FEDERAL DISTRICT ARCHIVE
Southern District of California
Press releases recorded for this federal judicial district.
U.S. Navy Admiral Pleads Guilty to Lying to Federal Investigators about His Relationship with Foreign Defense Contractor in Massive Navy Bribery and Fraud InvestigationRead the Press Release
U.S. Navy Rear Admiral Robert Gilbeau pleaded guilty today in federal court to charges that he lied to federal investigators to conceal his illicit years-long relationship with Leonard Glenn Francis, owner of Glenn Defense Marine Asia (GDMA), the foreign defense contractor at the center of a massive bribery and fraud scandal.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy 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.
Gilbeau, 55, of Burke, Virginia, pleaded guilty to one count of making a false statement. He was charged by information today and is the highest-ranking U.S. Navy officer to be charged in the investigation so far. Gilbeau is scheduled to be sentenced on Aug. 26, 2016, before U.S. District Judge Janis L. Sammartino of the Southern District of California.
In his plea agreement, Gilbeau admitted that he lied when he told agents from DCIS and NCIS that he had never received any gifts from Francis, the owner of Singapore-based GDMA. 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.
According to his plea, 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.
“As a flag level officer in the U.S. Navy, Admiral Gilbeau understood his duty to be honest with the federal agents investigating this sprawling bribery scheme,” said Assistant Attorney General Caldwell. “By destroying documents and lying about the gifts that he received, Admiral Gilbeau broke the law and dishonored his uniform.”
“Of those who wear our nation’s uniform in the service of our country, only a select few have been honored to hold the rank of Admiral – and not a single one is above the law,” said U.S. Attorney Laura Duffy. “Admiral Gilbeau lied to federal agents investigating corruption and fraud, and then tried to cover up his deception by destroying documents and files. Whether the evidence leads us to a civilian, to an enlisted service member or to an admiral, as this investigation expands we will continue to hold responsible all those who lied or who corruptly betrayed their public duties for personal gain.”
“The guilty plea of Rear Admiral Robert Gilbeau is an unfortunate example of a dishonorable naval flag officer who has betrayed his shipmates, the U.S. Navy and his country,” said Acting Director O’Reilly. “Admiral Gilbeau's guilty plea should be a resounding message that DCIS, Naval Criminal Investigative Service and the Department of Justice will continue to investigate and seek to prosecute any individual, regardless of position or rank, who would put our mission of ‘Protecting America’s Warfighters’ at risk.”
“This investigation demonstrates that corruption, conspiracy and the release of sensitive information puts Department of the Navy personnel and resources at risk,” said Director Traver. “And in concert with our partner agencies, NCIS remains resolved to follow the evidence, to help hold accountable those who make personal reward a higher priority than professional responsibility.”
“DCAA is proud to stand in partnership with our law enforcement allies and make a meaningful contribution to the outcome in this egregious case,” said Director Bales. “It is very disappointing that this high-ranking individual lost sight of his responsibility as a government official. We look forward to continuing our support of this significant investigation.”
Including Gilbeau, 14 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Captain (Select) Michael Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense Senior Executive Paul Simpkins awaits trial. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and to pay $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme. Retired Navy Captain Michael Brooks, Commander Bobby Pitts and Lieutenant Commander Gentry Debord were charged by a federal grand jury on May 25, 2016, and their cases remain pending. GDMA, the corporate entity, was also charged and has pleaded guilty. Francis and Ed Aruffo, a former GDMA employee, have both pleaded guilty and await sentencing.
NCIS, DCIS and DCAA are conducting the investigation. 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 are prosecuting the case.
Those 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.
San Diego’s Harper Construction Pays $5.4 Million to Resolve Allegations of Defrauding the United StatesRead the Press Release
Assistant U.S. Attorney Dylan M. Aste (619) 546-7621
NEWS RELEASE SUMMARY – June 1, 2016
SAN DIEGO – Harper Construction Company, Inc. has paid $5.4 million to the United States to resolve allegations that it fraudulently billed the government for work on multiple projects on military bases. It was alleged that Harper knowingly used sham small disadvantaged businesses and then falsely certified to the government that it used legitimate small disadvantaged businesses.
Harper is a large, privately-held general contractor headquartered in San Diego. Harper earns a substantial portion of its revenue through government contracting on construction projects across the country.
The settlement involves four government contracts to construct facilities at Camp Pendleton and Camp Lejeune. The contracts required Harper to subcontract a certain percentage of work to small disadvantaged businesses. Such requirements arise from measures intended to ensure that a fair proportion of federal contract and subcontract dollars are awarded to small businesses. It was alleged that Harper claimed it met this requirement when, in fact, it subcontracted with sham small disadvantaged businesses. Also, Harper allegedly required the sham small businesses to pass through all of their work to an affiliated large business, Frazier Masonry Corporation.
This settlement resolves a False Claims Act lawsuit filed by Rickey Howard, a former employee of Harper subcontractor Frazier Masonry Corporation. The whistleblower, or qui tam, provisions of the False Claims Act permit the whistleblower (or relator) to recover a portion of the proceeds obtained by the government. As part of today’s resolution, Mr. Howard will receive $1,485,000.
“This type of fraud siphons taxpayer dollars and takes away opportunities for legitimate small businesses for which this money was set aside,” said U.S. Attorney Duffy. “Whistleblowers are essential in our efforts to recover taxpayer dollars and combat fraud. We commend the whistleblower for coming forward and making the United States aware of this alleged fraud, and we welcome others who are aware of fraudulent conduct to also blow the whistle on fraudsters.”
“DCIS and its investigative partners work diligently to expose corrupt contractors that manipulate or circumvent Federal contracting requirements,” stated Special Agent in Charge John F. Khin, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS’ earlier investigation of the subcontractors involved in this matter resulted in both criminal and civil actions. We applaud efforts by concerned citizens and relators to assist our investigative efforts, and help the Government hold companies accountable for undermining the integrity of our contracting system.”
This case is captioned United States ex rel. Howard v. Harper Constr. Co. Inc., et al., Case No. 3:15-CV-02910-H (KSC) (S.D. Cal.). In conjunction with an earlier settlement with co-defendants FMC; F-Y, Inc.; CTI Concrete & Masonry, Inc.; Masonry Technology, Inc.; Masonry Works, Inc.; Russell Frazier; and Robert Yowell (United States ex rel. Howard v. Harper Constr. Co. Inc., et al., Case No. 7:12-CV-215-D (E.D.N.C.)), the United States has recovered over $7,000,000 in this matter.
This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office for the Southern District of California, along with the Commercial Litigation Branch, Fraud Section, Department of Justice and the Defense Criminal Investigative Service.
Former LAPD Officer Pleads Guilty, Admits Trying to Smuggle Mexican Citizen in Spare Tire Well of his CarRead the Press Release
Assistant U.S. Attorney Michael Lasater (619) 546-7462 or Benjamin Katz (619) 546-9604
NEWS RELEASE SUMMARY – June 1, 2016
SAN DIEGO – Former Los Angeles police Officer Carlos Curiel Quezada, Jr., pleaded guilty in federal court today on charges that he attempted to smuggle a Mexican citizen into the United States in the spare tire well of his car at the Otay Mesa border crossing in March of 2015.
His girlfriend, Angelica Godinez, pleaded guilty to lying on an application for court appointed counsel. Both are scheduled to be sentenced on August 26, 2016, at 8:30 a.m. before U.S. District Judge Gonzalo Curiel.
According to court documents, Quezada drove his 2014 Nissan Juke, with Godinez as the front seat passenger, into the United States through the Otay Mesa Port of Entry on March 14, 2015, at about 6:30 p.m. They presented their U.S. passports and told a Customs and Border Protection Officer they had nothing to declare. The officer decided to refer them aside for a more intensive inspection.
During the inspection, officers examined the car with the Z-Portal, a non-intrusive imaging device similar to an X-ray, and detected something unusual in the rear cargo area of the vehicle. Antanasio Perez Avalos, a 26-year-old Mexican national, was found in a compartment in the spare-tire area.
DEFENDANTS Criminal Case Number 15cr1205GPC
Carlos Curiel Quezada Jr. Age: 34 Los Angeles, CA
Angelica Godinez Age: 31 Los Angeles, CA
SUMMARY OF CHARGES
Bringing in Illegal Aliens without Presentation – Title 8 United States Code Sec. 1324(a)(2)(B)(iii)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCY
U.S. Customs and Border Protection
Three Navy Officers Charged in Expanding Bribery and Fraud SchemeRead the Press Release
Three current and former Navy officers were charged in documents unsealed today for their roles in a massive bribery and fraud scheme involving a Navy contractor.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s 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.
Retired Navy Captain Michael Brooks, 57, of Fairfax Station, Virginia; Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore, were charged on May 25, 2016, in the Southern District of California. Brooks and Debord were each charged with one count of conspiracy to commit bribery and Pitts was charged with one count of conspiracy to defraud the United States and two counts of obstruction of justice. All of the charges relate to the defendants’ interactions with Leonard Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore. Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia; Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond; Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10; and Debord was granted a $40,000 bond secured by real property. Debord is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick of the Southern District of California on June 9, 2016.
