attorney Alana Robinson. “Instead, a prolific and violent group of thieves has stolen millions of dollars in merchandise as well as peace of mind from mall employees and customers. With today’s action, we are protecting customers and businesses both physically and economically, and we are restoring and preserving the safety of our community gathering spots.”

 

“Homeland Security Investigations, together with its law enforcement partners, has worked tirelessly to investigate and ultimately dismantle this theft ring,” said David Shaw, special agent in charge of HSI San Diego. “Not only does organized retail crime have a major financial impact on businesses and consumers, but the brazen acts allegedly committed by these defendants also posed a very real threat to public safety. HSI is committed to holding individuals involved in this criminal activity accountable for their actions.”

 

“Crimes that cross jurisdictional lines can be challenging for any one agency to investigate,” said San Diego Police Chief Shelley Zimmerman. “It takes a partnership and commitment from agencies at all levels to collapse the most sophisticated crime rings that exist today. The collaboration we have here in San Diego between law enforcement agencies is second to none. I am so proud of the efforts in this complex case to bring these thieves to justice.”

 

 

 

DEFENDANTS                                           Case Number 17cr2511-GPC

Sara Portilla                                                  Age: 39                San Diego, CA

Maria Angelica Mendez                               Age: 43                San Diego, CA

Jose Mora                                                     Age: 49                Oceanside, CA

Julio Gabriel Lopez Moreno                        Age: 41                Chula Vista, CA

Alejandro Madrinan                                     Age: 43                San Diego, CA

Araceli Razo                                                 Age: 42                Imperial Beach, CA

*Eduardo Madrinan                                      Age: 22                Lemon Grove, CA

*Carlos Gomez Daza                                    Age: 32               San Diego, CA

Karina Yvette Saman Rojas                         Age: 29                San Diego, CA

Juan Manuel Juarez Herrera                         Age: 41                San Diego, CA

James Sanabria                                             Age: 31                San Diego, CA

*Josue Antonio Damazo Herrera                 Age: 26                San Diego, CA

Jose Damazo Herrera                                   Age: 28                San Diego, CA

Brandon Ramirez Salas                                Age: 22                Mexico

*Jesus Raymundo Razo Del Angel              Age: 23                San Diego, CA

Jacob Palacios                                              Age: 24                San Diego, CA

Robin Macias                                               Age: 33                Chula Vista, CA

*Giovani Razo Alvarez                                Age: 33                San Diego, CA

*Adrian Razo                                               Age: 29                Atlanta, Georgia

Sergio Manuel Montana Nava                     Age: 31                San Diego, CA

*Vanessa Medina Munguia                         Age: Unknown    San Diego, CA

Adrian Ulices Reyna Rodriguez                  Age: 21               San Diego, CA

 

*Fugitive

 

SUMMARY OF CHARGES

 

Conspiracy to Transport stolen goods across state and international borders, – Title 18, U.S.C., Sections 371 and 2314

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

 

Receiving stolen goods that have crossed state and international borders – Title 18, U.S.C., Section 2315

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

 

Illegal re-entry of a removed alien – Title 8, U.S.C., Section 1326

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

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

 

AGENCIES

 

Homeland Security Investigations

Orange County Sheriff’s Department

San Diego Police Department

Carlsbad Police Department

Escondido Police Department

National City Police Department

U.S. Border Patrol

ICE/Enforcement and Removal Operations

U.S. Customs and Border Protection

U.S. Marshals Service

San Diego Harbor Police Department

 

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

(Image links below)

 

Assistant U.S. Attorneys Phillip L.B. Halpern (619) 546-6964, Mark W. Pletcher (619) 546-9714, Helen Hong (619) 546-6990, Billy Joe McLain (619) 546-6762

 

NEWS RELEASE SUMMARY – August 31, 2017

 

SAN DIEGO – Political consultant Ravneet Singh, former CEO of ElectionMall Technologies, was sentenced today to 15 months in prison and ordered to pay a $10,000 fine for his role in funneling more than $600,000 in illegal foreign campaign contributions from Mexican citizen Jose Susumo Azano Matsura to candidates in the 2012 San Diego mayoral election.

 

U.S. District Court Judge Michael M. Anello ordered the defendant to report to prison on October 12, 2017, to begin serving his sentence.

 

In September 2016, after six weeks of trial and five days of deliberations, a federal jury in San Diego returned guilty verdicts against Singh, Azano and Azano’s son, Edward Susumo, who were convicted of felony counts associated with a series of illegal campaign contributions by Azano to the campaigns of Bonnie Dumanis and Bob Filner.

 

“American elections are not for sale,” said Executive U.S. Attorney Blair Perez. “We will not allow our sacred electoral process to be compromised. This prison sentence underscores an important message: Anyone who tries to manipulate the American electorate will pay a high price.”

 

“Public corruption undermines the strength and confidence in our system of government which is why these cases are a top criminal priority for the FBI,” said Special Agent in Charge Eric S. Birnbaum. “Today’s sentence stands as a stark condemnation of Azano’s and Singh’s willful efforts to undermine the fundamental principles of our representative democracy. The American people can count on the FBI to continue to bring these complex, sensitive, and important cases to justice.”

 

“Using a series of complex financial transactions, Mr. Singh conspired to funnel illegal money to influence the outcome of San Diego political races,” stated Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation. “IRS Criminal Investigation remains committed to the fight against campaign finance crimes. This case exemplifies the strong impact we are making in this arena working in cooperation with our law enforcement partners.”

 

According to evidence presented at trial, Azano, Singh, and others conspired to inject hundreds of thousands of dollars in cash and in-kind consulting services to the Bonnie Dumanis and Bob Filner campaigns, despite the fact that Azano’s foreign national status made such contributions illegal. To conceal his connection to these contributions, Azano arranged with his son Edward Hester and others to funnel this illegal foreign money through corporate and third person “straw donor” contributions. The conspirators, moreover, arranged for at least $267,000 worth of Singh’s in-kind consulting services to be secretly funneled to the campaigns.

 

In return for his political contributions, Azano sought to buy political influence. For example, he wanted support for his vision of Miami West – a San Diego waterfront development project with a yacht marina, a branded five-star hotel, and luxury bayside condominiums that promised Azano millions in profit. In other instances, Azano wanted access, like the ability to call on influential political figures or obtain letters of reference to secure his son’s admission to the University of San Diego.

 

Ultimately, with Azano’s help, Filner won the election, though he was forced to resign shortly thereafter.

 

For his part, Singh used his specialized skills and knowledge to facilitate the crimes. Evidence at trial demonstrated that Singh used code names for the Dumanis and Filner work that Azano paid for but never for any other domestic candidate for office; harshly reprimanded employees for using those code names in emails; and on one particularly candid occasion, referenced the “legal ramifications” of discussing these topics. Singh further concealed the payments from Azano by structuring the wires from a Mexican company, Broadlink, controlled by Azano, which had nothing to do with electoral politics, to company Singh controlled, not Election Mall, but eSolutions, which primarily developed software from India.

 

In addition to the jury’s guilty verdicts against Azano, Singh, and Hester, the jury was unable to reach a verdict on several charges brought against San Diego lobbyist Marco Polo Cortes, and acquitted Cortes on several charges of falsifying campaign donation records. The jury also acquitted Hester on several charges related to the falsification of campaign donation records, and could not reach a verdict on several other charges. Finally, the jury could not reach a verdict on a firearm charge against Azano.

 

Retrial on a firearm charge against Azano is set to begin September 5, 2017. Azano is, thereafter, scheduled to be sentenced on October 23, 2017, followed by Edward Hester on November 6, 2017. The retrial of Marco Polo Cortes is scheduled for December 5, 2017.

 

Assistant U.S. Attorneys Phillip L.B. Halpern, Mark W. Pletcher, Helen Hong, and Billy Joe McLain of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case.

 

DEFENDANTS                             Case Number: 14cr0388-MMA

 

Ravneet Singh                                Age: 45                   Naperville, IL

Jose Susumo Azano Matsura         Age: 52                   Guadalajara, Mexico

Edward Susumo Azano Hester      Age: 25                   San Diego, CA

 

SUMMARY OF CONVICTIONS

 

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

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

Defendants Azano, Singh and Hester

 

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

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

Defendants Azano, Singh and Hester

 

Count 4: Contribution in the Name of Another Aggregating $25,000 or more – Title 2, U.S.C., Secs. 437g(d) (1) (A) (i) and 441f.

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

Defendant Azano

 

Counts 5-37: Falsification of Records – Title 18, U.S.C., Sec. 1519.

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

Defendant Azano on all counts; Singh guilty on counts 32 and 37

 

AGENCIES

 

Federal Bureau of Investigation

Internal Revenue Service, Criminal Investigation

San Diego Police Department

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

 

Assistant U. S. Attorney Alessandra P. Serano (619) 546-8104 or Joseph Orabona (619) 546-7951

 

NEWS RELEASE SUMMARY – August 31, 2017

 

SAN DIEGO – Seven alleged gang members and associates of the Westside Crips and one hotel manager of two national brand hotels in Oceanside entered guilty pleas in federal court today, admitting to their participation in a racketeering conspiracy involving narcotics trafficking, prostitution of women and other crimes. One other member pleaded guilty to the same charge last week.

 

Ameer Roby (aka “Tiny Dum Dum”), Michael Sullivan (aka “Du-Low”), Shane Anderson (aka “Tiny Westwood and aka “Tiny West”), Demetrius McFarland (aka “Mechii Ruu”), Richard Cleveland (aka “Face”), Umesh Oza (aka “Kevin”), and Larry Monroe admitted to their respective membership and association with the Westside Crips, who primarily operated in Oceanside and elsewhere. Peter Miranda (aka “Fat Boy,” “Baby Rocks,” and “Lil’ Burger”) pleaded guilty on August 24, 2017 and admitted to his role in the racketeering conspiracy. Sentencing for all defendants is scheduled for November 27, 2017 before District Judge John A. Houston.

 

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.

 

The four remaining defendants involved in the racketeering conspiracy with the Westside Crips criminal street gang are scheduled to appear before U.S. District Judge John A. Houston on September 22, 2017 for a status hearing.

 

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

“The members of this violent organization were involved in drug trafficking as well as violent crimes,” said DEA San Diego Special Agent in Charge William R. Sherman. “Combining law enforcement resources and getting these violent drug traffickers off the streets is, and will continue to be a DEA priority.”

 

“The Oceanside Police Department would like to thank the U.S. Attorney's Office and other law enforcement agencies for their collaboration and hard work during this operation,” said Oceanside Police Chief Frank McCoy. “It is collective efforts like this that highlight why the San Diego Region is a model for other law enforcement agencies to emulate, to keep their communities safe.”

 

“For over a decade, this sophisticated street gang terrorized the streets of Oceanside and the surrounding areas for profit,” said IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “Our agency plays a unique role in federal law enforcement’s resolve to dismantle the criminal gang enterprises terrorizing our streets. Our agents target the profit and financial gains of these organizations, following the money in an effort to disrupt these organizations and bring their members to justice.”

 

DEFENDANTS Case Number 17cr0270-JAH

Ameer Roby aka “Tiny Dum” Age: 36 Oceanside, CA

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

Peter Miranda aka “Lil’ Burger” Age: 33 Oceanside, CA

Shane Anderson aka “Tiny West” Age: 25 Oceanside, CA

Demetrius McFarland aka “Mecchi Ruu” Age: 23 Oceanside, CA

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

Larry Monroe Age: 59 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

 

As to Defendant Monroe only:

Title 21, United States Code, Section 841(a) – Conspiracy to Distribute Methamphetamine

Maximum Penalties: life in prison with a mandatory minimum 10 years’ incarceration, a fine of $10,000,000, five years of supervised release

 

AGENCIES

 

North County Narcotics Task Force

Drug Enforcement Administration

Oceanside Police Department

Internal Revenue 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.

Assistant U.S. Attorney Melanie K. Pierson

(619) 546-7976

 

NEWS RELEASE SUMMARY – August 30, 2017

 

SAN DIEGO – Chula Vista resident Yon Pon Wong pleaded guilty in federal court today to illegally importing $3 million of abalone.

 

In pleading guilty, Wong, doing business as Lucky Company, admitted that he imported the abalone using commercial invoices that falsely identified the seller. The 43 importations Wong referred to occurred between February of 2012, and July of 2015, and involved a total of approximately 67,500 kilograms (148,500 pounds) of abalone. The invoices falsely stated the seller to be Exportadora De Mariscos De Mexico, SA de CV, at the false address of Calle Cubilete No 110, Fracc Capistrano, Tijuana, Mexico. As part of his plea, Wong agreed to forfeit $500,000 of proceeds of the illegal importation.

 

Abalone is a highly regulated fishery in Mexico. The laws of Mexico require that commercial invoices have sufficient information on them to allow tracking of the seafood to its lawful origin. An invoice lacking the true name and address of the vendor does not permit authorities on either side of the border to trace the origin of the product.

 

“NOAA's Office of Law Enforcement is committed to the prevention, deterrence, and elimination of illegal trafficking of marine species,” said James Landon, Director of NOAA’s Office of Law Enforcement. “It is our priority to protect species, such as abalone, that are listed by NOAA Fisheries as species of concern, or that are identified as threatened or endangered.”
 

“Wong’s guilty plea represents the commitment of our agents to bring to justice the individuals and companies seeking to defraud the government,” said Dave Shaw, Special Agent in Charge for Homeland Security Investigations in San Diego. “HSI hopes that the prosecution of seafood import companies and its principals will send a strong message to others seeking to violate U.S. trade laws. HSI will continue to work with its local and international law enforcement partners to enforce these laws.”

 

“One of the highest priorities of the U.S. Fish and Wildlife Service Office of Law Enforcement is to investigate individuals and companies that are involved in the unlawful commercial trafficking and smuggling of protected animals and plants here and around the world,” said Dan Crum, Assistant Special Agent in Charge. “The U.S. Fish and Wildlife Service, along with our agency partners, will work tirelessly to dismantle wildlife trafficking schemes, and ensure that those engaged in the illegal black market are held accountable.”

 

Wong was ordered to appear before U.S. District Court Judge Larry A. Burns on November 20, 2017, at 9:00 am for sentencing.

 

DEFENDANT Criminal Case No. 17cr2443-LAB

 

Yon Pon Wong Age: 65 Chula Vista, California

 

SUMMARY OF CHARGES

 

False Labeling, 16 U.S.C. § 3372(d)(1) and 3373(d)(3)(A)(i)

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, three years of supervised release.

 

AGENCIES

 

National Oceanic and Atmospheric Administration, Office of Law Enforcement

Homeland Security Investigations

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

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

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

Assistant U.S. Attorney Ajay Krishnamurthy (619) 546-9613

 

NEWS RELEASE SUMMARY – August 29, 2017

 

SAN DIEGO – Sanders Bruce Segal and his son, Sydney Bruce Segal, each pleaded guilty today to engaging in a racketeering conspiracy that operated for years out of the Lucky Lady Casino and Card Room and other locations in San Diego.

 

The defendants admitted at today’s hearing to participating in an international racketeering enterprise – Segal’s Lucky Lady Sports Book – that regularly engaged in unlawful activity such as bookmaking, transmitting wagering information, money laundering and collecting unlawful debts.

 

As outlined in the indictments, the Lucky Lady Casino and Card Room is a licensed gambling establishment that offers legitimate, tightly-regulated card games. Between 2013 and 2016, however, it also provided a front for Sanders Segal’s illegal bookmaking operations. Sydney Segal was an employee of the Lucky Lady Casino and Card Room, and used his position working in the cage to commingle cash from the card room’s lawful gambling operations with the proceeds of the enterprise’s unlawful sports betting.

 

In his plea agreement, Sanders Segal admitted his role as a leader and organizer of Segal’s Lucky Lady Sports Book. In this capacity, Sanders Segal directed the other members of the enterprise to use gambling websites based overseas to place illegal sports bets on behalf of customers located in the United States.

 

Sanders Segal and other conspirators also coordinated the unlawful collection of those illegal wagers, typically in cash, and sent and received large sums of cash on behalf of the enterprise. For example, Sanders Segal admitted that on April 2, 2015, he met co-defendant David Greg Leppo in a supermarket parking lot in Del Mar, California, and handed Leppo $10,000 in cash proceeds from illegal gambling.

 

Similarly, Sanders Segal admitted that on April 23, 2015, co-defendant Stanley Samuel Penn provided him with $20,000 in cash proceeds that Penn had been holding for the defendant, which Sanders Segal then delivered to co-defendant Petter Magnus Karlsson while at the Lucky Lady Casino and Card Room. Sanders Segal received 10% of any profits earned by the illegal sports bets placed through his enterprise, as well as additional financial benefits.

 

In his plea agreement, Sydney Bruce Segal admitted his role as bookkeeper for Segal’s Lucky Lady Sports Book, and specifically that he maintained records of winning and losing bettors and the amount of money that supported the enterprise’s activities held by him and other co-conspirators. Sydney Segal also admitted that cash from the Lucky Lady Casino and Card Room’s lawful gambling operations was held alongside proceeds of unlawful sports betting coordinated by Segal’s Lucky Lady Sports Book, including in a “player’s bank” provided by the card room.

 

As part of his plea, Sanders Segal agreed to forfeit $222,834, and Sydney Bruce Segal agreed to forfeit $10,000, each figure representing direct proceeds from their respective participation in the offense.

 

Twelve defendants have thus far pleaded guilty to federal charges as a result of the investigation targeting Segal’s Lucky Lady Sports Book: Sanders Bruce Segal, Petter Magnus Karlsson, Pablo Ballestero Frech, Sydney Bruce Segal, Joseph Edward Spatafore, Minh Triet Dinh Nguyen, James Heng Tear, Ken Pheng Keo, Jason D. Taylor, Jeffrey Alan Burke, Ryan Richard Buchardt and Robert Jay Zaben.

 

Sentencing for both Sanders Segal and Sydney Segal is scheduled for December 4, 2017 at 9 a.m. before U.S. District Judge Roger T. Benitez.

 

The two remaining defendants, Stanley Samuel Penn and David Greg Leppo, are charged with racketeering conspiracy and operating an illegal gambling business. Their cases are set for a motion hearing on August 31, 2017, and a jury trial on October 3, 2017, before Judge Benitez. The charges against these two defendants are merely accusations; they are considered innocent unless and until proven guilty.