According to the indictment, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines. The indictment alleges that in exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes, Brooks used his office to benefit GDMA and Francis, including securinge the quarterly diplomatic clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic clearance of the U.S. Embassy; limited the amount of custom fees and taxes that GDMA was required to pay in the Philippines; and enabled GDMA to avoid inspection of any quantity or type of cargo that it transported. The indictment also alleges that Brooks provided Francis with sensitive Navy information, including billing information belonging to a GDMA competitor and Navy ship schedules.
According to the indictment, from August 2009 to May 2011, Pitts was the Officer in Charge of the Navy’s Fleet Industrial Supply Command (FISC), which was charged with meeting the logistical needs of the U.S. Navy’s Seventh Fleet. The indictment alleges that in exchange for entertainment, meals and the services of a prostitute, Pitts used his position with FISC to interfere with NCIS investigations into GDMA. Pitts allegedly provided Francis with a hard copy of an NCIS report detailing an investigation into GDMA for contract fraud marked “for official use only.” According to the indictment, the report detailed NCIS’ investigative steps and witnesses that NCIS had interviewed. The indictment further alleges that in November 2010, Pitts forwarded to a GDMA employee an internal Navy email discussing details of FISC’s efforts to oversee GDMA’s contracts with the U.S. Navy.
According to the criminal complaint, from November 2007 to August 2013, Debord served in several logistical and supply positions in the Western Pacific. In exchange for cash, hotel stays and the services of prostitutes, Debord allegedly provided Francis with inside Navy information and documents, including information about competitors’ bids and information about an investigation into GDMA billing practices. In an attempt to conceal the true nature of his relationship with Francis, Debord allegedly referred to prostitutes as “cheesecake” or “bodyguards.” The complaint also alleges that Debord schemed with Francis to defraud the Navy through the submission and approval of inflated invoices.
Including those charged yesterday, 13 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Captain (Select) Michael Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense Senior Executive Paul Simpkins awaits trial. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and to pay $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme.
The NCIS, DCIS and DCAA are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Those 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.
Three Current and Former Navy Officers Charged in Expanding Bribery and Fraud ProbeRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – May 27, 2016
SAN DIEGO, CA – Three current and former U.S. Navy officers appeared in federal court today to face charges that they secretly worked on behalf of foreign defense contractor Leonard Glenn Francis to advance the interests of his company, including instances in which a highly influential captain allowed Francis to ghostwrite official Navy documents and correspondence and submit them as his own.
In exchange, Francis plied the now-retired Captain Michael Brooks, 57, of Fairfax Station, Virginia, with prostitutes, luxury travel, a days-long party in a presidential suite and other gifts. Also charged this week in the massive bribery and fraud scheme were Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore.
The charging documents allege that in return for lavish entertainment and travel expenses, the services of prostitutes and other illicit gifts, the defendants brazenly used their public offices to foist benefit after benefit upon Francis and GDMA, including passing on sensitive, internal U.S. Navy information to advance GDMA’s business interests and advocating for GDMA at every turn.
Brooks and Debord were each charged with one count of conspiracy to commit bribery; Pitts was charged with one count of conspiracy to defraud the United States and two counts of obstruction of official proceedings. All of the charges relate to the defendants’ interactions with Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore with a decades-long relationship with the U.S. Navy.
Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia. Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia; Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond; Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10; Debord was granted a $40,000 bond secured by real property. He is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick on June 9, 2016.
According to the indictment, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines. In this position, Brooks served as the representative of the Secretary of Defense, the Chairman of the Joint Chiefs of Staff and the United Forces of the United States in Manila and also as the military advisor to the United States Ambassador.
The indictment alleges that in exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes – which Brooks and Francis referred to in code as “chocolate” or “mocha shakes” or “high tea” -- Brooks used his office to benefit GDMA and Francis. In one instance on May 25, 2008, Brooks attended a days-long party Francis hosted for U.S. Navy officials during a port visit to Manila by the USS Blue Ridge with alcohol, prostitutes and lavish hotel accommodations in the presidential suite of the Makati Shangri-La, among other luxuries.
According to the indictment, Brooks secured quarterly diplomatic 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; he limited the amount of custom fees and taxes that GDMA was required to pay in the Philippines; and enabled GDMA to avoid inspection of any quantity or type of cargo that it transported.
The indictment also alleges that Brooks used his position and influence to advocate for and advance GDMA’s interest and that Brooks allowed Francis and others inside GDMA to ghostwrite U.S. Navy documents and correspondence, which Brooks then submitted as his own, objective work product.
According to the indictment, from August 2009 to May 2011, Pitts was the Officer in Charge of the Navy’s Fleet Industrial Supply Command (FISC), which was charged with meeting the logistical needs of the U.S. Navy’s Seventh Fleet. The indictment alleges Pitts conspired with Francis and others to deprive the Department of the Navy with its right to have its affairs conducted free from corruption, fraud, and obstruction.
In particular, in an effort to obstruct and impede the Department of the Navy’s ability to properly oversee and administer its ship husbanding contracts with GDMA, Pitts allegedly provided Francis with a hard copy of an NCIS report marked “for official use only,” which detailed an investigation by NCIS into GDMA for contract fraud and other improprieties. According to the indictment, the report detailed NCIS’s investigative actions and the witnesses that NCIS had interviewed. The indictment further alleged that in November 2010, Pitts forwarded to a GDMA employee an internal Navy email discussing details of FISC’s efforts to investigate whether GDMA was improperly charging the U.S. Navy for force protection services.
On November 23, 2010, Pitts gave GDMA an internal U.S. Navy email discussing FISC’s intention to contact Thai officials to determine whether GDMA had billed the U.S. Navy for force protection services – such as guards to protect U.S. ships while in port - that the Royal Thai Navy had provided free of charge.
According to a criminal complaint, from November 2007 to August 2013, Debord served in several logistical and supply positions in the Western Pacific. In exchange for cash, hotel stays and the services of prostitutes, Debord allegedly provided Francis with inside Navy information and documents, including information on an investigation into GDMA billing practices.
Debord further instructed GDMA to fraudulently increase its invoices to the U.S. Navy in order to cover the value of cash, hotel rooms, and other things of value provided to Debord. To conceal the true nature of his relationship with Francis, Debord referred to prostitutes as “cheesecake” or “bodyguards.” For example, on October 13, 2008, Debord emailed a GDMA executive with pictures of a woman, commenting: “This is the cheesecake I want…” In November 2008, Debord wrote to a GDMA employee demanding a three-bedroom furnished apartment in Hong Kong: “I need a 3BDR one if you can. Away from sailors but near bars/clubs/cheesecakes.”
“We continue to uncover far-reaching, troubling levels of corruption as this investigation expands,” said U.S. Attorney Laura Duffy. “We will keep going until we are sure we have held accountable every person who traded integrity and honor for parties and prostitutes.”
“Today's charges and arrests are yet another example of the continued dedication by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, and the Department of Justice to identify and
prosecute those individuals who would abuse their positions of trust within the Department of Defense,” said James B. Burch, Director, Defense Criminal Investigative Service. “The conduct alleged in this investigation is deeply troubling. Defense Criminal Investigative Service and our law enforcement partners will
continue to investigate and seek to prosecute any individual, regardless of position, who would put our mission of 'Protecting America's Warfighters' at risk.”
“The GDMA investigation is moving forward with these arrests but much work remains to be done,” said Andrew Traver, Director of the Naval Criminal Investigative Service. “As we've stressed from the outset of this investigation, NCIS is committed to following the evidence wherever it leads and regardless of who is found to have violated the trust placed in them.”
Including those charged yesterday, 13 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Capt. Daniel Dusek, U.S. Navy Captain (Select) Michael Misiewicz, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial.
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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme.
NCIS, DCIS and DCAA are conducting the 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.
Those 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.
DEFENDANT Case Number: 16-CR-1206
U.S. Navy Captain Michael Brooks, retired Age 57 Fairfax Station, Virginia
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,
DEFENDANT Case Number: 16-CR-1207
Commander Bobby Pitts Age 47 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,
Obstruction of Proceedings, in violation of 18 U.S.C. § 1505
Maximum Penalty: 5 years in prison, a $250,000 fine,
DEFENDANT Case Number: 161510
Lieutenant Commander Gentry Debord Age 47 Singapore
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
Retired Marine Sentenced to 26 Years in Prison for Fatally Stabbing his Girlfriend, Dismembering her Body with a Machete and Dumping her Remains in the Panamanian JungleRead the Press Release
Assistant U.S. Attorneys W. Mark Conover (619) 546-6763 or Shane P. Harrigan (619) 546-6981
NEWS RELEASE SUMMARY – May 25, 2016
SAN DIEGO – Just a few hours after murdering his girlfriend in Panama and chopping up her body with a machete, retired Marine Brian Karl Brimager sent an email to a friend: “Hey bro, whatcha up to? I got stories for days. I’m living on an island off the coast of panama loving life and living semper free!!!!!!”