 

DEFENDANTS                                           Case Number: 16CR1695-BEN

 

Sanders Bruce Segal                                    Age 66                            San Diego

Sydney Bruce Segal                                     Age 34                            San Diego

 

SUMMARY OF CHARGES

 

Count 1: Racketeering Conspiracy to Conduct Enterprise Affairs (RICO Conspiracy), in violation of Title 18, United States Code, Sections 1962(c) & (d)

Maximum penalties: 20 years in prison, 3 years supervised release, a $250,000 fine, forfeiture

 

AGENCIES

 

Federal Bureau of Investigation

San Diego Police Department

Internal Revenue Service – Criminal Investigation

 

 

Assistant U.S. Attorney Jarad E. Hodes (619) 546-7432

 

SAN DIEGO – A federal grand jury returned an indictment today charging eight defendants from Southern California and the Mexican state of Sinaloa with participation in conspiracies to distribute multiple controlled substances throughout the United States and to launder millions of dollars in cash proceeds from those drug sales.

 

Five of those defendants – Javier Felix-Bayardo, Rigoberto Munoz-Banuelos, Manuel Felix-Gutierrez, Hector Sandoval-Toloza, and Camilo Ayon-Mondragon – were charged in a conspiracy to distribute large quantities of cocaine, methamphetamine, and marijuana. Felix-Bayardo and Munoz-Banuelos, along with Gabriela Nunez, Mario Noriega-Osuna, and Margarito Rodriguez-Ochoa, were charged in a conspiracy to launder over $5 million in proceeds through the operation of dozens of bank accounts. Nunez was also charged with using $20,000 in drug proceeds for a down payment on a 2015 Dodge Durango. Munoz-Banuelos was also charged with bulk cash smuggling in connection with his attempt to transport $101,083 in cash to Mexico in a 2011 Ford F-150 truck.

 

According to an affidavit filed in support of a criminal complaint in the case, Felix-Bayardo was the leader of this criminal network, whose members would distribute multiple drugs throughout the United States and then receive cash deposits into bank accounts opened in their own names and under aliases. The affidavit lists over 20 fraudulent accounts at Bank of America and Wells Fargo Bank opened using falsified Mexican identification documents.

 

Agents from the Drug Enforcement Administration, Internal Revenue Service and Homeland Security Investigations discovered that some of the same false identification documents had been used to rent two storage units in National City, California. On August 9, 2017, agents executed a search warrant at those storage units and seized approximately 26.5 kilograms of cocaine, 938 grams of methamphetamine, and 486 kilograms of marijuana, along with five firearms including an AR-15 style rifle modified to function as a machine gun capable of fully automatic fire.

 

     

 

 

As drugs like these flowed throughout the United States, thousands of dollars flowed from Felix-Bayardo’s accounts into the bank account of his wife, Nunez, who then paid for the couple’s lifestyle expenses, including a $1,260 monthly lease payment on a 2016 Mercedes-Benz GLE 450 and a $1,002 monthly loan payment on the 2015 Dodge Durango.

 

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.

 

Arraignment on the indictment is scheduled for September 14, 2017 at 9:30 a.m. before U.S. Magistrate Judge Nita L. Stormes.

 

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

 

DEFENDANTS

 

Javier Felix-Bayardo Age: 33 Bonita, California

Gabriela Favela Nunez Age: 35 Bonita, California

Rigoberto Munoz-Banuelos Age: 31 West Covina, California

Mario Noriega-Osuna Age: 35 San Diego, California

Margarito Rodriguez-Ochoa Age: 36 National City, California

Manuel Felix-Gutierrez Age: 63 Sinaloa, Mexico

Hector Sandoval-Toloza Age: 42 Sinaloa, Mexico

Camilo Ayon-Mondragon Age: 30 Sinaloa, Mexico

 

SUMMARY OF CHARGES

 

Conspiracy to Distribute Cocaine, Methamphetamine, and Marijuana – Title 21, U.S.C., Section 846

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

 

Conspiracy to Launder Monetary Instruments – Title 18, U.S.C., Section 1956(h)

Maximum penalty: 20 years in prison and fine equal to double the value of assets laundered

 

Engaging in Monetary Transaction in Property Derived From Specified Unlawful Activity – Title 18, U.S.C., Section 1957(a)

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

 

Bulk Cash Smuggling – Title 31, U.S.C., Section 5332

Maximum penalty: 5 years in prison and $250,000 fine

 

AGENCIES

 

Drug Enforcement Administration

IRS Criminal Investigation

Homeland Security Investigations

United States Border Patrol

Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768 and Carlos Arguello (619) 546-6684

 

NEWS RELEASE SUMMARY – August 28, 2017

 

SAN DIEGO – Martel Valencia-Cortez, a Mexican national and prolific alien smuggler, was sentenced in federal court today to 99 months in prison for hurling a softball-sized rock at a U.S. Border Patrol agent and for alien smuggling.

Valencia-Cortez was convicted by a federal jury in May of all counts, including one count of assault on a federal officer with a deadly weapon and three counts of bringing in an alien for financial gain.

 

U.S. District Judge Marilyn Huff imposed an 87-month sentence for the four counts, plus an additional 12 months in custody for violating the terms of supervised release from a 2013 alien smuggling conviction.

 

On November 15, 2015, less than two months after his deportation to Mexico following the completion of a 33-month sentence for a prior alien smuggling conviction, Valencia re-entered the United States guiding a group of 15 undocumented immigrants. When the trip through the mountains in rough terrain and inclement weather was interrupted by agents, Valencia threw a softball-sized rock from a distance of approximately 30 feet that hit an agent on the side of the face. Valencia evaded apprehension when he ran back into Mexico afterwards. Agents arrested Valencia when Mexican authorities escorted him to the San Ysidro Port of Entry on Friday, March 11, 2016.

 

According to court records and testimony at trial, the agent who was assaulted said he had never been hit that hard in his life, and he felt an overwhelming pain that caused him to feel dazed and disoriented, as if he was going to pass out. The rock hit the agent so hard that he thought his teeth were knocked-out or his jaw was broken.

 

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

 

“I am grateful to the U.S. Attorney’s Office for the immense support the agents of San Diego Sector have received regarding this case. Valencia demonstrates the worst of what agents are confronted with, and we fully support this conviction and sentencing. Valencia is not only a danger to law enforcement officials but the general public as well,” said San Diego Sector Chief Patrol Agent Richard A. Barlow.

 

DEFENDANTS                                             Case Number 16-CR-0730

Martel Valencia-Cortez                                  Age: 39         Colima, Mexico

 

SUMMARY OF CHARGES

 

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

Maximum Penalty 20 years in prison

 

Count 2-4: Bringing in Aliens for Financial Gain, in violation of 8 U.S.C. 1324 (a)(2)(b)(ii)

Mandatory Minimum of 5 years in prison, maximum 15 years

 

AGENCY

 

U.S. Customs and Border Protection

U.S. Border Patrol

 

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

 

NEWS RELEASE SUMMARY – August 28, 2017

 

SAN DIEGO – Habib Sayb Mujica, an American citizen who spent almost six years in a Mexican prison for firearms trafficking only to be arrested in the U.S. upon his release, pleaded guilty in federal court today to tunnel-related charges.

 

According to his plea agreement, Mujica, 35 admitted that he participated in a conspiracy to construct, finance and use an unfinished tunnel that was discovered in Calexico in 2011. The tunnel was discovered by Homeland Security Investigations agents at a warehouse at 361 W. 2nd Street in Calexico.

 

Mujica acknowledged in his plea agreement that he instructed Ricardo Rosales-Rafael to rent the large Calexico warehouse with drug proceeds. He further admitted that approximately $340,172 in cash was deposited into bank accounts to facilitate the rental of the Calexico warehouse and to rent various machines and tools to construct the tunnel’s exit point for the purpose of smuggling controlled substances.

 

Mujica also admitted that he intended to operate a business known as Baja Bikes, but this was only a front to conceal the tunnel activities inside. To construct the tunnel, Mujica arranged for a Horizontal Directional Drilling Machine (HDD) to initiate the construction of a tunnel, and purchased multiple tools and equipment, including alignment tools, pipes, level tripod, jack hammer, drills, electric saws, forklift hydraulic lift, air compressors and tool boxes.

 

Mujica, who recently completed a sentence of almost six years in a Mexican prison following his conviction for gun trafficking there, was expelled from Mexico to the United States in May 2017. He was arrested by U.S. authorities after his explusion.

Mujica is scheduled to be sentenced for the tunnel-related crimes on November 27, 2017, at 9 a.m. before Judge Thomas Whelan. Mujica also faces gun charges in an unrelated criminal case, criminal case number 11cr3531JAH.

 

The following photos depict the warehouse and the Horizontal Directional Drilling Machine used to construct the tunnel:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEFENDANT                                     Case Number 17CR2505W

Habib Sayb Mujica                               Age: 35              Calexico, California

 

SUMMARY OF CHARGES

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

Maximum penalty: 20 years’ imprisonment and $500,000 fine

 

Conspiracy to Construct, Finance, and Use Tunnel – Title 18,U.S.C. Section 555

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

 

AGENCY

 

Homeland Security Investigations, Calexico

 

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

 

NEWS RELEASE SUMMARY – August 24, 2017

 

SAN DIEGO – Luis Eudoro Valencia, of Perris, California, was charged yesterday with smuggling a Bengal tiger cub into the United States from Mexico.

 

According to the complaint, Valencia drove into the Otay Mesa Port of Entry with the tiger cub on the floor of the vehicle. It is alleged that Valencia failed to declare the tiger cub to Customs and Border Protection officers. The tiger cub was discovered in the secondary inspection area.

 

According to the complaint, the defendant stated that he had purchased the tiger for $300 from an individual he encountered walking a full-sized tiger on a leash in Tijuana. 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. According to the complaint, the defendant lacked the required permit and did not file the required declaration.

 

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.

 

Valencia was released on a $10,000 personal surety bond and ordered to appear for a preliminary hearing on September 5, 2017, at 1:30 pm before U.S. Magistrate Judge Bernard Skomal.

 

 

 

DEFENDANT                                    Case No. 17-MJ-3013

 

Luis Eudoro Valencia                       Age: 18                 Perris, California

 

SUMMARY OF CHARGES

 

Smuggling, 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.

 

Unlawful Importation of Wildlife, 16 U.S.C. §§1538(a)(1)(A) and 1540(b)

 

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 Rebecca S. Kanter (619) 546-7304 and C. Seth Askins (619) 546-6692

 

NEWS RELEASE SUMMARY – August 21, 2017

 

SAN DIEGO – Robert Erie, the former Chief Executive Officer and co-founder of E-World Recyclers, LLC, was sentenced today to 21 months custody for trafficking in counterfeit goods. His conviction relates to a contract he obtained to destroy counterfeit merchandise seized by the federal government. Instead of destroying or “e-recycling” the counterfeit goods as he was required to do (and as he certified), Erie instead diverted the counterfeit merchandise and trafficked in it for commercial advantage.

 

E-World Recyclers was an electronic recycling service company which operated out of Vista, California. In late 2009, E-World received a sub-contract to perform electronic recycling services related to counterfeit goods seized by Department of Homeland Security (“DHS”), Bureau of Customs and Border Protection (“CBP”). Between approximately November 4, 2009, and December 18, 2009, E-World received approximately 38 shipments containing approximately 1,888 pallets of counterfeit goods seized by CBP.

 

Erie instructed E-World employees to sign documents to submit to government agencies certifying the destruction of CBP-seized counterfeit goods. In fact, Erie knew that the goods had not all been destroyed. Instead, on approximately December 24, 2009, Erie rented a personal storage unit in San Marcos, California, and transported some of the CBP-seized counterfeit goods to his personal storage unit, including watches bearing counterfeit marks related to Paneri, Cartier, Romain Jerome, Patek Philippe, Audemars Piguet, Rolex, Chanel, Bebe, Brietling, Omega Graham, Corum, Gucci, Ed Hardy, Coach and Dolce Gabbana, and headphones bearing counterfeit marks related to Bose. Erie maintained the storage unit through September 8, 2011, when federal agents executed a court-authorized search warrant and seized, among other things, (1) 2,275 counterfeit watches bearing marks registered to Chanel, Gucci, Coach, Ed Hardy and other companies; (2) 524 counterfeit pens bearing mark(s) registered to Montblanc; and (3) 12 counterfeit in-ear headphones bearing mark(s) registered to Bose.

 

In the meantime, after removing the counterfeit goods from E-World but prior to federal agents search and seizure, Erie trafficked in the counterfeit merchandise for his own commercial advantage. For example, on approximately January 25, 2010, for Eroe sent at least four separate shipments consisting of multiple boxes of CBP-seized counterfeit watches to business associates who were affiliated with a glass company in Ohio to whom E-World owed money.

 

Judge Anthony J. Battaglia imposed a two-level upward adjustment for obstruction of justice based on Erie’s alteration of e-mails in an attempt to thwart the prosecution. Specifically, the Court found that in approximately February 2010, Erie altered e-mail correspondence from September 2009 between himself and a Cycle Chem representative, which defendant then sent in approximately August 2011, to his then criminal defense attorney. The defendant’s criminal defense attorney then sent the altered e-mail correspondence to the U.S. Attorney’s Office in order to dissuade the U.S. Attorney’s Office from seeking criminal charges against defendant for his unlawful trafficking in CBP-seized counterfeit merchandise. The alteration of the e-mails had the effect of falsely suggesting that the contractor from whom E-World had obtained the subcontract had giving Erie permission to redistribute and/or remarket the counterfeit watches, which it had not.

 

Amanda Thandi, Special Agent in Charge, U.S. Department of Homeland Security, Office of Inspector General, San Diego Field Office, said, “The collaborative investigation effort between DHS OIG and HSI played a pivotal role in the successful prosecution of this case. The DHS OIG’s vigilant oversight of government contractors like E-World Recyclers is imperative to safeguard taxpayer dollars.”

 

“Bob Erie was trusted to do one thing with the counterfeit goods illegally being imported at the land and sea borders: Keep it out of the stream of commerce by assuring its destruction or recycling,” said Acting U.S. Attorney Alana W. Robinson. “Instead, he used the seized counterfeit goods to advance his own personal agenda and commercial advantage, to the detriment of the trademark holders, the United States, and ultimately his own company. This crime was especially egregious because of Erie’s attempts to obstruct justice by falsifying e-mails, which were sent to the United States Attorney’s Office in an effort to avoid prosecution. The United States will continue to vigorously enforce intellectual property crimes and protect the property interests of American companies against abusers like Erie.”

 

He pleaded guilty on February 23, 2017, and admitted that the retail value of the infringed items trafficked by defendant was at least $1,450,000. In addition to the sentence of 21 months’ custody, Erie was ordered to pay a $10,000 fine. Erie, who was released on bond during the pendency of the proceedings, was ordered to surrender on September 5, 2017 to the Bureau of Prisons.

Erie was previously convicted and sentenced in June 2013 to five years’ probation for being a felon in possession of a firearm (11cr5796-AJB.)

 

DEFENDANTS                                   Case Number 14cr3660-AJB

Robert Erie                                           Age: 53                      Carlsbad, CA

 

 

SUMMARY OF CHARGES

 

Conspiracy to Traffic in Counterfeit Goods – Title 18, U.S.C., Section 371

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

 

AGENCIES

 

Department of Homeland Security – Office of Inspector General

Homeland Security Investigations, Intellectual Property & Trade Investigations

 

 

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

 

NEWS RELEASE SUMMARY – August 22, 2017

 

SAN DIEGO – A man who fled in the middle of his three-day cocaine trafficking trial was arrested yesterday after being a fugitive for two months. Itai Enriquez-Rodriguez, 21, was arrested after being located in Gilroy near San Jose, California.

On July 7, 2016, Enriquez-Rodriguez was arrested at the Otay Mesa, California Port of Entry after being caught with three kilograms of cocaine in his vehicle. Shortly after his arrest, Enriquez-Rodriguez was released on bond. Following an investigation by Department of Homeland Security (DHS), Homeland Security Investigations (HSI), Enriquez-Rodriguez was indicted on conspiracy to import cocaine and importation of cocaine charges. Enriquez-Rodriguez persisted in his not-guilty plea and went to trial.

 

On June 21, 2017, Enriquez-Rodriguez’s trial began. At the end of the first day of trial, the Honorable Marilyn L. Huff ordered Enriquez-Rodriguez to return the following morning. The next morning, however, Enriquez-Rodriguez failed to appear. The parties recessed that morning to attempt to locate Enriquez-Rodriguez. During that recess, HSI agents discovered a Facebook post by Enriquez-Rodriguez’s brother depicting him and his brother, defendant Enriquez-Rodriguez. The brother’s Facebook account also included a photo of a man with a handgun with the caption, “He who laughs last, laughs the best. And I’m in no hurry.” Both of the images were posted to Facebook the same morning Enriquez-Rodriguez fled.

 

Finding that Enriquez-Rodriguez had voluntarily absented himself from trial, Judge Huff ruled the trial could continue in absentia. Trial concluded on June 23, 2017 with the jury finding Enriquez-Rodriguez guilty of conspiracy to import cocaine and importation of cocaine.

 

Over the next two months, the U.S. Marshals Service and HSI followed leads to help identify fugitive Enriquez-Rodriguez’s whereabouts. On August 21, 2017, the Marshals Service obtained information that Enriquez-Rodriguez was hiding out in his hometown of Gilroy, California. Following that lead, the U.S. Marshals Service arrested Enriquez-Rodriguez in a vehicle outside his girlfriend’s residence.

 

On August 18, 2017, Enriquez-Rodriguez was indicted by a federal grand jury on bail jumping charges.

 

Enriquez-Rodriguez’s sentencing on the cocaine trafficking charges is scheduled for October 23, 2017 at 9:00 am before the Honorable Marilyn L. Huff.

 

DEFENDANT Case Numbers 17cr0059-H, 17cr2379-H

Itai Enriquez-Rodriguez Age: 21 Gilroy, CA

 

SUMMARY OF CHARGES

 

Conspiracy to Import Cocaine; Importation of Cocaine – Title 18, U.S.C., Sections 952, 960, 963

Maximum penalty: 20 years’ imprisonment and $1,000,000 fine

 

Bail Jumping – Title 18, U.S.C., Section 3146.

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

 

AGENCIES

 

Homeland Security Investigations
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.

Assistant U.S. Attorney Adam Braverman (619) 546-6717

 

NEWS RELEASE SUMMARY – August 18, 2017

 

SAN DIEGO – Alvaro Lopez-Nunez – brother of Sinaloa Cartel leader Damaso Lopez-Nunez, aka Licenciado, and uncle of Sinaloa Cartel cell leader Damaso Lopez-Serrano, aka Mini Lic – was taken into custody by Drug Enforcement Administration agents at the Nogales, Arizona Port of Entry on August 17, 2017. His arrest follows on the heels of Lopez-Serrano’s July 27, 2017, self-surrender in the Southern District of California.

 

A federal grand jury in San Diego returned an indictment on August 19, 2016, charging Damaso Lopez-Serrano, Alvaro Lopez-Nunez and four of their close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances. That same day, the Clerk of the Court issued sealed warrants for their arrests. Sicairos-Montalvo was subsequently arrested by Mexican law enforcement officials. The remaining defendants are fugitives.