A few days later, after he’d disposed of Yvonne Baldelli’s body in the Panamanian jungle, Brimager accessed her bank account and used the money to buy rounds of drinks for female friends at a bar. “Thanks Vonnie,” he announced, as he raised his glass in a toast.
After returning to the United States, Brimager received an email from another friend who told him to say hello to Baldelli. In his reply, Brimager wrote that he’d “ditched the bitch.” In a social media post about the sale of the machete he used to sever Baldelli’s limbs, Brimager joked: “I only dismembered one stripper with it – it’s hardly used.”
Because of the heinous nature of the crime and his actions afterward – particularly the way he celebrated her death and tormented Baldelli’s family with his elaborate cover up - Brimager was sentenced in federal court by U.S. District Judge Jeffrey T. Miller today to 26 years in prison, ending a long and legally challenging FBI-led investigation and prosecution spanning thousands of miles, multiple countries and more than four years.
“The day of reckoning has come for Brian Brimager,” said U.S. Attorney Laura Duffy. “Not only did he show a callous disregard for Yvonne Baldelli’s life by viciously beating, stabbing, dismembering and dumping her in the jungle, but his words and actions in the hours, days and months following his horrendous crime exhibited an extreme lack of remorse. He stole a precious daughter, sister, aunt and friend, and now he is paying the price.”
“I hope today’s sentencing brings some closure to Ms. Baldelli’s family, knowing that her murderer will serve a very long prison sentence for her cruel and vicious murder,” said FBI Special Agent in Charge Eric S. Birnbaum. “I commend the professionalism and dedication of our international law enforcement partners, the prosecutors and the FBI agents here in San Diego and Panama who worked tirelessly to obtain justice for Yvonne Baldelli.”
Judge Miller also ordered Brimager to pay $11,132 in restitution to Baldelli’s father and a $10,000 fine.
At the sentencing hearing, prosecutors argued that the circumstances of the crime – including mutilation of the body and Brimager’s multiple attempts to convince Baldelli’s family that she was still alive - amounted to “extreme conduct,” a legal term of art that merits an enhanced sentence.
Prosecutors told the court at today’s hearing that eight witnesses in Panama related separate incidents to the FBI in which they saw Brimager beating, punching, choking and threatening to kill Baldelli. When the 220-pound ex-Marine killed the 110-pound Baldelli on November 27, 2011, the evidence showed that he broke her teeth and nose and stabbed her multiple times before dragging her lifeless body to the shower, where he mutilated her.
Judge Miller agreed that these actions amounted to extreme conduct and handed down a sentence that is stronger than a typical second-degree murder term. “This murder was particularly cruel and depraved,” the judge said. “The lengths Mr. Brimager went to to avoid detection were particularly brazen and ultimately shattering to the Bardelli family. I dare say they will never recover. A day may never go by without them thinking of Ms. Baldelli’s murder and the images seared in to their psyches.”
During the hearing, nine members of Baldelli’s family, including her parents, sister, nieces and closest friends, told the court how they have suffered emotionally and physically because of the loss, the way in which she was killed, and the torture of not knowing her whereabouts. Some described in wrenching detail their search for her body in the muddy spider-infested swamps of the Panamanian jungle – too afraid to find her, too afraid not to.
During the court hearing, Brimager faced family members seated in the gallery and said he was sorry. But the family wasn’t receptive. “Don’t look at us!” someone fired back. “Sure,” scoffed another.
During her victim impact statement before the court, Michelle Faust, Baldelli’s sister, said: “Today we got an apology – a hollow last-minute attempt to save himself. Last night we talked about forgiveness. But forgiveness is for those who repent, not for those who cover their crimes, not for those who confess only when their back’s against the wall.”
According to sentencing documents, after dismembering her body, Brimager stuffed her torso into a military duffle bag and shoved her lower limbs into garbage bags. He then hiked approximately 1.5 miles to the other side of the island where he threw the duffle bag and garbage bags down an embankment into the remote Panamanian jungle -- where they remained for 21 months until a local Panamanian stumbled onto the duffle bag containing her skeletonized remains.
Brimager pleaded guilty on February 24, 2016 before U.S. District Judge Jeffrey T. Miller to Foreign Murder of a United States National. In his guilty plea, Brimager also admitted that he obstructed the investigation into her murder by destroying, concealing and disposing of evidence, including a blood-stained mattress, clothes and jewelry; killed Baldelli’s two dogs; accessed Baldelli’s email account after her murder and impersonated Baldelli in emails sent from her account to friends and family; withdrew money from Baldelli’s bank account in Costa Rica after her death; and provided false statements to an FBI agent – all in an attempt to make it seem as though Baldelli were alive and well and traveling with another man in Costa Rica.
Brimager has been in custody since June 2013.
Assistant U.S. Attorney Mark Conover told the court that Brimager killed Baldelli in order to silence her. She’d discovered that Brimager had a girlfriend and daughter in San Diego. Baldelli could’ve ruined it for Brimager by revealing their relationship to the girlfriend. Within two weeks of returning to San Diego after Baldelli’s murder, Brimager married the girlfriend.
DEFENDANT Case Number: 13CR2381-JM
Brian Karl Brimager Age: 40
SUMMARY OF CHARGE
Foreign Murder of a United States National – Second Degree, Title 18, United States Code, Sections 1119 and 1111; Maximum Penalties: Life imprisonment, $250,000 fine, restitution
AGENCIES
Federal Bureau of Investigation, San Diego Division and Panama City Legal Attaché Office
U.S. Embassy, Panama City
Office of International Affairs, U.S. Department of Justice
Human Rights and Special Prosecution Section, U.S. Department of Justice
Former USD Basketball Star Sentenced for Camp Pendleton TheftsRead the Press Release
Special Assistant U.S. Attorney Kathleen J. O’Hara (619) 546-7945
NEWS RELEASE SUMMARY – May 23, 2016
SAN DIEGO – Former University of San Diego women’s basketball star Dominique Conners, 26, was sentenced today by U.S. District Judge Michael M. Anello to 90 days house arrest and three years’ probation for thefts she committed at Camp Pendleton in order to fund her gambling addiction. Judge Anello also ordered Conners to pay $11,779 in restitution after she stole the wedding gifts of a newly married couple who were staying at a beach cottage at the Del Mar Beach Resort on Camp Pendleton.
Ms. Conners, a graduate of La Jolla Country Day School, went on to star for the University of San Diego Torreos. Conners, a WNBA draft prospect, also played professional basketball in the Czech Republic. According to court documents and other admissions, her thefts at Camp Pendleton began shortly after she returned to the United States from Europe. Records showed that Ms. Conners was gambling several thousand dollars a week and had access to Camp Pendleton because her father is a retired Marine. Ms. Conners had been ordered to attend counseling for gambling addiction after her arraignment in November 2015.
The victims in this case had just been married and had over $11,000 in cash gifts in their beach cottage. Shoe prints were found on the window sill and a forensic analysis of Ms. Conners’s shoes matched her to the crime scene. One victim stated, “I felt violated and the false sense of security (on a military installation) was overwhelming.” Another victim said, “She stole a large sum of money from us. Money that was to help start our new life together after we got married.”
The Marine Corps Criminal Investigations Division (CID) conducted the investigation. The victims were able to recover their lost property.
CID also linked Ms. Conners to several other vehicle thefts. In those cases, Ms. Conners stole cash and gift cards from unlocked vehicles at the beach, but left the wallets and other personal items behind. Ms. Conners was ordered to pay restitution for those thefts as well.
DEFENDANTS
Dominique Conners Age: 26 Oceanside, CA
SUMMARY OF CHARGES
18 U.S.C. § 661 – Theft within the Special Maritime or Territorial Jurisdiction
AGENCY
Criminal Investigative Division, United States Marine Corps
Coronado Businessman and Arizona Lawyer Steal More Than $30 MillionRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – May 19, 2016
SAN DIEGO – San Diego businessman Courtland Gettel and Arizona attorney Jeffrey Greenberg pleaded guilty this week to participating in a massive scheme in which they obtained tens of millions of dollars in fraudulently-obtained loan proceeds.
The conspirators generated the money by taking out huge loans against multi-million dollar homes in La Jolla and Del Mar, then pretending those loans had been paid off in order to secure more loans from new lenders -- who were led to believe by forged documentation that the homes were debt-free.
To pull of the scam, Gettel, Greenberg, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, wreaking havoc on the chain of title for these homes. They then defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their secured interests, and causing millions of dollars in losses from unpaid loans.
Gettel ran a real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects. As part of his plea, Gettel admitted that he and his informal business partner acquired high-end homes in La Jolla and Del Mar by pretending to real estate lenders that they intended to use the homes as luxury rental properties—although in fact, they lived in the properties along with their families. When they needed money to fund other business deals, Gettel and his partner began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.
Their attorney, Greenberg, admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals. This went on for more than a year, during which time Gettel, Greenberg, and their co-conspirators obtained at least $33.6 million in fraudulent proceeds from no less than eight multi-million dollar fraudulent loans.
Greenberg also pled guilty to participating in an equally massive fraud that occurred in Tucson, Arizona, where he worked for Conix and VCRE. In that scheme, Greenberg admitted that he and his co-conspirators obtained tens of millions of dollars in unearned payments from a real estate financing firm by creating false invoices and expense reports for work purportedly performed on their commercial real estate portfolio. Instead of using the money to refurbish their commercial properties as required, Greenberg and his co-conspirators used the tens of millions of dollars they generated for their own personal use and benefit.
Gettel relied on Greenberg to help hide the true nature of the transactions. He directed the proceeds to Greenberg’s attorney-trust bank accounts before distributing the money further. He also relied on other co-conspirators to forge his own signature and then fraudulently notarize the forgeries, so documents would be harder to trace back to the perpetrators. In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless. Gettel and his partner agreed to conceal their fraud by falsely denying any knowledge about the fraudulent loans. They also tried to cover up the scheme further by creating yet more fraudulent documents to hide their tracks. Another co-conspirator – who was a notary public – notarized fraudulent documents, hid or destroyed her notary book, and then falsely reported it lost to the California Secretary of State.
As part of their pleas, Gettel and Greenberg agreed to forfeit the proceeds they stole from the various lenders and pay restitution to the victims.
“Wealth and privilege will not insulate anyone from aggressive prosecution for their crimes,” said U.S. Attorney Laura E. Duffy. “These defendants thought they could hide behind their status to pull off an extraordinary fraud—but as this case demonstrates, I am devoted to making sure the playing field is level and all criminals are held accountable.”
“The defendants in this case used their professional business and legal experience to feed their greed,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to pursuing those who engage in fraudulent schemes that line their pockets at the expense of others.”
Greenberg, who was charged in Tucson and San Diego before the cases were transferred to the Southern District of California, made his initial appearance in San Diego on May 17, 2016 before U.S. Magistrate Judge Karen S. Crawford, and entered his guilty pleas the following day. Gettel made his initial appearance today, also before Judge Crawford. Both defendants are scheduled to be sentenced before U.S. District Judge William Q. Hayes on August 8, 2016.
The swift resolution of this elaborate fraud case is the result of close collaboration and invaluable assistance from the U.S. Attorney’s Office in the District of Arizona, FBI Tucson Resident Agency and the IRS Criminal Investigations in Tucson.
DEFENDANTS:
Jeffrey Greenberg, 16CR1076-WQH and 1077-WQH Age: 66 Tucson, AZ
Courtland Gettel, 16CR1099-WQH Age: 42 Coronado, CA
CHARGES
Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Conspiracy, in violation of 18 U.S.C. § 371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
Federal Bureau of Investigation
Bonita Couple Admit Lack of Money Laundering ControlsRead the Press Release
Assistant U. S. Attorney Robert Ciaffa (619) 546-7748
NEWS RELEASE SUMMARY – May 17, 2016
SAN DIEGO – Bonita residents Angelica Padilla and her husband, Valente Marquez, pleaded guilty in federal court today, admitting that they failed to establish and maintain an effective anti-money laundering program in connection with their money transmitting businesses. The guilty pleas were heard before U.S. Magistrate Judge Karen Crawford.
Under U.S. law, any business which provides check cashing, currency exchange, or money transmitting or remittance services, or any person who engages as a business in the transmission of funds, must register with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). In addition, any such business must establish and maintain an anti-money laundering program including the development of internal policies, procedures and controls.
According to the plea agreements, Padilla and Marquez owned and operated money transmitting businesses in Bonita, through which they accepted and transmitted large amounts of U.S. currency. Although Padilla and Marquez registered their businesses with FinCEN, they admitted that they lied to financial institutions about the true nature of their operations.
Specifically, Padilla operated money transmitting businesses under the names “Giros Express” and “Liberty Metals and Coins,” while Marquez operated a money transmitting business under the name “Cuva.” Both falsely claimed that they were in the business of buying and selling precious metals. All three businesses operated from an office at 4045 Bonita Road.
As part of their plea agreements, Padilla and Marquez agreed to cease operating as money transmitters and to relinquish their licenses. In addition, both agreed to forfeit $400,000.
U.S. Attorney Laura Duffy said, “Those who choose to operate a money transmitting business under U.S. law must fully comply with all federal regulations governing their operations, and will be held to the highest standards to ensure that criminal proceeds do not filter into the financial system.”
The defendants are scheduled to be sentenced on August 8, 2016 at 9 a.m. before U.S. District Judge Cynthia Bashant.
DEFENDANTS Case Number 16cr1075
Angelica Padilla Age: 39 Bonita, CA
Valente Marquez Age: 41 Bonita, CA
SUMMARY OF CHARGES
Failing to Maintain Effective Anti-Money Laundering Program – Title 31, U.S.C., Section 5318(h)
Maximum penalty: 10 years’ imprisonment and $500,000 fine
AGENCY
Immigration and Customs Enforcement’s Homeland Security Investigations
Recruiter Admits Guilt in Smuggling Death of Two Migrants in Trunk at San Diego-Tijuana BorderRead the Press Release
Assistant U.S. Attorneys Patrick J. Bumatay (619) 546-8450 and Michael Wheat (619) 546-8437
NEWS RELEASE SUMMARY – May 12, 2016
SAN DIEGO – Eduard Ervemac Saavedra pleaded guilty in federal court today to charges resulting from 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, Saavedra, a citizen of Peru, admitted to enticing Nicholas George Zakov, 43, to smuggle undocumented aliens into the United States with the prospect of $3,500 cash. After recruiting Zakov, on the morning of August 12, 2014, Saavedra arranged for two Mexican citizens, Tarcisio Casas-Blanco and Jose Aurelio Quiroz-Casas, 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 with 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, previously pleaded guilty to alien smuggling charges for his role in the deaths of Casas-Blanco and Quiroz-Casas and was sentenced to 84 months in prison by U.S. District Judge Anthony J. Battaglia.
The investigation and arrest of Saavedra 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.
Saavedra pleaded guilty to two counts of encouraging and inducing illegal aliens resulting in death and two counts of bringing illegal aliens into the United States for financial gain. Saavedra faces up to life imprisonment, a mandatory minimum sentence of three years in prison, and a $250,000 fine. Saavedra is scheduled to be sentenced by Judge Battaglia on July 25, 2016 at 11 a.m.
DEFENDANT Criminal Case No. 14CR3066-AJB
Eduard Ervemac Saavedra Age: 44 Tijuana, Mexico
a.k.a. Edward Saavedra
a.k.a. Reenzo Saavedra-Cormeyo
SUMMARY OF CHARGES
Counts 1 and 2: Encouraging and Inducing Illegal Aliens, Aiding and Abetting, Resulting in Death, 8 U.S.C. §1324(a)(1)(A)(iv), (v)(II), and (a)(1)(B)(iv)
Counts 3 and 4: Bringing in Illegal Aliens for Financial Gain, Aiding and Abetting 8 U.S.C. §1324(a)(2)(B)(ii) and 18 U.S.C. § 2
INVESTIGATING AGENCIES
U.S. Customs and Border Protection
Homeland Security Investigations
San Diego Police Department
Baja California State Preventive Police Department
Chinese Citizen Admits Selling $1.5 Million in Counterfeit Cell Phone PartsRead the Press Release
Assistant U.S. Attorneys Nicholas W. Pilchak (619) 546-9709 and Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – May 11, 2016
SAN DIEGO – A Chinese citizen pleaded guilty today to selling at least $1.5 million of counterfeit cell phone parts to an Imperial County business as part of a years-long conspiracy.
Hongwei “Nick” Du, a Chinese national, pleaded guilty today before U.S. District Judge M. James Lorenz to conspiring to traffic in counterfeit goods and related money laundering charges. According to the plea agreement, Du sold at least $1.5 million worth of counterfeit Chinese cell phone parts from Shenzhen to Spanish national Octavio Cesar Sana, in order to supply Sana’s former business, “Flexqueen.com.”
Du was arrested on February 3, 2015 at the Imperial Valley Airport. Du had traveled to the United States from Shenzhen in order to meet with Sana and others to coordinate further counterfeit trafficking ventures. Du arrived for the meeting bearing samples of counterfeit Apple iPhone components. According to emails that Du had sent before his arrival, he brought the iPhone samples despite concerns about clearing customs because they were “copy ones” with “apple logo.”
The investigation leading to Du and Sana’s arrests was spearheaded by Homeland Security Investigations (HSI) and the Internal Revenue Service, Criminal Investigations. HSI executed a series of nationwide searches in connection with the arrests, including those in Tampa, Florida; Brownsville, Texas; Boston, Massachusetts; Atlanta, Georgia; Pittsburgh, Pennsylvania; Nashville, Tennessee; and Orange, San Diego and Imperial counties in California. These searches resulted in the seizure of more than 55,000 counterfeit items, and additional criminal charges in several jurisdictions.
According to the plea agreement, since 2007, Sana’s businesses sold approximately $6.5 million in cell phone parts and accessories to businesses and consumers throughout the United States. In turn, Sana paid approximately $3.1 million to Du, his primary Chinese supplier. Du admitted that roughly half of those parts were counterfeit. Sana pled guilty to similar charges in September 2015.