 

On August 18, 2017, Alvaro Lopez-Nunez made his initial appearance in federal court in Tucson, Arizona and was arraigned on the San Diego indictment.

 

The arrest marks the continued efforts by the Southern District of California to target the Sinaloa Cartel in Operation Narco Polo. 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.

 

DEFENDANT                                Case Number 16CR1896-DMS

 

Alvaro Lopez-Nunez                    Age: 38            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

Customs and Border Protection Office of Field Operations

Customs and Border Protection Office of Border Patrol

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

 

*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.

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

 

NEWS RELEASE SUMMARY – August 18, 2017

 

 

SAN DIEGO – U.S. Navy Captain Jesus Vasquez Cantu admitted in federal court today that he accepted bribes in the form of parties and prostitutes while sneaking proprietary information to foreign defense contractor Leonard Glenn Francis and his Singapore-based firm, Glenn Defense Marine Asia.

 

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.

 

Cantu, 59, of Silverdale, Washington, pleaded guilty to one count of conspiracy to commit bribery and is scheduled to be sentenced on November 9, 2017 before U.S. District Judge Janis L. Sammartino.

 

In his plea agreement, Cantu acknowledged that Francis took him and others out for drinks and dinners at posh restaurants, nightclubs and karaoke bars and paid for lavish hotel rooms and the services of prostitutes on numerous occasions in 2012 and 2013. Cantu admitted that he provided proprietary U.S. Navy information to Francis, and that he used his power and influence to help Francis and GDMA with their business.

 

“The number of U.S. Navy officials who participated in this conspiracy is astounding,” said Acting U.S. Attorney Alana W. Robinson. “Like so many others, this defendant sold out the Navy and his country for cocktails and karaoke. We are pressing forward in this investigation until we are certain that all involved have been held accountable.”

 

“The guilty plea of Jesus Cantu is another sad chapter in the largest fraud and corruption scandal in the U.S. Navy's history,” said Dermot O'Reilly, Deputy Inspector General for Investigations, Office of Inspector General, Department of Defense. “While the conduct of the vast majority of U.S. Navy personnel is beyond reproach, the unfortunate truth is that for years Leonard Francis and Glenn Defense Marine Asia, compromised the integrity of numerous members of the U.S. Navy. This investigation continues, and the Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue those individuals involved in this massive corruption scandal.”

 

NCIS Director Andrew Traver said of today’s events, “Captain Cantu, like others caught up in the GDMA scandal, dishonored his sworn oath of office. NCIS, in concert with our partner agencies, remains resolved to following the evidence wherever it may lead, to help hold accountable those who choose personal gratification over duty and professional responsibility.”

 

According to his plea agreement, Cantu served in the Navy until 2014. During the time he was accepting bribes from Francis in 2012 and 2013, Cantu was the deputy commander, Military Sealift Command (MSC) Far East in Singapore. He oversaw the MSC ships that provided logistical sustainment to Navy ships operating in the Seventh Fleet.

 

Cantu also admitted in his plea agreement that, in 2007, when he was the Assistant Chief of Staff for Logistics for the Commander of the U.S. Navy’s Seventh Fleet aboard the USS Blue Ridge, he and others participated in a bribery conspiracy with Francis. Cantu and other members of the conspiracy accepted more than $135,000 in meals, entertainment, travel and hotel expenses, and the services of prostitutes from Francis; in exchange, they worked together to help Francis as issues important to his business arose.

 

Cantu’s 2007 conduct described in the plea agreement is related to the March 2017 indictment of nine high-ranking Seventh Fleet U.S. Navy officers. Retired U.S. Navy Rear Admiral Bruce Loveless and others are accused of conspiring with Francis, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel. The others include Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; Commander Mario Herrera and Chief Warrant Officer Robert Gorsuch. Their cases are pending.

 

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

 

The other current or retired Navy officials charged so far in the fraud and bribery investigation are U.S. Navy Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Michael Misiewicz; Commander Jose Luis Sanchez; Commander Bobby Pitts; Commander David Kapaun; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; NCIS Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian, who oversaw contracting in Singapore.

 

All have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison and ordered to pay a fine of $50,000, to forfeit $450,000 of the proceeds of the criminal activity, and to pay $450,000 in restitution to the U.S. Navy; Gilbeau was sentenced on May 17 to 18 months in prison and ordered to pay a $100,000 fine and $50,000 in restitution to the Navy; and Brooks was sentenced on June 16 to 41 months in prison and ordered to pay a $41,000 fine and $31,000 in restitution to the Navy. Sanchez, Pitts and Kapaun await sentencing.

 

Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. All have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy; Peterson and Raja were extradited from Singapore in 2016 and sentenced on August 11 to 70 months and 46 months in prison, respectively. Francis and Aruffo await sentencing.

 

Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California 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: 17CR2376-JLS

 

U.S. Navy Captain Jesus Vasquez Cantu                       Age 59 S                  ilverdale, Washington

 

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

 

*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 – August 15, 2017

 

SAN DIEGO – U.S. Navy commander Bobby Pitts pleaded guilty today in connection with his efforts to obstruct a federal criminal investigation into the exploits 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 attempted to protect Francis, owner and chief executive of Glenn Defense Marine Asia (GDMA). 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.

 

Pitts is scheduled to be sentenced on December 1, 2017 by U.S. District Judge Janis L. Sammartino of the Southern District of California.

 

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 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.

 

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 services in fact rendered by the Thai government.

 

In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.

 

So far, 18 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

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

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

 

An active-duty U.S. Navy commander pleaded guilty today in connection with his efforts to obstruct a federal criminal investigation of the owner and chief executive officer of a multi-national defense contracting firm headquartered in Singapore. 

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana Robinson of the Southern District of California, Director Dermot O’Reilly of the Department of Defense’s Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement. 

Bobby Pitts, 48, of Chesapeake, Va., pleaded guilty to one count of conspiracy to defraud the U.S. in connection with the NCIS’s investigation of Leonard Glenn Francis, the owner and CEO of Glenn Defense Marine Asia (GDMA).  Pitts is set to be sentenced on December 1, by U.S. Magistrate Judge Bernard Skomal of the Southern District of California, who accepted his plea today. 

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 learned that NCIS and several civilian employees of the U.S. Navy were investigating whether Francis was over-billing the U.S. Navy on ship husbanding contracts.  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 services in fact rendered by the Thai government. 

In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.

So far, 18 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty.  All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

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

Assistant U.S. Attorneys Adam L. Braverman (619) 546-6717 and Fred A. Sheppard (619) 546-8237

 

NEWS RELEASE SUMMARY – August 14, 2017

 

On the day scheduled for his trial, Jesus Manuel Salazar-Nunez entered a guilty plea before United States District Court Judge Dana M. Sabraw to an indictment charging him with conspiracy to import methamphetamine, cocaine and heroin into the United States from a place outside thereof, in violation of Title 21, United States Code, Sections 952, 960 and 963.

 

Jesus Manuel Salazar-Nunez was charged in a sealed indictment on September 15, 2015. A sealed arrest warrant was issued that same day. Salazar-Nunez was arrested the following day when he flew into Hartsfield-Jackson Atlanta International Airport from Guadalajara, Mexico.

 

In 2015, Drug Enforcement Administration agents intercepted the communications of the defendant and others making arrangements for tractor-trailers to travel from Sinaloa, Mexico to Baja California, Mexico, carrying hundreds of pounds of methamphetamine, cocaine and heroin among canned food and drinks, frozen shrimp and vegetable boxes and other household goods. Once they arrived at a Tijuana warehouse, the narcotics were unloaded, distributed to couriers and smuggled into San Diego, California. connection with the entry of his guilty plea, Salazar-Nunez admitted to making arrangements for four tractor-trailers that were seized by Mexican law enforcement, including: a tractor-trailer stopped on March 28, 2015, with a total of approximately 285 kilograms of methamphetamine, 3 kilograms of heroin and 11 kilograms of cocaine; two tractor-trailers stopped on April 28, 2015, with a total of approximately 422 kilograms of methamphetamine, 38 kilograms of heroin and 4 kilograms of cocaine; and a tractor-trailer stopped on August 21, 2015, with approximately 165 kilograms of methamphetamine.

 

Salazar-Nunez is scheduled to be sentenced on November 9 before Judge Sabraw.

 

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                                 Criminal Case No. 15-CR-2380-DMS

 

Jesus Manuel Salazar-Nunez            Age: 35

 

SUMMARY OF CHARGES

 

Conspiracy to Import Methamphetamine, Cocaine and Heroin, in violation of Title 21, United States Code, Sections 952, 960 and 963.

 

Penalties: Mandatory Minimum 10 years and Maximum Life in Prison, $10,000,000 fine, $100 Special Assessment, Supervised Release up to Life

 

INVESTIGATING AGENCIES

 

Drug Enforcement Administration

Customs and Border Protection Office of Field Operations

Customs and Border Protection Office of Border Patrol

San Diego Law Enforcement Coordination Center

Homeland Security Investigations

Internal Revenue Service

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

 

NEWS RELEASE SUMMARY – August 14, 2017

 

SAN DIEGO – Miguel Angel Tejada-Loaiza was sentenced in federal court today to 48 months in prison for transporting unauthorized immigrants and in the process fleeing U.S. Border Patrol Agents and crashing his vehicle into a guard rail.

 

Tejada-Loaiza, himself a Mexican citizen without status in the United States, drove six other unauthorized immigrants near the Otay Mesa Port of Entry after the group had unlawfully entered the United States. Two passengers were ejected from the vehicle and were hospitalized for several weeks with serious injuries.

 

On April 23, 2017, U.S. Border Patrol Agents spotted a Ford Expedition vehicle parked in an area where a seismic intrusion device had detected movement. An agent heard yelling coming from the vehicle and saw the driver, Tejada-Loaiza, signaling for people to enter the vehicle. Agents followed the Expedition in a marked Border Patrol unit and tried to pull the vehicle over. Tejada-Loaiza abruptly turned onto a north-bound road and sped up, failing to yield to the agents. Tejada-Loaiza reached speeds of approximately 75 miles per hour.

 

Tejada-Loaiza suddenly made a sharp turn, colliding with the end of the guardrail. The vehicle slid down an embankment, ejecting two passengers. One suffered major injuries that required emergency back surgery; he was on a ventilator in the hospital for over three weeks. The other was an unaccompanied minor who suffered lacerations on his face and body.

 

Tejada-Loaiza pleaded guilty to Illegal Transportation of Aliens for Financial Gain on May 23, 2017. In his plea, he acknowledged he knew he was in violation of immigration laws when he transported the six unauthorized immigrants in the vehicle. Tejada-Loaiza admitted the individuals he transported were paying others as much as $5,000 to be smuggled into the United States and transported illegally.

 

At sentencing, U.S. District Judge Larry A. Burns focused on the “callous” nature of Tejada-Loaiza’s decisions and noted that of the alien smuggling cases he has seen over the years, “this case is at the very aggravated end of the spectrum.”

 

“Smuggling endangers not only those being transported illegally, but the general motoring public,” said Acting U.S. Attorney Alana W. Robinson. “Smugglers commodify human beings, prioritizing profits over public safety. Our office will vigorously prosecute individuals who capitalize on the illegal smuggling of people into and within the United States.”

 

“The circumstances surrounding this case are tragic, and once again demonstrate the disregard for human life displayed by these smugglers,” said Chief Patrol Agent Richard A. Barlow, U.S. Border Patrol. “We are grateful to the U.S. Attorney’s Office for their hard work and dedication to punish the individuals who endanger the lives of so many people.”

 

DEFENDANT Case Number: 17CR1298-LAB

 

Miguel Angel Tejada-Loaiza Age: 21 Mazatlan, Sinaloa, Mexico

 

SUMMARY OF CHARGE

 

Illegal Transportation of Aliens for Financial Gain – Title 8, United States Code, Section 1324(a)(1)(A)(ii); Maximum Penalty: 10 years in prison.

 

AGENCY

 

U.S. Border Patrol

 

Two former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced on Friday for conspiring to submit bogus claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the U.S. Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) made the announcement.

Neil Peterson, 39, and Linda Raja, 44, both of Singapore, were sentenced to 70 and 46 months, respectively, by U.S. District Judge Janis L. Sammartino  of the Southern District of California.  Both worked as chief deputies for GDMA, which was owned by Leonard Glenn Francis.   Peterson served as the vice president for global operations for GDMA and Raja served as GDMA’s general manager for Singapore, Australia and the Pacific Isles.

Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016.  They each pleaded guilty in May 2017 to one count of conspiracy to defraud the United States with respect to claims.

According to admissions made as part of Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested.  In this manner, Peterson, Raja and other members of GDMA’s core management team could ensure that GDMA’s quote would be selected by the U.S. Navy as the supposed low bidder.  GDMA could thus control and inflate the prices charged to the U.S. Navy without any true, competitive bidding, as required, they admitted.

Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious port authorities with fraudulently inflated port tariff rates, and approved the presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the bona fide port authorities.

For example, Peterson and Raja admitted that for the visit of the U.S.S. Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA's core management team, false documents and inflated invoices were presented to the U.S. Navy.  The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated, Peterson and Raja admitted.

Peterson and Raja admitted that losses to the U.S. Navy exceeded $34,800,000 as a result of this scheme.

So far, 17 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty.  All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

The DCIS, NCIS and the Defense Contract Audit Agency are investigating.  Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and are prosecuting the case.  The Criminal Division’s Office of International Affairs provided substantial assistance in this matter. 

Assistant U. S. Attorney Josh Jones (619) 546-9744

 

NEWS RELEASE SUMMARY – August 9, 2017

 

SAN DIEGO – A federal grand jury has indicted Raul Flores Hernandez, the suspected leader of a Guadalajara-based drug trafficking organization, for moving large quantities of cocaine from South America to Mexico for distribution and further transportation into the United States.

 

In a related move, the Department of Treasury’s Office of Foreign Assets Control (OFAC) today designated Flores Hernandez, plus 21 of his alleged criminal associates and 42 businesses and other entities affiliated with the trafficking organization as Significant Foreign Narcotics traffickers under the Foreign Narcotics Kingpin Designation Act. As a result of today’s action, all assets of the individuals and entities designated that are under U.S. jurisdiction or are in the control of U.S. persons are frozen.

 

The Flores Hernandez indictment, returned by a grand jury sitting in the Southern District of California on March 17, 2017, and unsealed July 20, 2017, resulted from an extensive investigation into the Flores organization conducted jointly by the Drug Enforcement Administration (DEA) in San Diego, Homeland Security Investigations in San Diego and the DEA country office in Guadalajara, Mexico.

 

In support of the Kingpin Act designation of Flores Hernandez, which was the result of its own concurrent investigation into the trafficking organization, OFAC has said that Flores Hernandez “has trafficked significant quantities of drugs, primarily cocaine, to the United States and has been engaged in these activities since the late 1970s.” OFAC emphasized Flores Hernandez’s cooperative relationship with the Sinaloa Cartel and the Cartel de Jalisco Nueva Generacion, which has led to Flores Hernandez amassing “great wealth, which he has invested into an extensive network of businesses and real estate located primarily in Guadalajara, Jalisco, Mexico.”

 

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.

 

DEFENDANT                                                                                        Case Number 17CR680-JAH

Raul Flores Hernandez, also known as “Tio” and “Senior”                   Age: 64               Guadalajara, Mexico

 

SUMMARY OF CHARGES

 

International Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Sections 959, 960 and 963

Maximum penalty: Life in prison; 10 year mandatory minimum; and $10 million fine

 

AGENCIES

 

Drug Enforcement Administration in San Diego and Guadalajara

Homeland Security Investigations in San Diego

 

*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 Phillip L.B. Halpern (619) 546-6964

 

NEWS RELEASE SUMMARY – August 9, 2017

 

SAN DIEGO – Alfonso Liburd, the President and Chief Executive Officer of San Diego-based defense contractor NEVWEST, Inc. (“NevWest”), pleaded guilty today to improperly aiding and abetting Navy Port Engineer, John Nasshan (charged elsewhere), who improperly administered projects in which he (Nasshan) had a financial interest.

 

According to documents filed in Court, Nasshan had been employed at Southwest Regional Maintenance Center as a Combat Systems Port Engineer since March of 2009. As a Combat Systems Port Engineer, Nasshan drafted technical direction letters, recommended which contractors were qualified for jobs and verified and certified work performed on Navy ships by contractors. to federal law, Nasshan was prohibited from working on projects in which he had a personal financial interest. Despite this prohibition, Nasshan administered projects at the Navy’s Southwest Regional Maintenance Center involving work performed by Liburd and NevWest.

 

Nasshan made decisions and recommendations affecting Navy contracts with NevWest, Inc. even though he made personal loans to Liburd and NevWest, which is a conflict of interest. As detailed in government pleadings, between May 2011 and September 2015, Nasshan had a financial interest in the business affairs of NevWest. In particular, Nasshan loaned Liburd and NevWest more than $30,000 at the same time that NevWest was engaged in numerous subcontracts with Southwest Regional Maintenance Center. Liburd accepted these loans despite recognizing that Nasshan’s job required that he administer NevWest subcontracts.

 

In order to hide and conceal their illegal activity, Liburd and Nasshan agreed to keep their financial arrangement secret; to deal in cash when exchanging amounts over $10,000; and to structure the cash they were exchanging by dividing it up into amounts of $10,000 or less.

 

Liburd also lied to Defense Criminal Investigative Service agents regarding his relationship with Nasshan. In particular, on November 13, 2015, he falsely told a DCIS agent that he never: (i) received any money from Nasshan, including cash; (ii) paid Nasshan any money; or (iii) obtained any loans from Nasshan.

 

“As in all phases of the Government contracting process, it is essential that the work performed by contractors be done free of undue influence, bias, or favoritism,” said Acting U.S. Attorney Alana W. Robinson. “Accordingly, government officials and employees are prohibited from working on any and all matters that would affect their personal financial position.”

 

“The successful prosecution of this case was the direct result of collaborative teamwork between the Naval Criminal Investigative Service, our federal law enforcement partners and the U.S. Attorney's Office,” said Gunnar Newquist, Special Agent in Charge of the NCIS Southwest Field Office. “Convictions like this should be a warning to those who would attempt to take advantage of the U.S. Navy, for personal gain. We are unified in our efforts to catch criminals who not only defraud the U.S. Navy, but specifically are stealing money from the American taxpayers at the direct loss to our warfighters.”

 

Chris Hendrickson, Special Agent in Charge of the Defense Criminal Investigative Service's Western Field Office said: “DCIS and its partner agencies will aggressively investigate Department of Defense personnel who abuse their positions of trust and corruptly advance their own interests. This behavior tarnishes the integrity of the Department's procurement processes and erodes the public's faith in government.”