Du also admitted in his plea agreement that he and his co-conspirators used extensive methods to frustrate the ability of U.S. Customs and Border Protection to detect, inspect and intercept their imported counterfeit goods, such as shipping merchandise with “protective stickers” strategically placed to obscure the products’ infringing trademarks. The plea agreement also explains that Du and Sana utilized a dedicated shipping channel for branded goods to avoid attention from Chinese customs officials.
As part of his plea agreement, Du has agreed to forfeit $1.5 million.
“Trafficking in counterfeit goods threatens consumers and the marketplace,” said U.S. Attorney Laura E. Duffy. “Customers buying trademarked products for their personal devices should be able to have confidence that the products aren’t sophisticated forgeries.” U.S. Attorney Duffy noted that the counterfeit goods business is booming; U.S. Customs and Border Protection (CBP) reported that in 2014 alone, it intercepted an estimated $1.2 billion of counterfeit goods in more than 23,000 seizures.
Duffy commended the close coordination between the investigating agencies—the Department of Homeland Security, Homeland Security Investigations; the Internal Revenue Service, Criminal Investigations; and the U.S. Postal Inspection Service—during the lengthy investigation of this case. The Department of Justice’s Office of International Affairs also provided invaluable assistance.
“This investigation underscores HSI’s commitment to pursuing transnational criminals seeking to exploit the U.S. economy,” said Dave Shaw, special agent in charge for ICE HSI in San Diego. “I commend the work by HSI and our federal law enforcement partners for their outstanding efforts that uncovered a counterfeit scheme which threatened the U.S. marketplace and defrauded consumers.”
“As previously alleged, the defendants ran a sophisticated multi-million dollar counterfeit and money laundering scheme whose reach stretched from China to the Imperial Valley. Counterfeit cellphone parts imported from China were sold to the American consumer with U.S. Dollars going back to China in an effort to promote their counterfeit goods trafficking venture,” stated acting Special Agent in Charge Anthony J. Orlando with IRS Criminal Investigation. “Today’s plea demonstrates that IRS CI will remain an integral part of the U.S. Government’s commitment to maintaining the integrity of the international financial system.”
Du will appear for sentencing on August 15 at 9 a.m. before Judge Lorenz. Octavio Sana is set to be sentenced by Judge Lorenz on May 23, 2016.
DEFENDANT Case No. 16-cr-00930
Hongwei Du 33 years old Shenzhen, People’s Republic of China
CHARGES
Conspiracy to Traffic in Counterfeit Goods - 18 U.S.C. § 371
Maximum penalty: 5 years’ imprisonment and $250,000 fine
Money Laundering Conspiracy – 18 U.S.C. § 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
RELATED DEFENDANTS
Case No. 15-cr-612-L
Angela Rose Vela 36 years old El Centro, CA
Case No. 15-cr-2316-L
Octavio Cesar Sana 42 years old El Centro, CA
AGENCIES
Homeland Security Investigations
Internal Revenue Service – Criminal Investigations
U.S. Postal Inspection Service
Owner Admits Underground Sewage Dumping at Dunes Toy Storage in HoltvilleRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO –Daniel Williams of Arizona pleaded guilty today in federal court, admitting that he concealed the illegal underground disposal of sewage at a recreational vehicle (RV) storage location in Holtville, California.
In 2005, Williams formed a partnership known as Dunes Toy Storage with another individual. In entering his plea, Williams acknowledged that a septic leach system was installed at Dunes Toy Storage even though he had no authorization from the EPA, and the permit obtained from Imperial County specifically prohibited the use of leach lines.
Williams admitted that he was aware that the sewage was leaching out underground at the site from 2006 to 2015. Williams stated that even after he became aware of the federal felony prosecution of Glamis Dunes Storage for the same offense, he concealed the existence of the underground discharge at Dunes Toy Storage and did not bring it to the attention of the authorities. Over the last decade, hundreds of thousands of gallons of improper waste was discharged at the site.
“Pollutants that are improperly discharged can contaminate our water supplies and sicken or injure people and wildlife,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “That’s why it is imperative that we enforce environmental laws and hold polluters accountable. Today’s plea demonstrates that EPA and its law enforcement partners are committed to protecting public health and the environment.”
Williams is scheduled for sentencing before U.S. District Judge Janis L. Sammartino on August 5, 2016, at 9:00 a.m.
DEFENDANTS Criminal Case No. 16cr1003-JLS
Daniel Williams Age: 67 Littlefield, Arizona
SUMMARY OF CHARGES
Misprison of a Felony– Title 18, U.S.C., Section 4
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Bureau of Land Management, Office of Law Enforcement; U.S. Environmental Protection Agency, Criminal Investigations Division
Husband and Wife Conceal Death of Parent for More Than a Decade to Steal Social Security Retirement BenefitsRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO – Terry Lee Anderson and Melanie Jane Anderson of Watauga, Texas, pleaded guilty today in federal court to theft charges, admitting they concealed the death of Melanie’s father, Mervin Hartman, thereby stealing approximately $100,000 in Social Security retirement benefits.
According to court documents, Mervin Hartman died in January 2002 while living in the Philippines. Normally, the Social Security Administration automatically ceases payments upon the death of a retiree, but in this case no death certificate or other notification was provided due to Hartman’s death overseas. As a result, the Social Security Administration continued to directly deposit monthly retirement benefits through 2013 – at which time the SSA/OIG investigation uncovered his death overseas.
The investigation revealed that Hartman’s bank account had been kept active after his death, and that the only people who had accessed the account and withdrawn the funds were the Andersons, who were then living in the Southern District of California.
In entering their guilty pleas, each of the defendants admitted that they had concealed Mervin Hartman’s death from the Social Security Administration and from his bank. They also admitted that they specifically knew Hartman’s retirement benefits should not have continued after his death, and that they stole the money and converted it to their own use.
As a part of their plea agreement, the Andersons agreed to pay restitution in the amount of $95,877.78 to the Social Security Administration. Both are scheduled to be sentenced on August 15, 2016, before U.S. District Judge Marilyn L. Huff.
DEFENDANT Criminal Case No. 16cr1002-H
Terry Lee Anderson Watauga, TX Age: 70
Melanie Jane Anderson Watauga, TX Age: 65
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment and $250,000 fineAGENCIES
Social Security Administration / Office of Inspector General
Calipatria State Prison’s Drug Counselor, Inmates and Others Indicted in Drug Smuggling ConspiracyRead the Press Release
Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO – Eight people, including a supervisory drug counselor at Calipatria State Prison and inmates who participated in the drug rehabilitation program, were indicted by a federal grand jury on charges that they were members of a network that smuggled methamphetamine, heroin and marijuana into the prison.
This is the first large-scale drug smuggling conspiracy prosecuted in connection with a prison in the Southern District of California. The drugs and scores of cell phones smuggled into the prison by the drug counselor on one occasion were estimated to have a prison value of nearly $1.2 million.
This is also the first time that the San Diego Federal Bureau of Investigation and California Department of Corrections and Rehabilitation officials have targeted not only the corrupt prison official, but inmates and their conspirators on the outside. Federal law enforcement officials announced today that, going forward, they will continue to take an aggressive stand against this dangerous activity and targeting all involved.
“We are putting everyone on notice: Whatever part you play in the prison smuggling equation, you’re going to be held accountable,” said U.S. Attorney Laura Duffy. “If you smuggle drugs and contraband into prisons located in the Southern District of California, we will prosecute you federally. And if you’re in prison, we’re not going to overlook you just because you’re already there.”
“While occupying a position of trust Ms. Carr is alleged to have facilitated the distribution of drugs within the prison population at Calipatria State Prison, thereby undermining the correction and rehabilitation of its inmates,” commented FBI Special Agent in Charge (SAC), Eric S. Birnbaum. “The smuggling of contraband is not only a threat to the integrity of our prison system, but to the safety of the American public which is why the FBI is committed to rooting out corruption at all levels within our prison system.”
“We take allegations of staff smuggling drugs into prison very seriously,” said CDCR California Department of Corrections and Rehabilitation Secretary Scott Kernan. “CDCR fully investigates, and assists in any prosecutions. In this case, we appreciate the collaboration with the FBI and the U.S. Attorney’s Office.”
The key defendant, Angela Carr, was a supervisory drug counselor at the prison. In that capacity, she routinely met with inmates attending the prison’s substance abuse program. Four of Carr’s co-conspirators are inmates – three of whom participated in her drug-addiction recovery program. One of those inmates, D’Mondo Burns, was a drug counseling mentor to other inmates. The other inmates charged include Ryan Hawes, Nathaniel Frazier and Brandon Carroll.
So while these inmates purported to be seeking help in kicking their drug habits, in fact, they were utilizing the prison’s drug counseling program to smuggle drugs and other contraband into the facility.
Hawes was arrested this morning in Lancaster; Walters was arrested in West Covina and Frazier was arrested in Los Angeles. Burns and Carroll were already in custody; Watson and Turner are at large.
According to a search warrant affidavit, Carr received the drugs from three women who have relationships with inmates at Calipatria. They are identified as Brittney Turner, Tameika Watts and Myesha Walters.