 

“The FBI seeks truth and justice in our investigations,” commented FBI Special Agent in Charge Eric S. Birnbaum. “Today’s conviction shows that the FBI, along with our investigative partners, will ultimately uncover the truth despite roadblocks created by those who stand to personally benefit from their lies.”

 

DEFENDANT:                                              Case Number 17cr2189-JLS_

Alfonso Liburd                                               Age: 67           Chula Vista, CA

SUMMARY OF CHARGES

 

Aiding and Abetting a Conflict of Interest – Title 18, U.S.C., Section 208 and 2

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

 

AGENCIES

 

Federal Bureau of Investigation

Defense Criminal Investigative Service

Naval Criminal Investigative Service

 

Related Case:

DEFENDANT: Case Number 17cr1167_

John Nasshan Age: 55 Jamul, CA

SUMMARY OF CHARGES

 

Conflict of Interest – Title 18, U.S.C., Section 208

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

 

AGENCIES

 

Federal Bureau of Investigation

Defense Criminal Investigative Service

Naval Criminal Investigative Service

 

 

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

 

NEWS RELEASE SUMMARY – August 10, 2017

 

SAN DIEGO – The former Vice President of Operations for two airline mechanic staffing companies, Eleno Quinteros, Jr., pleaded guilty today to charges of making false statements in support of legal permanent resident petitions for dozens of the companies’ mechanics.

 

Quinteros admitted that he falsely certified that he had received no payments from the mechanics, when in fact he had demanded and collected hundreds of thousands of dollars of unlawful fees from approximately 85 of them.

 

According to the plea agreement, Quinteros demanded and collected as much as $567,480 from employees, even though employers are prohibited by law from demanding payment for their fees—including attorneys’ fees—in connection with the charged applications. Some of the money Quinteros collected was paid to attorneys assisting with the applications. The rest of the money was pocketed by Quinteros himself.

 

Quinteros was vice president of two different staffing companies, as set out in his plea agreement. The companies’ staff performed heavy maintenance on aircraft at a variety of locations nationwide. Quinteros was responsible for recruiting Mexican airline mechanics to work in the United States for the companies, and for helping recruits to obtain work visas such as TN or H-2B visas.

 

According to the indictment, Quinteros first assisted recruits in obtaining work visas to come to the United States. Quinteros then agreed to help at least 85 of them pursue a legal permanent residency—in exchange for substantial (and unlawful) fees. Quinteros directed many employees to pay money to his wife’s bank account, or provide him with blank money orders, in order to conceal the source of the unlawful funds.

 

Quinteros pleaded guilty to a single count of making a false claim in support of an immigration application, in violation of Title 18, United States Code, Section 1546(a). He admitted in his plea, however, that the underlying scheme involved more than 25 immigration documents.

 

“Legal permanent residency is not for sale,” said Acting U.S. Attorney Alana W. Robinson. “This Office is dedicated to fighting immigration fraud and prosecuting those who hawk lawful immigration status for their own personal financial gain.”

 

“The Diplomatic Security Service is committed to protecting the integrity of H-2B visas and all U.S. visas and travel documents that assist U.S. companies to legally employ foreign workers,” said Michael Bishop, Special Agent in Charge of the DSS Los Angeles Field Office. “This case is the result of the partnership among federal law enforcement agencies and DSS’ global network of special agents working together to interdict visa and passport crimes and stop criminals from reaping illegal income by exploiting U.S. visas, passports, and foreign workers.”

 

“Immigration benefit fraud is a serious crime, and those who corrupt the integrity of our nation’s legal immigration system must understand there are serious consequences for those actions,” said Joseph Macias, special agent in charge of Homeland Security Investigations (HSI) Los Angeles. “Not only do schemes like this potentially rob deserving immigrants of benefits they rightfully deserve, they also create a security vulnerability that could be exploited by criminals and others who pose a danger to our community. As the lead agency for the Los Angeles Document and Benefit Fraud Task Force, HSI will continue to work with our law enforcement partners to aggressively target those who conspire to manipulate and exploit our nation's legal immigration system for their own personal financial gain.”

 

“U.S. Citizenship and Immigration Services has zero tolerance for those who try to fraudulently misuse our country’s lawful immigration system,” said Susan Curda, USCIS District Director in Los Angeles. “We are proud of our role in uncovering this scheme and bringing the perpetrator to justice.”

 

Quinteros' sentencing is set for November 6, 2017 before Judge Michael M. Anello.

 

DEFENDANT                                                Case No. 17-cr-557-MMA

 

“Max” Quinteros, Jr.                                 Age: 45               Chula Vista, California

 

CHARGES

 

False Statement on an Immigration Document - 18 U.S.C. § 1546(a)

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

 

AGENCIES

 

Department of State, Diplomatic Security Service

Department of Homeland Security, Homeland Security Investigations

U.S. Citizenship and Immigration Services

 

 

Assistant U.S. Attorney Adam Braverman (619) 546-6717

 

NEWS RELEASE SUMMARY – August 7, 2017

 

SAN DIEGO – Sinaloa Cartel Cell Leader Damaso Lopez-Serrano, aka Mini Lic, was arraigned in federal court today following his self-surrender to United States law enforcement authorities at the Calexico West Port of Entry on July 27.

 

Lopez-Serrano, 29, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States. Lopez-Serrano was arraigned on an indictment returned by a federal grand jury in San Diego on August 19, 2016, charging him and five of his close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances.

 

United States District Court Judge Dana M. Sabraw arraigned Lopez-Serrano on these charges today and unsealed the indictment against these two defendants. Lopez-Serrano did not seek bond and will remain in custody. A status hearing is scheduled for November 2, 2017 at 10 a.m. before Judge Sabraw.

 

The announcement was made by Attorney General Jeff Sessions, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney for the Southern District of California Alana Robinson.

 

The United States also announced today the unsealing of an additional 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 father and son, Damaso Lopez Nunez and Damaso Lopez Serrano, respectively, with Conspiracy to Distribute Controlled Substances Intended for Importation. Damaso Lopez Nunez was arrested by Mexican authorities on May 2, 2017, and the United States is in the process of seeking his extradition on the December 4 indictment. Lopez Serrano will be arraigned on this indictment at a future date.

 

“At a time when more Americans than ever are dying from drug overdoses, the Department of Justice has made it a top priority to target the Mexican Cartel leaders responsible for the dangerous drugs that poison our families,” said Attorney General Sessions. “We will continue to go after these cartel leaders in order to dismantle their organizations from top to bottom, and today’s announcement should send them a clear message: you can turn yourselves in the easy way, or we will find you and bring you to justice the hard way. No matter what, you will face the consequences.”

 

“This extraordinary case is this district’s most significant, comprehensive and large-scale cartel prosecution,” said Acting U.S. Attorney Alana Robinson. “Today marks another important step in the dismantling of the Sinaloa Cartel and is a reflection of law enforcement’s focused efforts these last several years to put an end to this most powerful drug trafficking organization.”

 

“The arrest of this key cartel leader is a significant blow to the Sinaloa Cartel,” said DEA San Diego Special Agent in Charge William R. Sherman. “DEA remains vigilant in its mission to keep investigating this organization and arresting these individuals who sell their poison to the citizens of the United States.”

 

The Southern District of California indictment unsealed today marks 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 $27,892,706.00 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.

 

DEFENDANTS Case Number 16CR1896-DMS

 

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

Nahum Abraham Sicairos-Montalvo, aka Kinceanero 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

Internal Revenue Service

Federal Bureau of Investigation

United States Attorney’s Office, Northern District of Illinois

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

 

*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.

 

A cell leader of the Sinaloa drug cartel was arraigned in federal court today following his self-surrender to U.S. law enforcement authorities at the Calexico West Port of Entry in California, on July 27.

Damaso Lopez-Serrano, aka Mini Lic, 29, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the U.S.  Lopez-Serrano was arraigned on an indictment returned by a federal grand jury in San Diego on Aug. 19, 2016, charging him and five of his close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances.  U.S. District Court Judge Dana M. Sabraw arraigned Lopez-Serrano on these charges and unsealed the indictment against these two defendants.

The announcement was made by Attorney General Jeff Sessions, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana Robinson for the Southern District of California and Special Agent in Charge William R. Sherman of the Drug Enforcement Administration’s San Diego Field Office.

The U.S. also announced today the unsealing of an additional indictment returned Dec. 14, 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 father and son, Damaso Lopez Nunez and Damaso Lopez Serrano, respectively, with Conspiracy to Distribute Controlled Substances Intended for Importation.  Damaso Lopez Nunez was arrested by Mexican authorities on May 2, and the U.S. is in the process of seeking his extradition on the December 14 indictment.  Lopez Serrano will be arraigned on this indictment at a future date.

“At a time when more Americans than ever are dying from drug overdoses, the Department of Justice has made it a top priority to target the Mexican Cartel leaders responsible for the dangerous drugs that poison our families,” said Attorney General Sessions.  “We will continue to go after these cartel leaders in order to dismantle their organizations from top to bottom, and today’s announcement should send them a clear message: you can turn yourselves in the easy way, or we will find you and bring you to justice the hard way.  No matter what, you will face the consequences.”

The Southern District of California indictment unsealed today marks the conclusion of the fourth phase of a five-year OCDETF investigation Operation Narco Polo 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. 

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

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

 

NEWS RELEASE SUMMARY – August 7, 2017

 

SAN DIEGO – Acharyya Rupak, also known as Rudy Rupak, was sentenced today before U.S. District Court Judge Cynthia A. Bashant, and ordered to serve 24 months in custody for crimes relating to his international surrogacy company, Planet Hospital. Judge Bashant also ordered Rupak to pay a $10,000 fine, and scheduled a restitution hearing on September 13, 2017, to determine how much Rupak must pay back to his victims.

 

Rupak was the founder and operator of Planet Hospital (“PH”), beginning in approximately 2003. PH has had business addresses in San Diego, Calexico, and Calabasas, California. PH facilitated medical tourism services, which are the visit of foreign patients to hospitals across international borders in order to receive medical treatment, including organ transplants and cosmetic surgery. In approximately 2006, PH began offering international surrogacy services, which is a surrogacy agreement involving an overseas country, and generally involves the carrying of a pregnancy by a surrogate for intended parents.

 

Beginning in approximately September 2012, and continuing through at least January 2014, Rupak made interstate wire transfers, with the intent to facilitate commercial bribery, in violation of California law. In furtherance of the commercial bribery, Rupak solicited, and instructed PH employees to solicit, medical tourism and international surrogacy clients by falsely representing that their funds would be “set aside,” or put in escrow accounts, and used only to pay for medical services provided to the respective client. In some instances, however, Rupak caused funds obtained from new PH clients to be used to pay for services provided to existing PH clients.

 

In particular, in December 2013, Rupak directed a PH employee to solicit funds from PH clients by fraudulently representing that the clients’ funds would be maintained in an escrow account. The clients were also told their funds would be sent to My Donor Cycle, a San Diego-based business for surrogacy egg donation services. Rupak instructed the PH employee to make the representation to the clients, however, without the knowledge or consent of My Donor Cycle. On December 5, 2013, the PH clients wire-transferred $24,000 to a bank account controlled by Rupak. Rupak, however, did not place the funds into escrow. Instead, Rupak comingled some of their funds with funds received from another PH client. He then wire-transferred the combined funds to My Donor Cycle to pay for services already provided to prior PH clients.

 

Rupak also initially undercharged PH clients for the cost of medical tourism and international surrogacy services in order to induce them to begin services through PH without knowing that additional payments would be required. Rupak, however, often failed to forward PH clients’ funds to service providers. The service providers included the Fertility Clinic Cancun (“FCC”) and the IREGA Clinic (“IREGA”), which were clinics that provided surrogacy services in Cancun, Mexico. Rupak’s failure to forward client funds to FCC and IREGA caused the service providers to demand additional funds from the PH clients in order to initiate or continue international surrogacy services.

 

Rupak made several excuses to PH clients for its failure to provide successful surrogacy services. He created a fraudulent website and email address through which he sent unauthorized emails in the name of a clinic and its physician to PH clients in order give false excuses why PH had not provided promised services. Rupak also instructed PH employees to make misrepresentations to PH clients regarding prior medical tourism and international surrogacy successes, and that unsuccessful surrogacy procedures were the fault of foreign service-providers, restriction from foreign laws, or failed bank transactions.

 

Apart from his work on behalf of PH, in order to obtain employment unrelated to medical tourism or international surrogacy, Rupak identified himself with an alias to potential employers in order to conceal his true identity and pending fraud allegations.

 

Rupak acknowledged that he caused total losses of at least $247,620, although the total losses will be determined at the restitution hearing.

 

In imposing custody, Judge Bashant noted that Rupak lied to vulnerable victims who were sick, and who were desperate for children.

 

Acting U.S. Attorney Robinson said, “The defendant betrayed the trust placed in him by people desperate to have a child. By preying on their vulnerable emotions, he was able to extract more money on the false promise that he was doing everything possible to help them obtain a baby. To use the dream of parenthood as leverage for obtaining fraudulent proceeds is intolerable and heartbreaking.”

 

“Today's sentencing is justice overdue for the many victims affected by this defendant’s deceitful practices,” stated FBI Special Agent in Charge Eric S. Birnbaum. “Acharyya Rupak can no longer prey upon those desperate to have a family.”

 

DEFENDANT

 

Acharyya “Rudy” Rupak Age: 49

 

SUMMARY OF CHARGE Case Number: 16CR1896

 

Title 18, United States Code, Section 1952(a)(3)(interstate or foreign travel in aid of racketeering enterprise)

Maximum penalty: 5 years of custody; $250,000 Fine

 

AGENCY

 

Federal Bureau of Investigation

Assistant U. S. Attorneys Emily Allen (619) 546-9738 and Benjamin Katz (619) 546-9604

NEWS RELEASE SUMMARY – August 3, 2017

SAN DIEGO – Jared Palmer, a former facilities manager for the San Diego Workforce Partnership, pleaded guilty today to embezzling more than $450,000 from the local Workforce Development Board that provides job training and placement to San Diego county residents and employers.

According to his plea agreement, Palmer, as facilities manager, was responsible for approving payment of invoices submitted by janitorial companies contracted to clean San Diego Workforce Partnership’s facilities. Between 2011 and 2016, Palmer instructed these contractors to purchase items that he claimed were for the Partnership’s use, including Nest Smart Thermostats, electronics, and pre-paid debit cards. Palmer then stole the items and replaced the invoices that included the cost of these stolen items with false invoices that made it appear as if all of the charges were for legitimate janitorial services. Over the course of five years, Palmer’s scheme netted him at least $455,606.

Because the Partnership, known as SDWP, is a Workforce Development Board funded largely by federal grant dollars, Palmer’s plea was to a count of Theft of Federal Program Funds, in violation of 18 U.S.C. § 666. Palmer’s plea agreement includes a restitution addendum, in which he agreed to pay SDWP back for his theft.

“This case represents the U.S. Attorney’s Office’s continued commitment to protecting non-profit organizations, especially those receiving federal grant money,” said Acting U.S. Attorney Alana W. Robinson.

“Jared Palmer, a former high level employee with the San Diego Workforce Partnership (SDWP), created and submitted fictitious invoices for janitorial services to SDWP in order to embezzle more than $450,000 in U.S. Department of Labor job training funds. Palmer’s actions deprived American workers from receiving critical job training services provided by SDWP. We will continue to work with our law enforcement partners to safeguard federal funds,” stated Abel Salinas, Special Agent-in-Charge of the Los Angeles Regional Office of the U.S. Department of Labor, Office of Inspector General.

“Mr. Palmer embezzled funds from the San Diego Workforce Partnership, which was providing a valuable and important service,” said Special Agent in Charge Eric S. Birnbaum. “Federal dollars were stolen as part of Mr. Palmer’s scheme. Simply, this will not be tolerated. The FBI will expose criminals who line their pockets out of greed and deceit while federally funded programs designed to help our community suffer.”

 

Palmer is scheduled to be sentenced on November 6, 2017.

DEFENDANT                                        Case Number: 17-cr-2157-LAB

Jared Palmer                                            Age: 41

SUMMARY OF CHARGES

Theft of Federal Program Funds, 18 U.S.C. § 666

Maximum penalty: 10 years’ imprisonment, fine double amount obtained, 3 years’ supervised release.

AGENCIES

Federal Bureau of Investigation – San Diego Field Office

U.S. Department of Labor – Office of Inspector General

 

 

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

 

SAN DIEGO – Jack Rissell was sentenced today to 24 months in prison for his role as an enforcer in the gambling organization run by former USC football player Owen Hanson.

Rissell entered a guilty plea to Hobbs Act extortion on December 15, 2016. According to the plea agreement, Owen Hanson hired to travel from California to Minnesota to collect a gambling debt from an individual living in Minneapolis. The agreement between and Hanson included a “contact fee” – a premium or bonus for assaulting the victim. Once located the victim at his Minneapolis apartment, he carried out this assault by striking the victim in the face and demanding that the victim repay the gambling debt he owed to Hanson. During the confrontation, the victim’s son was present in the apartment. In a subsequent email to Hanson, described the attack saying, “he went down like a bag of potatoes.”

Before sentencing Rissell to 24 months imprisonment, Judge Hayes described the premium payment as “cold blooded” and called Rissell’s involvement with Hanson as “egregious conduct” that left the victim in terror.

In total, 21 of 22 defendants charged in relation to Hanson’s enterprise have entered guilty pleas. The remaining defendant, Khalid Petras, is set for trial on August 29, 2017. He is accused of money laundering and running an illegal gambling business. The charges against this defendant are merely accusations, and he is considered innocent until proven guilty.

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.

DEFENDANT                           Case Number: 15CR2310-WQH

Jack Rissell                                 Age: 51

SUMMARY OF CHARGES

Hobbs Act Extortion, 18 U.S.C. § 1951

Maximum penalty: 20 years’ imprisonment, $250,000 fine, 3 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

 

Assistant U.S. Attorney Phillip L.B. Halpern (619) 546-6964

 

NEWS RELEASE SUMMARY – July 25, 2017

 

SAN DIEGO – Decorated Naval Veteran Anthony Ventura admitted today in federal court that he used his position as treasurer of the Distinguished Flying Cross Society to embezzle $124,000 in charity funds.

 

The defendant had a distinguished military career in which he flew numerous combat missions in Vietnam. Among other honors, he was awarded, the Vietnam Service Medal, the Republic of Vietnam Campaign Medal, the National Defense Service Medal, the Bronze Star, and the Distinguished Flying Cross. Following his military career, he had a number of jobs, including serving as a Senior Vice President with Wachovia Securities, LLC.

 

The Distinguished Flying Cross (“DFC”) is awarded to aviators and aircrew for heroism or extraordinary achievement during aerial flight. The first DFC medal was awarded by President Coolidge to Captain Charles A. Lindbergh for his solo flight across the Atlantic Ocean in 1927. Other recipients include Commander Richard E. Byrd and Amelia Earhart. It is the only medal conferred by all five military services in all wars and campaigns since World War I.

 

The Distinguished Flying Cross Society (“DFCS”) is a national society formed to honor men and women who have been awarded the Distinguished Flying Cross. The Society was founded on fraternity and fellowship among military fliers. It seeks to preserve the rich heritage and historical narratives of those who are recipients of the DFC and to educate the public as to the value of courage, patriotism and character. Among other things, the DFCS Teams with other organizations (e.g., the Congressional Medal of Honor Foundation) to educate young Americas. It also awards scholarships to the descendants of DFCS members, who are pursuing degrees at accredited institutions of higher learning.

 

From on or about July 2012 through January 2016, Ventura served as the Treasurer for the DFCS. In this capacity, he had access to and control over the DFCS’s bank accounts, credit card accounts, and bookkeeping records. As Treasurer of the DFCS, Ventura was the custodian of all DFCS funds and had fiduciary responsibility to: (i) ensure that all funds were deposited in a bank designated by the Board of Directors; (ii) oversee the disbursal of funds as authorized by the Chairman, President, or Board of Directors; (iii) prepare financial reports for Board meetings; and (iv) submit tax returns as required by State and Federal authorities.

 

In 2014, as result of a series of unfortunate business decisions, the defendant filed for personal bankruptcy. At this point, he had insufficient funds on hand to perform a number of activities, such as trading stocks and maintaining his stable of horses. In order to maintain his lifestyle, Ventura opened up a bank account at the Travis Credit Union that he concealed from the Board of Directors of the DFCS. He then transferred $124,000 of DFCS assets to the Travis Credit Union account. He used these funds for a variety of personal activities, including: (i) $30,561 to run his personal horse stable (“Sovran Star Stables); (ii) $67,000 to purchase stocks/bonds through a company he set up for that purpose (“Ironbeam LLC”); and (iii) $25,600 in cash withdrawals to cover personal living expenses. In order to conceal and disguise his theft of DFCS funds, Ventura created fake quarterly financial summaries for the DFCS Board of Directors.

 

In addition to the embezzlement of DFCS funds, Ventura also filed a false Charitable Organization Tax Form, Form 990-EZ, for the calendar year 2014. This return, which was verified by a written declaration that it was made under the penalties of perjury, falsely reported that the DFCS had cash, savings, and investments in the amount of $148,049, whereas in truth and fact, it had only $15,810.80 as Ventura had removed and converted to his personal use the rest of its funds.

 

“Regardless of how significant an individual’s contribution is to our society or how desperate their financial condition, there can be no excuse for stealing charitable funds that are destined for the awarding of scholarships,” said Acting U.S. Attorney Alana Robinson.

 

“The FBI is proud to serve this organization of war heroes by uncovering a scheme that stripped their funds intended for charitable and noble purposes," said Special Agent in Charge Eric S. Birnbaum.

 

“It is unfortunate that Naval Veteran Anthony Ventura’s service to this country will now be tarnished by his decision to embezzle funds from the Distinguished Flying Cross Society, which also led him to file a fraudulent tax return on its’ behalf,” stated Special Agent in Charge R. Damon Rowe for IRS Criminal Investigation. “Mr. Ventura ignored his duty to file an accurate tax return and will now be labeled a convicted felon, in addition to a decorated naval aviator.”

 

DEFENDANT:                                              Case Number 17cr1271-JLS

Anthony Ventura                                            Age: 71                 Lincoln, CA

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

 

 

AGENCY

 

Federal Bureau of Investigation

Internal Revenue Service - CI

 

 

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

 

NEWS RELEASE SUMMARY – July 24, 2017

 

SAN DIEGO – Daniel Portley-Hanks, a Los Angeles based private investigator, was sentenced today to 16 months in prison for his role in the gambling organization run by former USC football player Owen Hanson.

 

Portley-Hanks entered a guilty plea to Hobbs Act extortion on December 27, 2016. According to his plea agreement, he was paid $7,000 by Hanson to drive from Los Angeles to a Pennsylvania cemetery where the family burial plot of an individual who owed Hanson’s organization money was located. Once there, Portley-Hanks took photos of the family tombstone, splattered it with red paint, and later altered the photographs to add the targeted individual’s name and the words “Very Soon” as the date of death. Another photo was altered to include an image of a masked Hanson standing over the family grave with a shovel. The photos and other documents created by Portley-Hanks were then mailed to the individual along with a video depicting two beheadings.

 

The government’s sentencing documents attached numerous emails between Hanson and Portley-Hanks that showed that for a period of more than three years, Portley-Hanks assisted Hanson’s organization by running background and location checks on gamblers and law enforcement officers, conducting surveillance, and connecting Hanson with Jack Rissell, another co-defendant who served as an “enforcer” for Hanson’s enterprise.

 

Rissell – who also pleaded guilty to extortion – is scheduled to be sentenced on July 31, 2017. In total, 21 of 22 defendants charged in relation to Hanson’s enterprise have entered guilty pleas. The remaining defendant, Khalid Petras, is set for trial on August 29, 2017. He is accused of money laundering and running an illegal gambling business. The charges against this defendant are merely accusations, and he is considered innocent until proven guilty.

 

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.

 

DEFENDANT Case Number: 15CR2310-WQH

 

Daniel Portley-Hanks Age: 71

 

SUMMARY OF CHARGES

 

Hobbs Act Extortion, 18 U.S.C. § 1951

Maximum penalty: 20 years’ imprisonment, $250,000 fine, 3 years’ supervised release.

 

AGENCY

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

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

 

NEWS RELEASE SUMMARY – July 12, 2017

 

SAN DIEGO – Cynthia Lozano of Lemon Grove was sentenced in federal court today to 175 months in prison in connection with two complex frauds involving identity theft, false tax returns and hundreds of unwitting victims. The second fraud scheme was committed while she was awaiting sentencing for the first one. In total, Lozano sought over $2 million in refunds from false tax returns

 

Lozano, who appeared before U.S. District Court Judge Anthony J. Battaglia, was also ordered to pay $1,479,134.77 in restitution to the Internal Revenue Service and Department of Housing and Urban Development (“HUD”). In all, the defendant was sentenced for 84 counts of mail and wire fraud, false claims and aggravated identity theft.

 

In April 2013, Lozano was charged in a 33-count indictment (13CR1354-AJB) for filing false tax returns in the names of persons who were often unaware that she used their names and Social Security numbers to defraud the IRS. Lozano directed the IRS to deposit tax refunds via electronic transfer into bank accounts opened under the names of her relatives and associates. For some actual tax-preparation clients, Lozano claimed a larger refund from the IRS than she represented to her clients. She directed the IRS to deposit the excess amounts in one of the bank accounts under her control without her clients’ knowledge.

 

On February 13, 2015, Lozano pleaded guilty to aggravated identity theft and participation in her fraudulent scheme. In total, Lozano used the identities of over 200 victims to file over 400 federal tax returns, resulting in her receipt of over $1.5 million in fraudulently-obtained tax refunds between 2008 and 2013. Lozano used the majority of the funds obtained from her initial scheme to purchase 20 properties in and around Phoenix, Arizona. But her criminal conduct did not stop.

 

In June 2015, while Lozano was awaiting sentencing, agents from the Internal Revenue Service - Criminal Investigations (“IRS-CI”) and Department of Treasury, Inspector General for Tax Administration (“TIGTA”) discovered that Lozano filed additional federal tax returns in a manner similar to her previous scheme. Lozano was subsequently charged in a second indictment (16CR1332-AJB) with 51 additional counts, including false claims to the IRS, wire and mail fraud, and aggravated identity theft.

 

Some of the victims of Lozano’s 2015 scheme were actual or prospective tenants at the Arizona properties purchased by Lozano with funds from her earlier scheme. After Lozano purchased the properties, she transferred titles to the name of her mother, who does not live in the United States. Using her mother’s name as an alias, Lozano obtained authorization to rent some of the Arizona properties under the Section 8 Tenant-Based Assistance Housing Choice Voucher Program (“Section 8 program”) administered by the Department of Housing and Urban Development (“HUD”). Through the Section 8 program, a local Public Housing Authority supplements rent to a qualifying property owner on behalf of qualifying tenants. Lozano submitted false documents under her alias to HUD, under penalty of perjury, to qualify for supplemental rental payments under the Section 8 program.

 

For the 2015 scheme, Lozano obtained the names and Social Security numbers from her Section 8 tenants, and others who submitted rental applications to Lozano. She used their names and numbers to submit additional false federal tax returns. Lozano then directed the IRS to deposit the tax refunds into new bank accounts she opened with the assistance of two co-conspirators, Gerardo Baker and David Hernandez. Baker and Hernandez have since pleaded guilty and been sentenced for their participation in the conspiracy.

 

Lozano pleaded guilty to two counts of the first indictment (13CR1354-AJB) on February 13, 2015, and the remaining 31 counts on August 31, 2016. She pleaded guilty to all 51 counts of the second indictment (16CR1332-AJB) on November 15, 2016.

 

At sentencing, Judge Battaglia took special account of the fact that Lozano committed additional criminal conduct while out on bail. He said it was “a unique case that needs to be treated uniquely.” As part of the sentence, Judge Battaglia ordered that the restitution include $107,194 to HUD for the supplemental rental payments that Lozano she received as a result of her false statements. A status hearing regarding forfeiture of the properties Lozano purchased with the proceeds from the original scheme is scheduled for August 25, 2017.

 

Acting U.S. Attorney Robinson said, “The lying, cheating defendant went on a white-collar crime spree that continued even after she got caught. It is astounding that she committed a second major fraud while awaiting sentencing for the first. Her greed-fueled rampage ends today, with a sentence that recognizes the significant losses suffered by her victims, including U.S. taxpayers.”

 

“Using stolen identities, Cynthia Lozano filed hundreds of fraudulent tax returns, cheating the U.S. Treasury out of more than $1.5 million,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “She preyed on low income individuals, ripping off their personal information to file bogus tax returns and brazenly continued her criminal conduct even while awaiting sentencing in federal court on tax fraud and identity theft charges. Her 14 1/2 year sentence sends a clear message that the Department and IRS will aggressively investigate and prosecute those who steal taxpayer identities and file fraudulent claims for refund.”

 

“Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law,” stated IRS Criminal Investigation Special Agent in Charge R. Damon Rowe. “IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney’s Office and the Justice Department’s Tax Division, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”

 

“This is a case about the irresistibility of greed,” said Rod Ammari, Special Agent in Charge, San Francisco Field Division, TIGTA Office of Investigations. “Even though Ms. Lozano had pleaded guilty and awaited sentencing on 51 counts of aggravated identity theft, wire and mail fraud, she could not resist the temptation of engaging in additional criminal illegal schemes to steal more identities and file additional fraudulent tax returns -- 69 new fraudulent tax returns to be exact.

 

“Fortunately, we were able to bring this individual to justice for the additional crimes she committed. We wish to thank our law-enforcement partners at the Justice Department and IRS Criminal Investigation for their outstanding collaboration and teamwork during this long and complicated investigation.”

 

DEFENDANT

 

Cynthia Lozano                                    Age: 35

 

SUMMARY OF CHARGE             

 

Case Number: 13CR1354-AJB

 

1. 1-13: Title 18, United States Code, Section 287 (false claims)

Maximum penalty: 5 years of custody; $250,000 Fine

 

Counts 14-25: Title 18, United States Code, Section 1343 (wire fraud)

Maximum penalty: 20 years of custody; $250,000 Fine

 

Count 26: Title 18, United States Code, Section 1341 (mail fraud)

Maximum penalty: 20 years of custody; $250,000 Fine

 

Counts 27-33 Title 18, United States Code, Section 1028A (aggravated identity theft)

                        Minimum penalty: 2 years of custody, consecutive to sentence for other crimes; No Probation; Fine same as for underlying offense

 

 

Case Number: 16CR1332-AJB

 

Count 1: Title 18, United States Code, Section 371 (conspiracy)

Maximum penalty: 5 years of custody; $250,000 Fine

 

Counts 2-15: Title 18, United States Code, Section 287 (false claims)

Maximum penalty: 5 years of custody; $250,000 Fine

 

Counts 16-17: Title 18, United States Code, Section 1343 (wire fraud)

Maximum penalty: 20 years of custody; $250,000 Fine

 

Count 18-29: Title 18, United States Code, Section 1341 (mail fraud)

Maximum penalty: 20 years of custody; $250,000 Fine

 

Counts 30-37: Title 18, United States Code, Section 641 (theft of government property)

Maximum penalty: 10 years of custody; $250,000 Fine

 

Counts 38-51: Title 18, United States Code, Section 1028A (aggravated identity theft)

Minimum penalty: 2 years of custody, consecutive to sentence for other crimes; No Probation; Fine same as for underlying offense

 

AGENCIES

 

Internal Revenue Service - Criminal Investigations (“IRS-CI”)

Department of Treasury, Inspector General for Tax Administration (“TIGTA”)

A Lemon Grove, California woman was sentenced to serve 175 months in prison for her role in two stolen identity refund fraud schemes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson of the Southern District of California.

In April 2013, Cynthia Lozano was charged in a 33-count indictment for using stolen identities to file fraudulent tax returns with the Internal Revenue Service (IRS). According to the indictment as well as documents and information provided to the court, Lozano directed the IRS to deposit the refunds into bank accounts in the names of her relatives and associates. For some actual tax-preparation clients, Lozano claimed a larger refund from the IRS than she represented to her clients. She directed the IRS to deposit the excess amounts into a bank account she controlled without her clients’ knowledge.

On Feb. 13, 2015, Lozano pleaded guilty to aggravated identity theft and participation in her fraudulent scheme. In total, Lozano used the identities of over 200 victims to file over 400 returns, resulting in her receipt of approximately $1.5 million in fraudulently obtained refunds between 2008 and 2013.

In June 2015, while Lozano was awaiting sentencing, agents from the IRS Criminal Investigation (CI) and Department of Treasury, Inspector General for Tax Administration (TIGTA) discovered that Lozano filed additional fraudulent returns in a manner similar to her previous scheme. Lozano was subsequently charged in a second indictment with 51counts, including filing false claims for refund, wire and mail fraud, and aggravated identity theft.

Some of the victims of Lozano’s 2015 scheme were actual or prospective tenants of properties she purchased and titled in the name of her relative, who does not live in the United States. Using her relative’s name as an alias, Lozano obtained authorization to rent some of the Arizona properties under the Section 8 Tenant-Based Assistance Housing Choice Voucher Program (Section 8 program) administered by the Department of Housing and Urban Development (HUD). Through the Section 8 program, a local Public Housing Authority (PHA) supplements rent to a qualifying property owner on behalf of eligible tenants. Lozano submitted false documents under her alias to HUD, under penalty of perjury, to qualify for supplemental rental payments under the Section 8 program.

For the 2015 scheme, Lozano stole the names and social security numbers from her Section 8 tenants, and others who submitted rental applications to Lozano and used them to file additional false returns. Lozano then directed the IRS to deposit the refunds into bank accounts she opened with the assistance of two co-conspirators, Gerardo Baker and David Hernandez. Baker and Hernandez have since pleaded guilty and been sentenced for their participation in the conspiracy.

“Using stolen identities, Cynthia Lozano filed hundreds of fraudulent tax returns, cheating the U.S. Treasury out of more than $1.5 million,” said Acting Deputy Assistant Attorney General Goldberg. “She preyed on low income individuals, ripping off their personal information to file bogus tax returns and brazenly continued her criminal conduct even while awaiting sentencing in federal court on tax fraud and identity theft charges. Her 14 1/2 year sentence sends a clear message that the Department and IRS will aggressively investigate and prosecute those who steal taxpayer identities and file fraudulent claims for refund.”

“The lying, cheating defendant went on a white-collar crime spree that continued even after she got caught,” said Acting U.S. Attorney Robinson. “It is astounding that she committed a second major fraud while awaiting sentencing for the first. Her greed-fueled rampage ends today, with a sentence that recognizes the significant losses suffered by her victims, including U.S. taxpayers.”

“Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law,” said Special Agent in Charge R. Damon Rowe of IRS-CI. “IRS Criminal Investigation, along with our law enforcement partners and the U.S. Attorney’s Office and the Justice Department’s Tax Division, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the U.S. Treasury and blatantly disregard the victims of their schemes.”

“This is a case about the irresistibility of greed,” said Special Agent in Charge Rod Ammari of TIGTA Office of Investigations San Francisco Field Division. “Even though Ms. Lozano had pleaded guilty and awaited sentencing on 51 counts of aggravated identity theft, wire and mail fraud, she could not resist the temptation of engaging in additional criminal illegal schemes to steal more identities and file additional fraudulent tax returns -- 69 new fraudulent tax returns to be exact.”

In addition to the terms of prison imposed, U.S. District Court Judge Anthony J. Battaglia ordered Lozano to serve three years of supervised release, to pay $1.479 million in restitution to include the IRS and HUD. Lozano is alleged to have used illegal proceeds from the first scheme to purchase properties in and around the Phoenix, Arizona area. A forfeiture hearing will be scheduled at a later date. Lozano pleaded guilty to two counts of the first indictment on Feb. 13, 2015, and the remaining 31 counts on Aug. 31, 2016. She pleaded guilty to all 51 counts of the second indictment on Nov. 15, 2016.

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of IRS–CI and TIGTA, who conducted the investigation, and Trial Attorney Thomas Flynn of the Tax Division and Assistant U.S. Attorney Christopher Tenorio, who prosecuted this case.

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

Special Assistant U.S. Attorney Beena M. McDonald (619) 546-9774

Assistant U.S. Attorneys Patrick J. Bumatay (619) 546-8450 and Michael Wheat (619) 546-8437

 

NEWS RELEASE SUMMARY – July 10, 2017

 

SAN DIEGO – Pedro Velasco-Manzano was sentenced in federal court today to 12 months in custody for actions that ultimately resulted in the deaths of two unauthorized immigrants who perished in the trunk of a car at the San Ysidro Port of Entry in August 2014.

 

As part of the plea agreement, Velasco-Manzano, a citizen of Mexico, admitted he helped arrange the smuggling of Mexican citizens Tarcisio Casas-Blanco and Jose Aurelio Quiroz-Casas into the United States in August 2014 for a fee of $11,500 – an amount that included his $200 take. After speaking directly with the victims, Velasco-Manzano arranged for them to be housed in Tijuana until plans for a smuggling event could be made by his superiors. Velasco-Manzano then transported the victims from their stash house and delivered them directly to the smugglers, Nicholas George Zakov and Eduard Ervemac Saavedra.