According to the search warrant, Carr would meet the women in parking lots of bowling allies and big-box stores in Palmdale and Moreno Valley to receive the drugs and contraband. Carr then would bring the controlled substances - including methamphetamine, heroin, marijuana, Xanax, Valium, Soma and Norco - into the prison, concealed in chip bags, Quaker Oatmeal boxes and cookie and coffee containers. The indictment also alleges that Carr smuggled as many as 40 cell phones at a time into the prison.
These phones were to be sold to other inmates, and used to coordinate criminal activity both inside and outside the facility. All told, authorities believe Carr smuggled drugs and contraband into the Calipatria prison on at least three occasions.
In return, Carr was paid about $3,500 in total. Prison staff do not end up making as much money from these criminal enterprises as they might expect. Manipulative inmates convince correctional staff to first bring in items that seem innocuous, like tobacco and currency. But once the official has done so, inmates quickly begin pressuring the official, under threat of exposure, to bring in drugs, cell phones or other dangerous contraband including items that could be used as weapons. These crimes endanger the safety of the staff and inmates and undermine the security of the public at large.
Carr’s alleged corruption was discovered in August of 2015 when she was confronted at the staff entrance of the prison, reeking of marijuana. She was found to be secretly carrying all of these contraband items. She had almost a pound of methamphetamine; 4 pounds of marijuana; a quarter-pound of heroin; 409 tablets of Soma, Xanax, Valium and Norco; 212 grams of tobacco; four bottles of cough syrup and 39 cell phones. Carr was detained and her case is pending.
Calipatria State Prison opened in 1992 and houses about 3,661 inmates. There are 1,280 employees at the prison.
The FBI encourages the public to report allegations of public corruption to our hotline at (877) NO-BRIBE (662-7423).
DEFENDANTS Case Number 15cr3087
Angela Carr Age 44 Moreno Valley
Ryan Hawes Age 25 Lancaster
Brittney Turner Age 29 Lancaster
Nathaniel Frazier Age 28 Los Angeles
Tameika Watts Age 29 Los Angeles
D’Mondo Burns Age 26 Calipatria State Prison
Brandon Carroll Age 34 Calipatria State Prison
Myesha Walters Age 34 West Covina
SUMMARY OF CHARGES
Possession of Controlled Substances with Intent to Distribute – Title 21, U.S.C., Section 841(a) (1)
Maximum Penalty: Life in Prison
Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Sections 841(a) (1) and 846
Maximum Penalty: Life in Prison
AGENCY
Federal Bureau of Investigation
California Department of Corrections and Rehabilitation’s Office of Internal Affairs
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
For Visuals, please see www.justice.gov/usao-sdca/gallery/photos-press-conference-may-10-2016
Judge Sends Sea Turtle Egg Smugglers to PrisonRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 6, 2016
SAN DIEGO – Jose and Olga Jimenez of Hemet, California, were sentenced in federal court today to six months in custody for smuggling 911 eggs of the endangered olive ridley sea turtles into the United States from Mexico.
In imposing sentence, U.S. District Court Judge Janis L. Sammartino noted that the case involved the largest seizure in U.S. history of sea turtle eggs imported from Mexico, and the method of transportation (26 hours on ice by bus) caused the eggs not to be viable, preventing any mitigation. Judge Sammartino stated that a custodial sentence was justified based on the serious impact on the species resulting from the offense.
According to sentencing papers filed with the court, on November 23, 2014, Olga Jimenez boarded a bus in Nayarit, Mexico, in order to travel north to Tijuana. Ms. Jimenez had spent the week visiting family and was traveling with her sister. Ms. Jimenez brought with her a large white cooler containing 911 sea turtle eggs (weighing 61 pounds). The eggs were stored in nine plastic bags, concealed underneath a thin layer of fish and shrimp, and separated from the fish and shrimp by an additional layer of ice.
On November 24, 2014, Olga’s husband, Jose Jimenez, drove from their residence in Hemet, California, to the border and walked across to meet her in Mexico. The defendants met at the bus station in Tijuana and transferred the eggs from Ms. Jimenez’s single white cooler into two smaller red coolers that Mr. Jimenez had brought with him. The couple again covered the eggs with a layer of ice and then a layer of fish and shrimp on top.
Two of the defendants’ sons had traveled to Mexico to meet their aunt and drive her from the bus station in Tijuana to her residence in the Los Angeles area. The defendants asked their son to take the two coolers across the border in his pick-up truck. Their sons agreed after being told that the coolers contained only fish and shrimp, presuming the coolers would be dropped off at their parent’s home in Hemet.
The sons and their aunt attempted to enter the United States in the pick-up truck, while the defendants entered the United States as pedestrians. At the San Ysidro Port of Entry, their son driving declared the fish and shrimp he was told were in the cooler. The border inspectors began searching the cooler and quickly discovered the contraband sea turtle eggs. When confronted with the eggs, all three individuals in the pick-up truck told the officers that they were unaware of the eggs origin or presence.
Olga Jimenez was aware that her children and sister had been sent to secondary inspection because one of her sons had called her as soon as they were stopped. After the sea turtle eggs were discovered, she did not respond to several phone calls and texts from her son.
According to the sentencing papers, Olga Jimenez has sold seafood in the United States in the past. Her clients include a mechanic who told investigators that he has purchased seafood from Ms. Jimenez approximately 20 times and that he usually purchased seafood from her by the kilogram. He also related that she has sold him specialty items such as marlin and scallops.
Olga Jimenez has also been stopped at the border on several other occasions for attempting to bring seafood and protected species into the United States. Customs records indicate that on June 23, 2013, Olga Jimenez entered the United States with five parrots and 5 pounds of ciruelas (a plum not permitted entry due to the potential to contaminate U.S. crops). The ciruelas were concealed under a layer of dried shrimp in a box. The parrots were found to be a species covered by the Convention on International Trade in Endangered Species (CITES) and were seized, along with the cireulas, and Jimenez was assessed an administrative penalty.
On August 27, 2009, Olga Jimenez was returned to Mexico because she was bringing a commercial quantity of food without a commercial declaration. On March 20, 2009, Olga Jimenez was admonished as a recidivist, bringing a commercial quantity of food without a commercial declaration. On March 5, 2009, Olga Jimenez was returned to Mexico for bringing a commercial quantity of fish and shrimp into the United States without a commercial declaration. On May 30, 2008, Olga Jimenez was assessed an administrative penalty as a recidivist for bringing in a commercial quantity of food without a commercial declaration. On October 10, 1999, Olga Jimenez was admonished for bringing in a commercial quantity of fish. On July 24, 1999, Olga Jimenez was assessed an administrative penalty for bringing in a commercial quantity of fish.
The significance of the defendants’ illegal acts is further heightened by the paucity of olive ridley sea turtles in Mexico. According to the National Oceanic and Atmospheric Administration, the Nayarit area currently only has a nesting population of 100 females. The impact of poaching on this small population is more significant than on a large nesting beach, as sea turtles come back to the same nesting beach from which they hatched. The 911 eggs taken by the defendant represent 4.3% of the total egg production for that nesting season at the beach in Nayarit.
Offenses involving eggs have a unique capacity to harm the species. When an egg is destroyed, the defendant removes not only that specific potential animal from the population, but also all potential offspring that could have eventually been borne by that animal and its descendants. According to the statistics from the International Union for the Conservation of Nature and Natural Resources relating to the hatch rate and reproductive rate, the number of third generation offspring lost in this case is greater than the entire nesting population of olive ridley sea turtles in Nayarit.
Olive ridley and sea turtles were initially identified as endangered under the U.S. Endangered Species Act, in 1978, and in 1981, they were placed on Appendix I of the Convention on International Trade in Endangered Species (“CITES”). Both Mexico and the United States are signatories to CITES. It is a violation of law in both countries to trade in olive ridley sea turtles or any part of those sea turtles, including their eggs, without permission from the respective governments.
Olive ridley sea turtles (Lepidochelys olivacea) inhabit a broad range extending in the South Atlantic Ocean from West Africa to South America and in the eastern Pacific Ocean from Southern California to Northern Chile. Adults weigh approximately 100 pounds, and have olive/grayish-green heart-shaped shells measuring 22‑31 inches in diameter.
“The loss of hundreds of endangered sea turtle eggs is immeasurable,” said U.S. Attorney Laura Duffy. “This case is another example of our commitment to prosecuting wildlife traffickers who seek to profit from illegal trade in endangered species here at the border.”
“The U.S. Fish and Wildlife Service Office of Law Enforcement works diligently with our partner agencies at the border to curb the illegal wildlife trade as it indelibly harms a wide variety of endangered species,” said US Fish and Wildlife Service Special Agent in Charge Jill Birchell. “In their unscrupulous quest to reap profits, smugglers of wildlife and wildlife products continue to damage extremely vulnerable species, and are pushing some critically endangered animals and plants on a path toward extinction. Halting the illegal wildlife trade remains one of our highest priorities.”