 

Saavedra enticed Zakov to smuggle the victims into the United States with the prospect of $3,500 cash. On the morning of August 12, 2014, Saavedra arranged for the two victims to be hidden in the trunk of Zakov’s Dodge Challenger in Tijuana, Mexico. Saavedra then directed Zakov to enter the United States through the San Ysidro Port of Entry with Casas-Blanco and Quiroz-Casas remaining in the trunk, exposing them to rising temperatures and little ventilation. U.S. Customs and Border Protection officers later discovered Casas-Blanco and Quiroz-Casas unresponsive inside the Challenger’s trunk. Medical attention was immediately sought for the two, but they died a short while later of hyperthermia and mechanical asphyxiation.

 

Zakov, a U.S. citizen, pleaded guilty in 2015 to alien smuggling charges for his role in the deaths of the victims and was sentenced to 84 months in prison. Saavedra, a Peruvian citizen, pleaded guilty in 2016 to alien smuggling charges for his role in the deaths of the victims and was sentenced to 63 months in prison. U.S. District Judge Anthony J. Battaglia sentenced Zakov, Saavedra, and now Velasco-Manzano.

 

The investigation and arrest of Velasco-Manzano was the result of the collaboration of Homeland Security Investigations, U.S. Customs and Border Protection, San Diego Police Department, and the Baja California State Preventive Police Department.

 

DEFENDANT                                   Criminal Case No. 17CR0561-AJB

 

Pedro Velasco-Manzano                     Age: 44                      Oaxaca, Mexico

 

SUMMARY OF CHARGES

 

Counts 1 and 2: Encouraging and Inducing Illegal Aliens, Aiding and Abetting, 8 U.S.C. §1324(a)(1)(A)(iv), and (v)(II)

 

INVESTIGATING AGENCIES

 

U.S. Customs and Border Protection

Homeland Security Investigations

San Diego Police Department

Baja California State Preventive Police Department

 

 

 

 

Assistant U. S. Attorney David Leshner (619) 546-7921

 

NEWS RELEASE SUMMARY – June 22, 2017

 

SAN DIEGO – U.S. Border Patrol Agent Noe Lopez pleaded guilty to drug trafficking charges in federal court today, admitting that he attempted to smuggle methamphetamine and cocaine while on duty in exchange for cash.

 

In a hearing before U.S. Magistrate Judge Andrew G. Schopler, Lopez pleaded guilty to two counts of attempted distribution of methamphetamine and cocaine, in violation of 21 U.S.C. §§ 841 (a) (1) and 846. Sentencing is scheduled for September 8, 2017 at 9 a.m. before U.S. District Judge Dana M. Sabraw.

 

“It’s an audacious thing for an on-duty Border Patrol agent to transport what he believes to be methamphetamine and cocaine in his official vehicle, on behalf of drug traffickers,” said Acting U.S. Attorney Alana W. Robinson. “While there are a relatively small number of them, corrupt Border Patrol agents are a national security threat, and for that reason they are a very high prosecutorial priority.”

 

“The U.S. Border Patrol stresses honor and integrity in every aspect of our mission; Honor First is our Motto,” said Chief Patrol Agent Richard A. Barlow of San Diego Sector Border Patrol. “Mr. Lopez’ action is a stain on the agents and employees of the Border Patrol who perform their duties with honor and distinction, working diligently day-to-day to keep our country safe. We do not tolerate corruption within our ranks, and are grateful to the hard work of the Border Corruption Task Force and other agencies that rooted out Mr. Lopez’ atrocious behavior.”

 

FBI Special Agent in Charge Eric S. Birnbaum said, “The vast majority of public servants who work at the local, state, and federal levels of government are honest and dedicated folks who strive every day to do the right thing for their constituents, their communities, and their country. In the U.S. and abroad, the FBI is doing everything we can to help ensure that the good name of the vast majority of public servants is not besmirched by a corrupt few. This type of corruption at our San Diego borders strikes at the heart of government and erodes public confidence, therefore, the investigation of public corruption is one of FBI’s top criminal priorities.”

 

According to the plea agreement, in November 2016, Lopez and a confidential source whom Lopez believed to be a drug trafficker agreed to a plan whereby Lopez would retrieve backpacks containing what Lopez believed to be controlled substances from the north side of the United States/Mexico border fence while on duty with the Border Patrol.

Lopez admitted that he agreed to transport the backpacks in his Border Patrol vehicle and deliver them to the source in exchange for thousands of dollars.

 

On November 30, 2016, Lopez purchased three backpacks that would be used to transport the controlled substances and gave the backpacks to the source. They agreed that on December 6, 2016, Lopez would retrieve a backpack containing six pounds of methamphetamine while on duty with the Border Patrol and deliver the backpack to the source. Lopez told the source where to place the backpack containing methamphetamine on the north side of the United States/Mexico border.

 

According to Lopez’s admissions in his plea agreement, on December 6, 2016, undercover DEA agents placed a backpack (one of the three backpacks purchased by Lopez) containing six pounds of a substance resembling methamphetamine near the prearranged location. Lopez drove to the location in his Border Patrol vehicle and retrieved the backpack. He returned to the Border Patrol Station and placed the backpack in his personal vehicle. At the conclusion of his Border Patrol work shift, Lopez met the source at a parking lot in Chula Vista, where Lopez gave the source the backpack containing what Lopez believed to be six pounds of methamphetamine.

 

On December 7, 2016, the source paid Lopez $3,000 for retrieving and delivering the purported methamphetamine.

 

This scenario was repeated on December 8, 2016, except the backpack purportedly contained seven kilograms of cocaine. On December 9, 2016, the source paid Lopez $7,000 for retrieving and delivering the purported cocaine.

 

DEFENDANT                                      Case Number 17cr0086

Noe Lopez                                             Age: 37                                          Chula Vista, CA

 

SUMMARY OF CHARGES

 

Attempted Distribution of Methamphetamine and Cocaine, in violation of 21 U.S.C. 841 (a) (1) and 846

Maximum penalty: Life in prison and $10 million fine

 

AGENCIES

 

Federal Bureau of Investigation

U.S. Drug Enforcement Agency

U.S. Border Patrol

 

 

 

Assistant U. S. Attorney Andrew P. Young (619) 546-7981

 

NEWS RELEASE SUMMARY – June 20, 2017

 

SAN DIEGO – A former executive at Vibra Bank pleaded guilty to causing the filing of false bank reports today, admitting that he caused Vibra Bank to create false anti-money laundering reports as part of an effort to conceal his role in a scheme to structure $70,000 in cash deposits into numerous bank accounts at the bank.

 

According to a plea agreement, in June 2010, Dan Schon was a Senior Vice President at Vibra Bank. According to the plea agreement, on June 9 and June 10, 2010, Schon and another individual structured approximately $70,000 in cash deposits into various bank accounts at the bank. As part of the plea agreement, the defendant acknowledged that after he participated in the structuring scheme, he was approached by Vibra Bank personnel who had discovered the transactions and were investigating the transactions as part of an Anti-Money Laundering program. During his interview, Schon made at least five false statements to the Vibra Bank employees who then incorporated those false statements into an Anti-Money Laundering report.

 

Among the false statements made by Schon was a claim that all of the money he deposited was his, that the money he wired to another individual was intended as an investment related to oil and gas, and that he had no knowledge of any of the other structured deposits.

 

“Today’s guilty plea shows Homeland Security Investigation’s commitment to disrupt financial crimes at the highest levels,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI special agents are highly trained to detect violations of the anti-money-laundering rules at all levels in U.S. financial systems.”

 

Schon is scheduled to be sentenced on August 21, 2017 at 9 a.m. before U.S. District Judge Michael M. Anello.

 

DEFENDANT Case Number

 

Dan Schon Age: 35 Residence: Mexico City

 

SUMMARY OF CHARGES

 

Making a False Statement to a Bank, 18 U.S.C. 1005

 

Maximum Penalties: 30 years in prison and $1 million fine.

 

INVESTIGATING AGENCY

 

Department of Homeland Security

Assistant U.S. Attorney Jarad E. Hodes (619) 546-7432

 

NEWS RELEASE SUMMARY – June 19, 2017

 

SAN DIEGO – A long-term investigation by the U.S. Drug Enforcement Administration has led to one of the nation’s largest seizures of the deadly synthetic opiate fentanyl and a federal indictment against three alleged traffickers.

 

According to the indictment unsealed today, Jonathan Ibarra, Hector Fernando Garcia and Anna Baker are charged with possession of 44.14 kilograms of fentanyl with the intent to distribute. Most of the fentanyl was seized from a house in Lemon Grove.

 

According to a search warrant affidavit, the defendants discussed the transportation of a then-unidentified controlled substance. On November 30, 2016, Ibarra received instructions to have a female courier, later identified as Baker, transport the narcotics in three separate trips on consecutive days.

 

Based on this information, agents requested a traffic stop of Baker’s rented vehicle and seized about 15 kilograms of a substance later determined to be fentanyl. Law enforcement officers then obtained a search warrant for Baker’s residence, where they found about 30 additional kilograms of the same substance.

 

Drug traffickers use the pure fentanyl powder to increase the potency of heroin or to manufacture counterfeit opioid painkillers that resemble oxycodone. Due to fentanyl’s extreme potency - up to 50 times stronger than heroin - deaths from fentanyl-laced heroin and counterfeit pills are epidemic in the United States. Considering that just 3 milligrams is enough to kill an adult male, the 44.14 kilogram seizure represents over 14 million lethal doses. The attached photo, prepared by the San Diego County Medical Examiner, shows the lethal dose of fentanyl on a penny.

 

The defendants were arraigned on the indictment today before U.S. Magistrate Judge Barbara L. Major.

 

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

 

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

 

DEFENDANTS

 

Jonathan Ibarra Age: 45 Lemon Grove, California

Hector Fernando Garcia Age: 46 San Diego, California

Anna Baker Age: 30 Lemon Grove, California

 

SUMMARY OF CHARGES

 

Possession of Fentanyl with Intent to Distribute – Title 21, U.S.C., Section 841(a)(1)

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

 

AGENCY

 

United States Drug Enforcement Administration

 

 

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

 

NEWS RELEASE SUMMARY – June 19, 2017

 

SAN DIEGO – Two local tax preparers and their recruiter were sentenced today in federal court to 30 months in prison for their involvement in a tax preparation scam that resulted in the filing of hundreds of false returns, the theft of dozens of victims’ personal information and the receipt of more than $882,000 in bogus federal income tax refunds.

 

U.S. District Judge Roger T. Benitez sentenced Rahim Ali Cummings and Rashad Abdul-Rahim for conspiring to commit mail fraud, file false claims for tax refunds, fraudulent use of a Social Security number (SSN) and aggravated identity theft; Ebrahim Ashamu was sentenced for filing false claims for tax refunds and aggravated identity theft. Each of the defendants has been in custody since last year.

 

As detailed in their plea agreements, between September 2011 and September 2012, Cummings and Ashamu prepared and filed the false tax returns out of their businesses in El Cajon, California, and employed the services of Abdul-Rahim to recruit customers and obtain stolen identities. Abdul-Rahim solicited and obtained the personal identifying information from the victims using false pretenses, such as informing the victims they could obtain “free” government money from alleged grant and senior programs, and concealing the fact that their personal information would be used to file false tax returns.

 

Abdul-Rahim then provided Cummings and Ashamu with the personal information of the victims, which they used to prepare and file the false tax returns with the Internal Revenue Service (IRS). An investigation by IRS, Criminal Investigation and the United States Secret Service showed that Cummings, Ashamu, and Abdul-Rhaim defrauded customers from their ethnic community, many of whom were immigrants from countries such as Somalia and Nigeria who knew very little, if anything, about the United States tax laws.

 

Cummings, Ashamu, and Abdul-Rahim did not shy away from personally profiting from their fraudulent scheme. Each defendant directed the fraudulent tax refunds to be deposited into bank accounts under their control and ordered U.S. Treasury checks to be mailed to addresses under their control. In particular, Cummings received approximately $470,042 in fraudulent refunds deposited into bank accounts he controlled. Ashamu received approximately $367,631. Abdul-Rahim received approximately $44,937 in fraudulent refunds and additional cash payments from Cummings and Ashamu for providing the victims’ personal information. As a result of their crimes, Cummings, Ashamu and Abdul-Rahim caused approximately $882,610 in losses to the IRS. Each defendant has been ordered to make full restitution to the IRS for the total amount of false refunds they each received.

 

Following today’s sentencing hearing, Cummings, Ashamu, and Abdul-Rahim will be permanently enjoined from preparing or filing federal income tax returns for anyone other than themselves. A civil complaint will be filed against them, and a permanent injunction will be entered to prevent Cummings, Ashamu and Abdul-Rahim from acting as a tax preparer in the future.

 

“This type of fraud increases the burden on honest taxpayers and negatively impacts honest citizens’ confidence in our tax system,” said Acting U.S. Attorney Alana W. Robinson. “The combination of tax fraud and identity theft continues to be a challenging law enforcement problem. Unscrupulous tax preparers and their associates should take notice: if you defraud the IRS and unsuspecting members of the public, law enforcement will bring you to justice and seek to hold you accountable.”

 

“Today, justice is served, and these three individuals are being held accountable for their criminal actions,” stated R. Damon Rowe, Special Agent in Charge for IRS Criminal Investigation. “IRS special agents work diligently to identify and bring to prosecution those who use taxpayer’s personal identifying information to file fraudulent tax returns. It’s a matter of maintaining public confidence in the integrity of the U.S. tax system and protecting the identities of those we serve.”

 

“Identity theft and the unauthorized use of individuals’ personal identifying information continues to impose significant financial harm to American citizens and businesses,” said David J. Murray, Special Agent-in-Charge of the San Diego Field Office of the Secret Service. “The sentences imposed today should be a reminder that the United States Secret Service will continue to collaborate with its law enforcement partners and the United States Attorney’s Office to arrest and prosecute criminals who take advantage of innocent victims for their own economic gain.”

 

The public is reminded that tax-related identity theft occurs when someone uses your stolen SSN (or the SSN of a dependent) to file a tax return claiming a fraudulent refund. If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:

 

• Respond immediately to any IRS notice; call the number provided.

• Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return is rejected because of a duplicate filing under your SSN. Attach the competed form to your return and mail according to instructions.

• Continue to pay your taxes and file your tax return, even if you must do so by paper.

• If you previously contacted the IRS and did not have a resolution, you may contact them for specialized assistance at 1-800-908-4490.

 

Link: The link to IRS Form 14039 = https://www.irs.gov/pub/irs-pdf/f14039.pdf

 

DEFENDANTS                      Criminal Case No. 16CR0768-BEN

Rahim Ali Cummings             Age: 47                      Detroit, Michigan

Ebrahim Ashamu                    Age: 58                      El Cajon, California

Rashad Abdul-Rahim             Age: 46                      El Cajon, California

 

 

CHARGES THAT DEFENDANTS CUMMINGS AND ABDUL-RAHIM SENTENCED ON:

Count 1 – Title 18, United States Code, Section 286 B Conspiracy to Commit Mail Fraud, File False Claims, Fraudulently Use a Social Security Number of Another, and Aggravated Identity Theft

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

 

CHARGES THAT DEFENDANT ASHAMU SENTENCED ON:

 

Count 33 – Title 18, United States Code, Section 287 B Filing False, Fictitious and Fraudulent Claims

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

 

Count 56 – Title 18, United States Code, Section 1028A – Aggravated Identity Theft

Maximum penalties: Mandatory 2-year sentence, to be served consecutive to any other prison term, $250,000 fine, 3 years of supervised release.

 

 

INVESTIGATING AGENCIES

 

Internal Revenue Service-Criminal Investigation

United States Secret Service

 

 

A Retired U.S. Navy Captain was sentenced in federal court today to 41 months in prison for his role in a massive bribery and fraud scheme involving foreign defense contractor Leonard Glenn Francis and his firm, Singapore-based, Glenn Defense Marine Asia (GDMA).

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson Southern District of California, Director Dermot O'Reilly of the Defense Criminal Investigative Service and Director Andrew Traver of the NCIS made the announcement.

In addition to the 41-month prison sentence, U.S. District Judge Janis L. Sammartino ordered Michael Brooks, 59, of Fairfax Station, Virginia, to pay a $41,000 fine and $31,000 in restitution to the U.S. Navy.  Brooks pleaded guilty in November 2016 to one count of conspiracy to commit bribery.

Brooks, who served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines, from 2006 to 2008, has admitted accepting bribes of travel and entertainment expenses, hotel rooms and the services of prostitutes. In return, Brooks admitted that he used his power and influence to benefit GDMA and Francis, including by securing quarterly clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic imprimatur of the U.S. Embassy. Neither GDMA nor any other defense contractor has ever been granted such unfettered clearances.

Brooks admitted that he also allowed Francis to ghostwrite official U.S. Navy documents and correspondence, which Brooks submitted as his own. For example, Brooks admitted allowing GDMA to complete its own contractor performance evaluations. A November 2007 evaluation, drafted by GDMA and submitted by Brooks, described the company’s performance as “phenomenal,” “unsurpassed,” “exceptional” and “world class.” Brooks also admitted providing Francis with sensitive, internal U.S. Navy information, including U.S. Navy ship schedules and billing information belonging to a GDMA competitor, at times using a private Yahoo! e-mail account to mask his illicit acts.

Twenty-one current and former Navy officials have been charged so far in the fraud and bribery investigation; 10 have pleaded guilty and 10 cases are pending. In addition, five GDMA executives and GDMA the corporation have pleaded guilty.

NCIS, DCIS and DCAA are conducting the ongoing investigation. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

Anyone with information relating to fraud, corruption or waste in government contracting 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.

A federal jury convicted a Manhattan Beach, California resident today of wire fraud and filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson for the Southern District of California.

 

According to the evidence presented at trial, James Miller was the president and managing partner of MWRC Internet Sales LLC, an Internet sales company. As part of his duties, Miller had check signing authority for the company’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 did not report it on his personal tax returns for 2009 through 2012, causing a tax loss of approximately $58,000.

 

Sentencing is scheduled for Aug. 7, 2017. Miller faces a statutory maximum sentence of 20 years in prison for each count of wire fraud and three years in prison for each count of filing a false tax return. He also faces a period of supervised release, restitution and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of FBI and Internal Revenue Service Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Benjamin Weir of the Tax Division, who prosecuted the case.

 

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

 

SAN DIEGO – Three individuals were arrested today in connection with a scheme to defraud victims seeking immigration status in the United States. As part of the fraud, two of defendants – Hardev Panesar and Rafael Hastie – posed as officers of the Department of Homeland Security (DHS) and promised that they could obtain immigration status for people in exchange for exorbitant fees. Gurdev Singh is also charged with assisting his conspirators in the fraudulent scheme.