“Smuggling wildlife of any kind, especially endangered species, is something we take seriously,” said Eileen Sobeck, assistant administrator for NOAA Fisheries. “We will not tolerate violation of federal and international laws regarding the illegal trade of endangered species, and we will continue to take a hard stance in combating wildlife trafficking.”
A further hearing regarding the amount of restitution to be paid to the government of Mexico for the loss of its natural resource is set for Friday, June 10, 2016, at 2:00 p.m.
DEFENDANTS Criminal Case No. 15cr2867-JLS
Olga Jimenez Age: 52
Hemet, California
Jose Jimenez Age: 64
Hemet, California
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
Smuggling- Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
Importation Contrary to Law- Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
Unlawful Trafficking in Wildlife-Title 16, U.S.C. Sections 3372 and 3373
Maximum penalty: Five years in prison and $250,000 fine
Criminal Forfeiture- Title 16, U.S.C., Section 3374
AGENCIES
U.S. Fish and Wildlife Service, Office of Law Enforcement
National Oceanic and Atmospheric Administration, Office of Law Enforcement
SeaWorld Manager Pleads Guilty to Stealing More than $1 MillionRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – May 5, 2016
SAN DIEGO – Former SeaWorld San Diego manager Wilfred David Joseph Jobin-Reyes, also known as Sebastian Jobin, pleaded guilty in federal court today to wire fraud and tax charges, admitting he embezzled a total of $818,000 from SeaWorld over more than eight years.
Jobin-Reyes, who admitted orchestrating the scheme while working as a show producer at the marine mammal park, used his management position at SeaWorld to cause the park to pay more than 100 fake invoices from a sham company he secretly owned, called “SJ Merchandise.”
SeaWorld officials found the invoices to be suspicious because many of them were for amounts just under $10,000 – a threshhold that if exceeded would trigger further scrutiny by senior management. According to court documents, SeaWorld also discovered that the invoiced items—for disposable goods such as “wildlife animal bookmarks,” “sea creature rings,” “purple shiny ornaments,” and “poinsettia in pots”—were never actually delivered to SeaWorld.
Investigators discovered that Jobin-Reyes had created the fake invoices using his work computer. And he used aliases, including the made-up name “John Caldwell,” to conceal his ownership and control of the company when communicating with SeaWorld.
Jobin-Reyes admitted that he used the sham merchandise company to cheat the IRS by claiming fake expenses on his taxes. By pretending that his business suffered hefty losses, Jobin-Reyes reduced the amount of taxes he claimed he owed, and underpaid more than $200,000 in taxes he owed from 2010 through 2014. In fact, none of the claimed expenses were true, because SJ Merchandise didn’t conduct any real business.
As part of today’s plea, Jobin-Reyes also admitted that he took advantage of a friend’s innocent efforts to help him get his sham business afloat. He convinced his friend to open business banking and credit accounts, using the friend’s social security number and good credit, then used those accounts to receive and disburse the illegal proceeds from SeaWorld. He also went on to use the friend’s social security number to open several new credit cards, without the friend's knowledge. Jobin-Reyes admitted that he left his friend with unpaid and overdue balances of at least $177,000.
Jobin used the money he stole from SeaWorld, the taxpayers, and his friend’s credit cards to fund a lavish lifestyle he could not otherwise afford. He spent the proceeds on plane tickets, hotels, restaurants and shopping. In the year preceding his arrest, according to court documents, he traveled around the country from New Orleans to Hawaii, spending the stolen money. He even arranged to have credit cards printed for his family members, secretly racking up more debt on his friend’s credit.
“We are dedicated to protecting our local businesses, citizens, and taxpayers from corruption,” said U.S. Attorney Laura Duffy. “Business insiders who abuse the trust of their employers and the community will be held accountable and brought to justice.”
U.S. Secret Service Special Agent in Charge David Murray said, “I commend the special agents from the Secret Service and the IRS whose tireless work during this investigation resulted in today’s court action. The Secret Service will continue to work with our law enforcement partners to hold accountable those who commit these types of financial crimes against the citizens and local businesses of San Diego.”
“Mr. Jobin-Reyes abused his position as a manager at SeaWorld for his own selfish gain; when that was not enough, he went on to defraud the government by claiming false expenses and failing to report significant income on his tax return,” said Aimee Schabilion, acting Special in Charge for IRS Criminal Investigation. “IRS Criminal Investigation continues to work with our law enforcement partners, to identify, investigate, and prosecute individuals like Jobin-Reyes who engage in fraud and deceit in order to satisfy their greed.”
Jobin-Reyes was arrested in Dallas, Texas in March 2016, and since arrest he has been detained in federal custody as a flight risk. U.S. District Judge Jeffrey T. Miller is scheduled to revisit the detention order at a hearing at 11:00 am tomorrow.
Jobin-Reyes is scheduled to be sentenced by Judge Miller on August 5, 2016 at 9 a.m.
DEFENDANT
Wilfred David Joseph Jobin-Reyes, 16CR0811-JM Age: 47 San Diego, CA
CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Filing False a Tax Return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
United States Secret Service
Internal Revenue Service Criminal Investigation
Officials Take Down Gang-Affiliated Drug Traffickers; Remove Methamphetamine, Heroin and Guns from the StreetRead the Press Release
Assistant U. S. Attorneys Andrew Haden (619) 546-6961 and Seth Askins (619) 546-6692
NEWS RELEASE SUMMARY – May 5, 2016
SAN DIEGO – As residents of the Skyline neighborhood expressed gratitude, federal agents arrested 18 suspected gang members and associates who are charged with gun and drug-trafficking crimes in federal grand jury indictments unsealed yesterday and today.
The majority of arrests occurred in the Skyline and Paradise Hills neighborhoods – areas historically plagued by gang violence. Just days ago, a shooting at nearby Emerald Hills Park left one person dead on May 1, and two days later there was an officer-involved shooting a few miles away.
Following a yearlong investigation and a two-day sweep that concluded this morning, 25 defendants were charged and six firearms were taken off the streets. Over 1,500 grams of methamphetamine and 248 grams of heroin were also seized as part of the investigation. Seven defendants are still at large.
The two indictments describe four different conspiracies with overlapping players, including individuals with ties to criminal street gangs, including Skyline, the Samoan Bloods, Kalaban, the Stateside Islanders, the Paradise Hills Locos, Logan Heights, Old Town National City, National City Southside Mob, Trust No Soul, and Lincoln Park.
According to the indictments and a search warrant affidavit, most defendants were drug traffickers selling methamphetamine. Some of the conspiracies involved the importation of methamphetamine and heroin from Mexico. Some of the defendants were felons in possession of firearms.
According to federal agents, during the execution of the search warrant at a residence on Brookhaven Road, several members of the community thanked law enforcement for their efforts in helping make the community safer.
“Methamphetamine is ravaging our communities, and it’s not just users who are suffering,” said U.S. Attorney Laura Duffy. “Residents in these meth- and gang-infested areas deserve to live in peace, free of gunfire, violence and fear.”
“HSI and our law enforcement partners have successfully disrupted a contraband smuggling operation linked to several San Diego-area gangs,” said Dave Shaw, special agent in charge for HSI San Diego. “As part of this joint investigation, we have dealt a serious blow to violent gang organizations. Combating violent crime to make our communities safe is a top priority.”
“Competition between these dealers over control of the drug trade, combined with criminal street gang influence, was creating a dangerous environment for our entire community,” said San Diego Police Chief Shelley Zimmerman. “The success of this joint operation with our law enforcement partners has made our neighborhoods safer.”
Eleven defendants were arraigned in federal court today and one yesterday before U.S. Magistrate Judge Nita L. Stormes.