 

According to a federal grand jury indictment unsealed today, although Panesar and Hastie have never worked at DHS, since at least 2014 they falsely claimed to be DHS agents and falsely stated they had the authority to obtain lawful immigration documents and legal status for individuals who lacked such status in the United States. Panesar and Hastie also falsely claimed they had the power to stop deportation proceedings.

 

According to the Indictment, the defendants defrauded victims out of approximately $6,000,000 from the scheme. Panesar, Hastie and Singh collected fees from victims under the guise that they would be able to provide immigration documents, and concealed from victims the fact that they would never be able to obtain immigration documents or status in the United States. Instead, the defendants converted the proceeds from the scheme to their personal use and benefit. Panesar, Hastie, Singh and others have solicited and recruited victims across the United States, including California and Indiana, and Mexico.

 

Panesar and Hastie convinced victims that they were agents, in part, because they showed fake agency credentials when meeting with the victims. Panesar and Hastie also provided immigration applications to victims and took fingerprints supposedly for immigration forms. They often demanded more money to speed up the process or guarantee the immigration documents by a certain date. Panesar, Hastie, and Singh never delivered on their promise to provide immigration documents, despite collecting thousands of dollars from each of the more than 150 victims.

 

The investigation into this case continues. The San Diego Division of the Federal Bureau of Investigation (FBI) is seeking possible victims in this investigation from 2000 through 2017.

If you believe you are a potential victim of this crime, please fill out the questionnaire at https://forms.fbi.gov/SDImmigrationFraud or email the FBI at SDImmigrationFraud@ic.fbi.gov.

 

DEFENDANTS Case Number: 17CR1371-GPC

Name

Age

City

Hardev PANESAR

69

El Cajon, California

Rafael HASTIE

47

Tijuana, Mexico

Gurdev SINGH

56

Bakersfield, California

 

 

 SUMMARY OF CHARGES

 

Count 1: 18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud; Maximum Penalty 20 years in prison, $250,000 fine, forfeiture and restitution. (All defendants)

 

Counts 2-4: 18 U.S.C. § 1343, Wire Fraud; Maximum Penalty 20 years in prison, $250,000 fine, forfeiture and restitution (All defendants)

 

Counts 5-10: 18 U.S.C. § 912, False Personation of an Officer or Employee of the United States; Maximum Penalty 3 years in prison, $250,000 fine (Panesar and Hastie)

 

Count 11: 31 U.S.C. § 5324(a)(3), Structuring Domestic Financial Institutions; Maximum Penalty 10 years in prison, $250,000 fine, forfeiture (Panesar)

 

 

AGENCY

 

Federal Bureau of Investigation

 

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

Assistant U. S. Attorneys Alexandra Foster (619) 546-6735 and Sabrina Feve (619) 546-6786

 

NEWS RELEASE SUMMARY – May 25, 2017

 

SAN DIEGO – Joseph Daniel Saucedo of Vista pleaded guilty in federal court today to charges, admitting that he attempted to manipulate two children, ages 11 and 16, into sending sexually explicit photographs of themselves, and then threatened to expose them if they refused to continue.

 

According to the facts in the plea agreement, Saucedo posed as a teenage girl, “Amy Jennings,” and began communicating on-line with an 11-year-old Canadian boy. At first the two had normal conversations about everyday life. But then Saucedo, pretending to be “Amy,” sent naked pictures of young girls and asked the boy to communicate with her friend, Saucedo, in return. When the boy refused, “Amy” posted a photograph of his house, told the boy she knew where he lived, and threatened to shame him into communicating with Saucedo.

 

The boy ultimately relented and texted Saucedo, who then communicated with the boy using FaceTime and displayed his naked front torso. The boy hung up on Saucedo but the calls and the threats continued until, finally, on January 25, 2016, the boy received a message from “Amy,” which included a video of a young boy masturbating. “Amy” threatened to leak the video and claim it was the Canadian boy if the boy did not send naked pictures of himself to Saucedo.

 

Additional investigation revealed that Saucedo had been in communication with other young children, successfully soliciting sexually graphic images from them. For example, in August 2015, Saucedo struck up a conversation with a 16-year-old girl in Florida through Instagram. This time, Saucedo pretended to be a modeling agent looking for “bikini and nude models,” adding, “obviously the pay is great.” When the Florida girl told Saucedo that she was only 16 and would have to check with her parents, he volunteered that they could just “make a portfolio” at no cost to her, and “then we can talk to your parents.” She demurred again, telling Saucedo that she had “never been comfortable in my skin.” He promised to “help with that hun if you want we can FaceTime so nothing is saved.”

 

She continued to refuse his overtures until Saucedo, under the guise of “Amy Jennings,” threatened to blackmail the girl. The girl turned to Saucedo for help with “Amy.” Although he initially claimed no knowledge of Amy Jennings and insisted his modeling business was legitimate, he quickly agreed to help the girl, for a price: Nude pictures of herself. He even asked her to “[w]rite my name on a paper or hand so I know it’s a new one.” She acquiesced and sent him pictures of her breasts with “Joe” written across her chest.

 

Saucedo demanded that the girl continue sending him naked photographs, or “Amy” would post compromising pictures of the girl. The girl volunteered that she was “looking into Kik’s legal system” to handle the threatening “Amy” posts. Within seconds, Saucedo responded, “Na I’ll pay her I don’t want you to get in trouble.” Saucedo no doubt feared that alerting Kik to “Amy Jennings” could have compromised his illegal activities. Saucedo told the girl that he had paid “Amy Jennings” $2,000. As a thank you, the girl agreed to a sexually explicit FaceTime chat with Saucedo.

 

Saucedo continued to hound the girl for almost a year, from August 2015 to June 2016, requesting more naked photographs. He even sent her a photo of stacks of money to elicit more naked photographs. She sent him one more photograph in October 2015, but then stopped responding.

 

Sentencing is scheduled for August 25, 2017 at 9:00 a.m. before U.S. District Judge Janis L. Sammartino.

 

DEFENDANT                             Case Number: 17-CR-00095-JLS

 

Joseph Daniel Saucedo                 Age: 26                            Vista, CA

 

SUMMARY OF CHARGES

 

Counts One and Two

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

Minimum Penalty: 15 years

Maximum Penalty: 40 years

 

AGENCY

 

Homeland Security Investigations

United States Secret Service

SAN DIEGO – Nine members of the Hooligans Motorcycle gang are charged in a federal grand jury indictment with participating in a sophisticated scheme to steal scores of Jeep Wranglers and motorcycles in San Diego County using handheld electronic devices and stolen codes.

 

According to court records, the transnational criminal organization is responsible for the theft of more than 150 Jeep Wranglers worth approximately $4.5 million within San Diego County since 2014. The Hooligans used high-tech methods to disable security systems and steal away with Jeeps in just a few minutes, in the middle of the night, while unsuspecting owners slept nearby. After stealing the Jeeps in San Diego County, the Hooligans transported them to Tijuana, Mexico, where the vehicles were sold or stripped for parts.

 

Three of nine defendants are in custody, including two that were arrested today at a home in Spring Valley and at the border; the rest are fugitives believed to be in Mexico. The defendants are scheduled to make first appearances in federal court either today at 2 p.m. or tomorrow at 2 p.m. before U.S. Magistrate Judge Mitchell D. Dembin.

 

“The joy ride is over for these Hooligans,” said Deputy U.S. Attorney Mark Conover. “For many of us, our cars are our most valuable possessions. These arrests have put the brakes on an organization that has victimized neighborhoods in a different way – by stealing something very personal. Something that required a lot of sacrifice to purchase.”

 

“Through the remarkable diligence and work ethic of Regional Auto Theft Task Force detectives, and the inter-agency cooperation with the FBI and the U.S. Attorney's office, a powerful case has been brought against the Hooligans gang,” said California Highway Patrol Captain Donald Goodbrand, head of the multi-agency Regional Auto Theft Task Force, which cracked the case.

 

“The work of law enforcement and crime fighting is 24/7,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI, along with our law enforcement partners, will continue to work day and night to stop these large-scale international crime rings in order to protect our neighborhoods and the assets that are central to the everyday lives of people in our community.”

 

The indictment alleges that the Hooligans did their homework before a theft by targeting a specific vehicle days before the actual theft would take place. They obtained the vehicle identification number in advance and then managed to get secret key codes, which allowed them to create a duplicate key for that particular Jeep. Then, during the theft, the Hooligans disabled the alarm system, programmed the duplicate key using a handheld electronic device, and quietly drove away without notice.

 

This was a method so new and technologically advanced it required investigators to exceed the ingenuity of the thieves.

 

In the summer of 2014, San Diego County was hit with a rash of Jeep Wrangler thefts. Almost all the thefts occurred in the middle of the night or early morning, and almost all of the Wranglers were equipped with alarms. Yet no alarms were ever triggered, and there was never any broken glass or other signs of forced entry. Agents from the Regional Auto Theft Task Force, known as RATT, at first were perplexed. But eventually they caught a break.

 

On September 26, 2014, a Jeep owner parked her 2014 Jeep Wrangler Rubicon in the driveway of her home in Rancho Bernardo. She returned to the driveway early the next morning to find the Jeep missing. Fortunately, the Jeep owner had recently installed a surveillance camera on her house, and it happened to be trained on the driveway.

 

The surveillance footage revealed that three men stole her Jeep around 2:30 a.m. by disabling the alarm and then using a key and a handheld electronic device to turn on the engine.

 

Based on the surveillance footage, law enforcement agents sent Chrysler a list of around 20 Jeeps that had recently been stolen in San Diego County and asked whether anyone had requested duplicate keys for the stolen Jeeps.

 

Sure enough, Chrysler responded that a duplicate key had been requested for nearly every one of the 20 stolen Jeeps. Moreover, nearly every one of the keys had apparently been requested through the same dealership in Cabo San Lucas, Mexico. The Jeeps’ owners did not request duplicate keys and were unaware that anyone had.

 

After additional investigation, agents began interrupting Jeep thefts and made several arrests. Through these arrests, agents learned that the Tijuana-based Hooligan Motorcycle gang was behind the operation.

 

Video file

Case Number: 17cr1314

DEFENDANTS AGE CITY *Jimmy Josue Martinez 31 Tijuana, Mexico *Mario Alberto Echeverria-Ibarra 30 Tijuana, Mexico Henry Irenio Pulido 24 Imperial Beach, California Alejandro Guzman 23 Tijuana, Mexico *Narciso Zamora Banuelos 29 Tijuana, Mexico *Adan Esteban Sanchez Aguirre 26 Tijuana, Mexico *Salvador Isay Castillo 21 Tijuana, Mexico Reynaldo Rodriguez 33 San Diego, California *Sebastian Ponce 20 Tijuana, Mexico

*Fugitives

 

Indictment_5_30   Search Warrant_5_30

SUMMARY OF CHARGES

 

Conspiracy to Commit Transportation of Stolen Vehicles in Foreign Commerce, in violation of 18 U.S.C. 371; Maximum Penalty Five years in prison

 

AGENCIES

 

Regional Auto Theft Task Force, which includes the following agencies: U.S. Border Patrol
California Highway Patrol
National Insurance Crime Bureau
California Department of Insurance
California Department of Motor Vehicles
San Diego County District Attorney’s Office
San Diego County Probation Department
San Diego County Sheriff’s Department
Ice Enforcement and Removal Operations and police departments from La Mesa, Chula Vista, National City, Oceanside and San Diego.

 

Federal Bureau of Investigation

 

Agencies assisting with arrests include U.S. Marshals and San Diego Fugitive Task Force

 

 

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

NEWS RELEASE SUMMARY – May 26, 2017

 

SAN DIEGO – A Tucson firm and two executives were arraigned in federal court today on charges related to the illegal trafficking of $17 million worth of sea cucumbers from 2010-2012.

 

Blessings, Inc. of Tucson, its owner David Mayorquin, and Ramon Torres Mayorquin of San Diego were charged in a 26-count indictment with conspiracy, illegal trafficking in wildlife, importation contrary to law, false labeling and criminal forfeiture.

 

According to the indictment, defendant David Mayorquin, on behalf of Blessings, contacted suppliers of sea cucumbers in Mexico and agreed to purchase approximately $13 million worth of sea cucumbers, knowing that it had been illegally harvested, that is, in excess of permit limits, or without a proper license or permit, or out of season.

 

It was a further alleged that defendant Ramon Mayorquin received the shipments of sea cucumbers from the Yucatan to Tijuana, Mexico, and created false invoices to be submitted to U.S. Customs officials, knowing that the sea cucumbers had been illegally harvested, sold and transported, and lacked the proper paperwork required under Mexican law.

 

According to the indictment, the fraudulent sales invoices submitted to U.S. Customs falsely represented defendant Ramon Mayorquin to be the supplier of the sea cucumbers to Blessings, from a non-existent address in Mexico, for a price less than one tenth of the true price paid by Blessings for the sea cucumbers.

 

The indictment states that after the sea cucumbers had been imported into the United States, defendant David Mayorquin sold the sea cucumbers on behalf of Blessings for approximately $17.5 million to customers in China and elsewhere. The indictment alleges that as part of the scheme payments were made to bank accounts held under false names to conceal the illegal sales and hide the proceeds, and payments were also made to Mexican officials to insure that no action was taken against the illegally harvested sea cucumbers. In furtherance of the scheme, it is alleged that in June of 2011, a co-conspirator in Mexico sent an email to defendant David Mayorquin, stating in substance “We want what is owed in freight to be your contribution for the bribe, 32K.”

 

Mexican law requires that the lawful origin of fisheries products be demonstrated by means of an arrival, harvest, production, or collection notice or an import permit. The original sales invoice for fisheries products must bear the number associated with the notice of arrival, harvest, production or collection, as well as a description of the product, and all subsequent invoices must bear the number of the invoice from which it derived, so that all fisheries products sold in Mexico can be traced to their lawful origins.

 

In addition, in Mexico a fisheries waybill is needed for the interstate transportation of fisheries products. It is also violation of Mexican law to harvest, possess, transport, or sell a species out of season, or of less than the minimum established size and weight, or to harvest a species in excess of permit limits or without a proper license or permit. The indictment alleges that the defendants imported sea cucumbers into the United States they knew had been harvested, transported and sold in violation of these Mexican laws.

 

Since the beginning of this investigation, with the increased cooperation with Mexican officials, the importation of sea cucumbers from Mexico to the United States through the ports of entry in San Diego have decreased approximately 93% in the past three years. According to the NOAA Office of Science and Technology, Commercial Fisheries Statistics Division website, total sea cucumber imports from 2013 through 2016 into the San Diego ports of entry have decreased from 1,096,258 kg in 2013 to 70,708 kg in 2016. Total sea cucumber imports to the U.S. from Mexico have decreased from 4 million kg in 2013 to 3 million kg in 2016.

 

“This case demonstrates the coordination between U.S. federal law enforcement agencies in detecting illegal, unreported, and unregulated (IUU) fishing and stopping the trafficking of sea cucumbers into the U.S. from Mexico,” said Assistant Director Will Ellis of NOAA's Office of Law Enforcement. “Sea cucumbers is an important commercial fishery for Mexico and NOAA's Office of Law Enforcement is committed to cooperating with our international partners to safeguard this marine resource.”

 

“The Service's investigation and this subsequent indictment will help stop the illegal harvest and transport of thousands of pounds of sea cucumbers, whose numbers have fallen dramatically over the past few years,” said Ed Grace, Deputy Assistant Director for U.S. Fish and Wildlife Service Office of Law Enforcement. “Sea cucumbers serve an important role in the marine ecosystem, helping recycle nutrients and break down organic matter. Illegal over-harvest threatens more than just the species themselves, impacting delicate coral reefs and local fisheries. Going after criminal poachers and wildlife traffickers like these is not only critical for saving protected species such as sea cucumbers, it also ensures some justice for those impacted by their illegal activities.”

 

“A large overseas demand for sea cucumbers harvested in Mexico has fueled an increase in illicit importation-schemes uncovered at commercial ports of entry on the U.S.-Mexico border, ” said Dave Shaw, special agent in charge for Homeland Security Investigations in San Diego. “This investigation underscores HSI’s commitment to ensuring U.S. trade laws are not exploited by those seeking financial gain.”

 

The defendants were ordered to appear before U.S. District Judge Roger T. Benitez for a hearing on all motions on July 10, 20917, at 2:00 pm.

 

DEFENDANTS Criminal Case No. 17cr1254-BEN

 

Blessings, Inc Incorporated: 2003

Tucson, Arizona

 

David Mayorquin Age: 39

Tucson, Arizona

 

Ramon Torres Mayorquin Age: 75

Chula Vista, California

 

SUMMARY OF CHARGES

 

Count 1

 

Conspiracy, 18 U.S.C. § 371

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

 

Counts 2-8

 

Unlawful Importation of Wildlife, 16 U.S.C. §3372(a)(2)(A) and §3373(d)(1)(A)

Maximum Penalty: 5 years’ prison, $250,000 fine

 

Counts 9-17

 

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

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

 

Counts 18-26

 

False Labeling, 16 U.S.C. §3372(d)(1) and §3373(d)(#)(A)

Maximum Penalty: 5 years’ prison, $250,000 fine

 

AGENCIES

 

National Oceanic and Atmospheric Administration, Office of Law Enforcement

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

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 W. Mark Conover (619) 546- 6763

Michelle L. Wasserman (619) 546-8431

 

NEWS RELEASE SUMMARY –May 26, 2017

 

SAN DIEGO – Henry Bonilla and Richard Navarro were sentenced in federal court today to 15 months and 12 months in prison, respectively, for conspiring to steal over $3 million worth of medical equipment from Camp Pendleton that the military had planned to ship overseas to treat injured Marines.

 

“This isn’t the theft of pencils and pens,” U.S. District Judge Cathy Ann Bencivengo told the defendants during today’s sentencing hearing. “This medical equipment was meant for U.S. Troops. This type of theft is outrageous and puts our troops at risk. I hope this sentence will send a message to people in government in positions of trust.”

 

Bonilla, Navarro and their co-conspirators - many of whom likewise have pleaded guilty - worked as civilian defense contractors in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard Camp Pendleton. 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces throughout the world. By virtue of their employment as contractors, Bonilla and Navarro had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses.

 

According to court records, Bonilla and Navarro and their co-conspirators stole expensive medical equipment from 1st MEDLOG, including anesthesia machines, autoclaves, ventilators, ultrasound machines, defibrillators, and laryngoscopes among other items. Bonilla and Navarro removed the items from Camp Pendleton, with the help of their co-conspirators, and sold the equipment to medical equipment resellers.

 

Acting U.S. Attorney Alana W. Robinson would like to remind the public that these charges were the result of ongoing efforts to root out corruption among our area defense contractors. She encouraged the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil with any information relevant to the ongoing investigation into theft of medical equipment at Camp Pendleton.

 

Judge Bencivengo ordered Bonilla to forfeit two vehicles and $172,850 in ill-gotten gains, and ordered Navarro to forfeit $49,210. Judge Bencivengo also ordered that both Bonilla and Navarro pay restitution of the value of the $3 million worth of equipment stolen from the U.S. Marine Corps.

 

DEFENDANTS Case Number: 16CR2053-CAB

 

Henry Bonilla Age: 29 Pomona, California

 

Richard Navarro Age: 44 Oceanside, California

 

SUMMARY OF CHARGES

 

Count 1: Conspiracy to Engage in Theft of Government Property, Title 18, United States Code, Section 371

Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

 

INVESTIGATING AGENCY

 

Naval Criminal Investigative Service

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

 

NEWS RELEASE SUMMARY – May 18, 2017

 

SAN DIEGO – Abel Jose Perez pleaded guilty in federal court today to theft of public property, admitting that he stole $271,925.60 in Social Security retirement benefits intended for his father, Angel Perez-Barajas, who died in 1997.

 

During a hearing before U.S. Magistrate Judge Andrew G. Schopler, Perez acknowledged that for more than 16 years, he retained exclusive access to and controlled a bank account belonging to his deceased parents, and all funds deposited therein. Perez, who was not an authorized user of the bank account, also never informed either the bank or the Social Security Administration of his father’s death.

 

Perez also admitted that he never requested that the Social Security Administration terminate the monthly direct deposit of his father’s retirement benefits, which continued each month from August 1997 until February 2014. Indeed, Perez admitted that he knew his father’s Social Security retirement benefits should have terminated upon his death, but he nonetheless converted all $271,925.60 to his own use, with no intention of ever returning it to the United States of America.

 

“The only difference between this and armed robbery is the gun,” said Acting U.S. Attorney Alana W. Robinson. “This defendant stole hundreds of thousands of dollars, and the ultimate victims are those who pay into Social Security expecting to receive benefits down the road. We won’t let thieves get away with these crimes, even if they have untraditional methods.”

 

“The Social Security Administration’s Office of the Inspector General is committed to pursuing those who defraud SSA and its benefit programs, which are a lifeline for so many Americans and their families,” said Robb Stickley, the Special Agent in Charge of the San Francisco Field Division, which is responsible for Southern California. “We will continue to assist the U.S. Attorney’s Office in bringing violators to justice."

 

As a part of his plea agreement, Perez agreed to pay full restitution to the Social Security Administration for all of the money he gained by his crime. Perez faces up to 10 years in federal prison and a fine of up to twice his gross gains from this crime at his sentencing on August 7, 2017 before U.S. District Court Judge William Q. Hayes.

 

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, $543,851.20 fine, restitution

 

AGENCY

 

Social Security Administration’s Office of the Inspector General

U.S. Navy Rear Admiral Robert Gilbeau was sentenced today to 18 months in prison for lying to investigators to conceal his illicit 20-year relationship with Leonard Glenn Francis, the owner of Glenn Defense Marine Asia (GDMA), the foreign defense contractor at the center of a major bribery and fraud scandal.

 

Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s (DOD) Defense Criminal Investigative Service (DCIS), Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of Defense Contract Audit Agency (DCAA) made the announcement.

 

On June 9, 2016, Gilbeau, 56, pleaded guilty to one count of making false statements and was sentenced before U.S. District Judge Janis L. Sammartino of the Southern District of California. Gilbeau is the highest-ranking U.S. Navy officer to be sentenced in the investigation so far.

 

In connection with his plea, Gilbeau admitted that he lied when he told agents from DCIS and NCIS that he had never received any gifts from Francis. Gilbeau also admitted that he lied when he told investigators that he “always paid for half of the dinner” when he and Francis met about three times a year. Gilbeau further admitted that when he became aware that Francis and others had been arrested in connection with the fraud and bribery offenses in September 2013, he destroyed documents and deleted computer files. Francis previously pleaded guilty to plying scores of other U.S. Navy officials with gifts such as luxury travel, meals, cash, electronics, parties and prostitutes.

 

By way of background, GDMA provided ship husbanding services such as trash and sewage removal, food, water, security and fuel to U.S. Navy ships. As stated in his plea agreement, in 2003 and 2004, Gilbeau was the supply officer on the USS Nimitz, where he was responsible for procuring all goods and services necessary for operation of the ship. He later served as head of the Tsunami Relief Crisis Action Team in Singapore, heading the Navy’s logistics response to the Southeast Asia tsunami in December 2004, and in June 2005, Gilbeau was assigned to the office of the Chief of Naval Operations as the head of aviation material support, establishing policies and requirements for budgeting and acquisitions for the Navy’s air forces, according to the plea agreement. In August 2010, after he was promoted to admiral, Gilbeau assumed command of the Defense Contract Management Agency International, where he was responsible for the global administration of DOD’s most critical contracts performed outside the United States, according to admissions made in connection with his plea.

 

Twenty current and former Navy officials have been charged so far in the fraud and bribery investigation. Of the 20 Navy officials, 10 have pleaded guilty, and 10 cases are pending. Five GDMA executives and the GDMA corporation have pleaded guilty.

 

The DCIS, NCIS and the DCAA are investigating this case. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California 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.

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

 

NEWS RELEASE SUMMARY – May 17, 2017

 

SAN DIEGO – The first active-duty U.S. Navy Admiral ever convicted of a federal crime was sentenced today to 18 months in prison for lying to investigators to conceal his illicit 20-year relationship with Leonard Glenn Francis, the foreign defense contractor at the center of a colossal bribery and fraud scandal.

 

U.S. Navy Rear Admiral Robert Gilbeau pleaded guilty to one count of making false statements on June 9, 2016, admitting that he lied when he told federal agents that he had never received any gifts from 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, Gilbeau did indeed receive many expensive gifts plus cash from Francis since 1997. The long history between the two men involved many late nights of partying at nightclubs and karaoke bars, fine dining, luxury hotels and prostitutes – all paid for by Francis. For his part, Gilbeau signed off on inflated GDMA invoices which grossly overbilled the Navy.

When the massive corruption and fraud were discovered, Gilbeau repeatedly lied to investigators from Defense Criminal Investigative Service and Naval Criminal Investigative Service about his relationship with Francis. When Gilbeau became aware that Francis and others had been arrested in connection with the fraud and bribery offenses in September 2013, Gilbeau destroyed documents and deleted computer files. And he continued to lie.

 

During the sentencing hearing, U.S. District Judge Janis L. Sammartino noted that Gilbeau’s reaction to the arrests was “a systematic destruction of records.” “You did everything possible to hide and conceal your relationship with Leonard Francis and in the process you tried to thwart the investigation...You violated the law. You dishonored your shipmates, the Navy and the United States of America.”

 

Gilbeau, who is free on bond, was ordered to report to the custody of the Bureau of Prisons on June 23, 2017.

 

“This is the first time our nation will incarcerate a Navy Admiral for a federal crime committed during the course of his official duty, and it is truly a somber day,” said Acting U.S. Attorney Alana W. Robinson. “When tempted by parties and prostitutes, one of our most respected leaders chose karaoke over character, and cover-up over confession, and in doing so he forever tarnished the reputation of a revered institution.”

 

“Today's sentencing of Rear Admiral Robert Gilbeau closes a sad chapter on a naval flag officer's career tarnished by dishonorable behavior such as lying, destroying evidence and concealing the acceptance of gifts and gratuities from a defense contractor," said Dermot F. O'Reilly, Director, Defense Criminal Investigative Service. “As this investigation has shown, no one is above the law, regardless of rank or status, and they will be held accountable just as anyone else who has benefitted from this criminal scheme. The sentencing of Admiral Gilbeau continues the tireless efforts and commitment of DCIS, the Naval Criminal Investigative Service, and the Department of Justice to investigate and prosecute any individual who places at risk the safety and security of our armed forces personnel.”

 

“NCIS, in concert with our partner agencies, remains resolved to follow the evidence wherever it may lead in the ongoing investigation into Glenn Defense Marine Asia and NCIS will seek to hold accountable anyone, regardless of rank, who tries to hamper the investigation by lying or obstructing justice in any manner,” said NCIS Director Andrew Traver.

 

According to the government sentencing memo, Gilbeau first met Francis when Gilbeau served aboard the USS Boxer in 1997. During a multi-day port visit to Bali, Indonesia, Francis plied Gilbeau and another U.S. Navy officer with hotel rooms, dinners and the services of prostitutes.

 

In 2003, when the pair became reacquainted, Gilbeau was serving on the USS Nimitz. He again accepted hotel rooms, lavish dinners and prostitutes from Francis on several occasions.

 

After several of these escapades, Gilbeau personally approved GDMA invoices which inflated the charges to the U.S. Navy. In one instance, Gilbeau signed an invoice for the removal of wastewater from the ship during the port visit to Singapore in October 2003. Based on Gilbeau’s signature, the Navy paid for the highest per-day volumes of wastewater removal in the history of the USS Nimitz. In return, evidence in the investigation suggests GDMA kicked back $40,000 cash to Gilbeau. Gilbeau denies this allegation.

 

Francis also had contact with Gilbeau in 2005, when Gilbeau returned to Singapore to coordinate the U.S. Navy’s tsunami relief efforts. Gilbeau, who called himself “Tsunami Bob,” partied with Francis on three or four occasions, typically with an expensive dinner, followed by Brix Nightclub and Tiananmen Karaoke Bar.

 

According to other information received and reviewed as part of the investigation, on several occasions, Francis paid for hotel rooms and provided Gilbeau other things of value, during his stint in Singapore in 2005. According to interview statements and corroborating documents, Francis and Gilbeau again dined and caroused together in December 2010. On this occasion, Francis, Gilbeau - who had been promoted in the interim to Rear Admiral - and Gilbeau’s flag aide, dined at the Mezza9 Restaurant in the Hyatt Hotel in Singapore. After returning his flag aide to her hotel after dinner, Gilbeau rejoined Francis to continue the party at Brix Nightclub and the after party at Tiananmen Karaoke Bar.

 

To cap the evening, Francis drove Gilbeau and two prostitutes from Vietnam back to Gilbeau’s hotel. The next day, Francis emailed Gilbeau inquiring of the evening’s conclusion. Francis wrote: “How was the after action from the 1st night? Require AAR (After Action Report) Sir.” Gilbeau replied, “Very nice…. BZ.” “BZ” is a Navy term meaning “Bravo Zulu,” which means “well done.”

 

According to the sentencing memo, things started to unravel for Gilbeau in September 2012, when he became aware that Francis and GDMA were under investigation by NCIS for various fraud and public corruption offenses.

 

On November 27, 2012, Gilbeau submitted to his command a Foreign Contact Questionnaire, wherein he disclosed a September 26, 2012 contact with Francis, and in which he willfully, falsely stated “No” in answer to the question: “Have you ever received any gifts from [Leonard G. Francis]?”

 

In a subsequent voluntary interview by NCIS agents on February 20, 2013, Gilbeau stated that he and Francis met about three times a year but that defendant “always pa[id] for his half of the dinner.” That statement, too, was false: Francis paid for dinners, hotel rooms, and prostitutes for Gilbeau on many occasions.

 

According to the sentencing memo, after the arrests of Francis and others in 2013, Gilbeau, while serving in Afghanistan, became paranoid and erratic. He asked for direction on how to wipe clean his electronic devices; he refused to meet with others unless they removed the batteries from their cell phones; he removed his aides’ access to his U.S. Navy email accounts; and he destroyed and/or deleted certain paper records and computer files. Gilbeau was charged in June of 2016.

 

Twenty current and former Navy officials have been charged so far in the fraud and bribery investigation; 10 have pleaded guilty and 10 cases are pending. In addition, five GDMA executives and GDMA the corporation have pleaded guilty.

 

In his remarks at today’s hearing, Assistant U.S. Attorney Mark Pletcher told the court:

 

“Today, Your Honor, is a solemn and tragic day, for Bob Gilbeau, his family and friends, but also for the United States Navy, and our nation…Beyond the tragedy, today is also a day of great importance, as one of finality for Mr. Gilbeau; one of healing for the U.S. Navy; and more broadly, it is one of great importance for our constitutional democracy. We the People consent to be governed. We live by the Rule of Law, applicable to all regardless of rank, stature or privilege. In our Country, no one is above the law.”

 

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 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: 16CR1313-JLS

U.S. Navy Rear Admiral Robert Gilbeau Age 56 San Diego, CA

 

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

 

 

 

 

 

 

 

 

Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768 and Carlos Arguello (619) 546-6684

 

NEWS RELEASE SUMMARY – May 12, 2017

 

SAN DIEGO – Martel Valencia-Cortez, a Mexican national and prolific alien smuggler, was convicted by a federal jury today of assaulting a federal officer by hurling a softball-sized rock at a U.S. Border Patrol agent’s face.

 

The jury deliberated for about eight hours following a four-day trial that included testimony from the agent and some of the immigrants who were smuggled by the defendant. Valencia was convicted of all counts, including one count of assault on a federal officer with a deadly weapon and three counts of bringing in an alien for financial gain. Sentencing is set for August 28, 2017 at 9 a.m. before U.S. District Judge Marilyn Huff.

 

On November 15, 2015, less than two months after his deportation to Mexico following the completion of a 33-month sentence for a prior alien smuggling conviction, Valencia re-entered the United States guiding a group of 15 undocumented immigrants. When the trip through the mountains in rough terrain and inclement weather was interrupted by agents, Valencia threw a softball-sized rock from a distance of approximately 30 feet that hit an agent on the side of the face. Valencia evaded apprehension when he ran back into Mexico afterwards. Agents arrested Valencia when Mexican authorities escorted him to the San Ysidro Port of Entry on Friday, March 11, 2016.

 

According to court records and testimony at trial, the agent who was assaulted said he had never been hit that hard in his life, and he felt an overwhelming pain that caused him to feel dazed and disoriented, as if he was going to pass out. The rock hit the agent so hard that he thought his teeth were knocked-out or his jaw was broken.

 

“The conditions are treacherous in some sections of the border, and our courageous agents put their lives on the line every day to protect our country,” said Acting U.S. Attorney Alana W. Robinson. “This verdict tells us that the safety of our agents is of paramount importance and attacks on our agents will come at a high price.”

 

“We are grateful for the resolve and collaboration that our law enforcement partners have demonstrated over the past several months, resulting in Valencia’s arrest, his prosecution and conviction. We look forward to a just sentencing that will keep him off our streets for a significant period of time, and will keep our communities safe from this violent criminal,” said San Diego Sector Chief Patrol Agent Richard A. Barlow.

 

DEFENDANTS                                    Case Number 16-CR-0730

Martel Valencia-Cortez                         Age: 39           Colima, Mexico

 

SUMMARY OF CHARGES

 

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

Maximum Penalty 20 years in prison

 

Count 2-4: Bringing in Aliens for Financial Gain, in violation of 8 U.S.C. 1324 (a)(2)(b)(ii)

Mandatory Minimum of 5 years in prison, maximum 15 years

 

AGENCY

 

U.S. Customs and Border Protection

U.S. Border Patrol

 

 

 

Assistant U. S. Attorney Colin McDonald (619) 546-9144

SAN DIEGO – Jorge Garcia-Osornio was sentenced in federal court today to 30 months in prison for blasting through a Border Patrol checkpoint in Pine Valley, severely injuring a checkpoint inspection agent, and taking Border Patrol on a high-speed chase reaching speeds of at least 100 miles per hour.

Garcia, who was illegally present in the U.S. and had two illegal immigrants hiding on the floor of his vehicle, approached the checkpoint – about 45 miles east of downtown San Diego - at approximately 10:26 a.m. on November 14, 2017. As he neared the line of cars waiting for inspection, he made an illegal U-turn and started driving the wrong way on the freeway.

https://youtu.be/bGiBdp3ieV4

https://youtu.be/KsR_R44bpsQ

A Border Patrol agent yelled, “Turn around! Turn around!” Another agent activated his emergency lights and siren and began following the defendant. Garcia then made another U-turn on the freeway and headed back toward the checkpoint. The agent tried to stop Garcia’s vehicle by positioning the agency vehicle in the center of both freeway lanes, but Garcia squeezed past by driving onto the shoulder of the freeway.

He then sped toward the checkpoint. A number of cars were in the checkpoint queue. Garcia evaded them by driving into a coned-off freeway lane. He then accelerated to – and through – the checkpoint. In the process, he barely missed crashing into a parked agency car; barely missed crashing into a parked civilian car; and barely missed running over Border Patrol Agent M. Medina, the primary inspection agent.

But Garcia did not miss a steel-framed stop sign sitting in the middle of the freeway lanes; he barreled through it, causing a collision best described as an “explosion.” Debris from the collision struck Agent Medina, who likened the blow to being “hit with a baseball bat.” His injuries were similarly severe: Vomiting, throbbing headache, blurry vision, a gash on his face, shaking uncontrollably, and loud ringing in his ears, among other things. Agent Medina was taken to the hospital in an ambulance and has not returned to work since.

After crashing through the checkpoint, Garcia led Border Patrol on a high-speed chase, reaching speeds of at least 100 mph. After about 3.5 miles, Garcia exited the freeway, ran a stop sign and crashed into a hillside. One of the illegal immigrants on the floor of Garcia’s car said he “feared for his life.”

   

Garcia then ran away and agents found him hiding in a nearby carport with the crashed car’s key fob in his pocket.

As part of his plea, Garcia admitted driving the wrong way on the freeway, reaching at least 100 mph when fleeing from the checkpoint, using a dangerous weapon in the commission of the offense, and seriously injuring Agent Medina, among other things.

Garcia expected to earn between $1,400 and $2,000 for transporting the two illegal immigrants.

“This defendant had no regard for the safety of his passengers, other drivers on the freeway or agents at the checkpoint,” said U.S. Attorney Adam Braverman. “It’s a miracle no one died in this incident. Smugglers operate in a world where immigrants are just dollar signs, not people.”

“In committing his criminal act, Garcia not only placed the lives of those he smuggled in grave danger, but seriously injured a Border Patrol agent in the process,” Chief Patrol Agent Rodney S. Scott. “I would like to express my sincere appreciation to the United States Attorney’s office for their efforts in prosecuting this case.  Let this sentencing serve as a reminder that there will be severe consequences for those that wish to do our country harm.”

DEFENDANT                                               Case Number 17cr4272-JM                                    

Jorge Garcia-Osornio                                      Age: 28           Michoacán, Mexico

 

SUMMARY OF CHARGES

Transporting Certain Aliens and Aiding and Abetting – Title 18, U.S.C., Sections 1324(a)(1)(A)(ii), (v)(II), and (a)(1)(B)(i)

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

 

AGENCY

U.S. Border Patrol