DEFENDANTS
United States v. Ortiz, et al, 16-CR-874-JAH
FRANCISCO JAVIER ORTIZ-LUNA (1) – 33 years old
JAVIER HERNANDEZ (2) – 23 years old
YARELI MAGNOLIA NORIEGA (3) – 27 years old
JASMINE EUNIQUE RIPP (4) – 29 years old
*JULIO ALBERTO ONTIVEROS (5) – 38 years old
SUMMARY OF CHARGES
Title 21, U.S.C., Secs. 952, 960, 963 Conspiracy to Import Controlled Substances - Life
Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine - Life
Title 21, U.S.C., Secs. 952 and 960 Importation of Methamphetamine – 20 years
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – 40 years
Title 21, U.S.C., Secs. 952 and 960 B Importation of Heroin – 40 years
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Heroin with Intent to Distribute – 20 years
DEFENDANTS
United States v. Usini, et al., 16-CR-875-JAH
FILI USINI (1) - 42 years old
VIRGILIO SORIANO VILLEGAS (2) – 43 years old
CARL DELANDO BRANDON (3) – 45 years old
DEANDRE COOK (4) – 46 years old
FRANC LESTER BULARAN (5) – 35 years old
ANTHONY VELARDE (6) – 31 years old
KRISTOFFER UMALI MACALMA (7) – 29 years old
BICENTENNIAL POUTOA (8) – 39 years old
VICTOR CERVANTES (9) – 42 years old
*JORGE ARMANDO SALAS (10) – 44 years old
*MAURICE SCOTT (11) – 45 years old
JAMES GILLESPIE (12) – 47 years old
KEITH IAULUALO (13)- 33 years old
LONNIE DARNELL ANDERSON (14) – 47 years old
TERRENCE ANDERSON (15) – 46 years old
*PATRICK JEFFREY DIBBLE (16) – 42 years old
*KEMONDRE HAMILTON (17) – 35 years old
*RICHARD BELCHER (18) – 53 years old
LAVONN WILLIAM HALL (19) – 45 years old
*ANITA VILLALBA (20) – 53 years old
SUMMARY OF CHARGES
Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine – Life
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – Life
Title 18, U.S.C., Sec 922(g)(1) – Felon in Possession of a Firearm – 10 years
Title 21, U.S.C., 853, Title 18, U.S.C., 924(d), and Title 28, U.S.C., 2461(c) – Criminal Forfeiture
AGENCY
Immigration and Customs Enforcement’s Homeland Security Investigations
San Diego Police Department
Drug Enforcement Administration
Bureau of Alcohol Tobacco Firearms and Explosives
San Diego Sheriff’s Department
San Diego County Probation Department
El Cajon Police Department
San Diego County District Attorney’s Office
U.S. Bureau of Prisons
*Fugitives
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Broker Admits Lying to Investigators and Obstructing La Jolla Bank Bribery InvestigationRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Nicholas W. Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – May 5, 2016
SAN DIEGO – Jocelyn J. Brown, a loan broker for the now-defunct La Jolla Bank, pleaded guilty today to making false statements in relation to an investigation into bribes paid to the bank’s Vice President and Small Business Administration (“SBA”) lending department manager Amalia Martinez.
As part of her guilty plea, Brown admitted that she paid cash bribes in return for the banker’s assurance that the loans Brown referred would be approved and funded, and, therefore, that Brown’s commissions would be paid. Brown collected tens of thousands of dollars in referral fees from La Jolla Bank, and kicked back a portion to the bank manager, in cash, every time she was paid.
La Jolla Bank was a bank and financial services company that provided consumer, business, and construction loans. It opened its SBA lending department in 2005. In February 2010, the bank failed, and was taken over by the FDIC. At the time of its failure, the bank had outstanding debt of over $1 billion, which the FDIC absorbed—and ultimately passed on to the American taxpayers.
According to the plea agreement, Brown worked as an unofficial broker for La Jolla Bank, referring business loan customers to the bank’s SBA department. As part of this job, Brown helped her borrowers compile their loan application packages and submit them to the bank. In return for generating business, La Jolla Bank paid Brown a commission or referral fee, calculated as a percentage of each loan she referred.
Brown admitted that in 2006, Martinez asked her to kick back a portion of her commissions, in cash, after her clients’ loans were funded. In turn, Martinez would make sure that Brown’s clients’ loans were approved so that Brown could collect commission payments, regardless of the soundness of the loans and their benefit to the bank. In addition, the Martinez arranged to pay Brown a fraudulent $30,000 “commission” for a loan she in fact had no part in brokering. Brown went so far as to generate a fake invoice, pretending that she had earned the commission.
Brown admitted that she lied to law enforcement agents by concealing these bribe payments and hiding her relationship with Martinez. During the investigation, she told federal agents, falsely, that she never saw Martinez accept money in exchange for loans. And despite the fact that she and Martinez traded several phone calls and text messages and had a sit-down meeting in June 2014, Brown falsely reported to federal agents in September 2014 that she had not spoken to or seen Martinez since before she learned about the federal investigation. In her plea agreement, Brown acknowledged that her false statements significantly impeded the investigation of Martinez.
Since then, however, Martinez has pleaded guilty to accepting bribes, and admitted that she and other senior La Jolla Bank executives accepted hundreds of thousands of dollars in cash bribes and kickbacks from borrowers in return for issuing hundreds of millions of dollars in loans. The bank management issued the loans knowing that the borrowers were unqualified and unlikely to repay, and their mismanagement contributed to the bank’s billion-dollar collapse. Martinez admitted that she participated in a conspiracy with the bank’s senior executives to line their own pockets with bribe money.
Two other defendants have been charged in related cases. SBA borrower Annand Sluman pled guilty and admitted paying cash bribes to Martinez in return for several SBA loans he was issued between 2006 and 2008. By 2008, Sliuman was not financially qualified to borrow money, so he submitted fraudulent documents as part of his loan application that made his businesses appear to be financially sound. Sliuman’s assistant, Laura Ortuondo, assisted in creating the fraudulent loan documents. She pled guilty to making false statements to investigators about her involvement in the case; as part of her plea, she also admitted that she destroyed evidence and instructed her then-husband to testify falsely on her behalf to help cover up the crime.
Brown is scheduled to be sentenced on July 19, 2016 at 9 a.m. by U.S. District Judge Anthony J. Battaglia.
DEFENDANT Case Number 15CR2049-AJB
Jocelyn J. Brown, Age: 60 San Diego, CA
CHARGE
Making a false statement to a federal agent, in violation of 18 U.S.C. § 1001
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
RELATED DEFENDANTS AND CHARGES
Amalia Martinez, 15CR2471-AJB Age 52 San Diego, CA
Conspiracy to misapply bank funds, in violation of 18 U.S.C. § 371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, three years supervised release, $100 special assessment, restitution.
Annand Sliuman, 13CR3673-AJB Age 37 Spring Valley, CA
Bank bribery, in violation of 18 U.S.C. § 215
Maximum Penalties: 30 years’ imprisonment, $1,000,000 fine or three times the value of the thing given, offered, or promised, five years’ supervised release, $100 special assessment, restitution.
Laura Ortuondo, 13CR3879-AJB Age 36 Cupertino, CA
Making a false statement to a federal agent, in violation of 18 U.S.C. § 1001
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
Federal Bureau of Investigation
U.S. Small Business Administration – Office of Inspector General
Treasury Inspector General for Tax Administration
Federal Deposit Insurance Corporation – Office of Inspector General
Department of the Treasury – Office of Inspector General
Federal Housing Finance Agency – Office of Inspector General
U.S. Navy Captain Select Sentenced to over Six Years in Prison for Accepting Cash and Prostitutes in International Bribery SchemeRead the Press Release
A U.S. Navy Captain Select was sentenced today to 78 months in prison for bribery charges, admitting that he accepted cash, gifts, travel expenses, entertainment and the services of prostitutes from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified U.S. Navy information, including ship schedules that contained information related to the U.S. Navy’s ballistic missile defense operations in the Pacific. In addition, he was ordered to pay a fine in the amount of $100,000 and to forfeit $95,000 in proceeds for the scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern District of California, Deputy Inspector General for Investigations James B. Burch of the Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Michael Vannak Khem Misiewicz, 49, of San Diego, was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California for one count of conspiracy and one count of bribery.
According to admissions in his plea agreement, from January 2011 until September 2013, Misiewicz provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to the defense contractor Leonard Glenn Francis, CEO and owner of Singapore-based GDMA. GDMA provided port services to U.S. Navy ships and submarines when they arrived at ports throughout the Pacific.
Misiewicz admitted that when he was stationed in Japan, on the USS Mustin and in Colorado Springs, Colorado, he used his position and influence within the U.S. Navy to advance the interests of GDMA, including by providing Francis with classified ship schedules and other proprietary U.S. Navy information. In return, Misiewicz admitted that Francis gave him cash, paid for luxury travel on at least eight occasions for Misiewicz and his family, provided his wife with a designer handbag and provided Misiewicz with the services of prostitutes on multiple occasions. Throughout the conspiracy, Misiewicz admitted that he and his conspirators took steps to avoid detection by law enforcement by, among other means, using clandestine email accounts, which they periodically deleted.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; and 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; the others await sentencing.
NCIS, DCIS and the Defense Contract Audit Agency are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
Those 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.
Feds Seize Longest Tunnel on California-Mexico BorderRead the Press Release
Assistant U. S. Attorney Timothy Salel (619) 546-8055
NEWS RELEASE SUMMARY – April 20, 2016
SAN DIEGO – Federal officials have seized what is believed to be the longest cross-border tunnel ever discovered along the California-Mexico border, with an estimated length of more than eight football fields, plus officials confiscated more than a ton of cocaine, making it the single-largest cocaine seizure ever associated with a Southern California tunnel.
The tunnel is estimated to be more than 800 yards in length, and probably longer due to its zig-zagging route. It stretches from a house in Tijuana, Baja California, Mexico to an outdoor fenced-in commercial lot in an Otay Mesa industrial park, about 500 yards north of the international border. The tunnel exit on the U.S. side is a three-foot-diameter hole that at one point was covered by a jumbo-sized industrial dumpster.
It is equipped with rail and ventilation systems, lights and a sophisticated large elevator leading from the tunnel into a closet inside the Tijuana residence. It is one of the narrowest tunnels found to date, with a diameter of just three feet for most of the length of the passageway.
Six people were arrested in San Diego Friday and charged by federal complaint with various drug trafficking and tunnel-related charges, including conspiracy to import and distribute cocaine and conspiracy to use a border tunnel.
The defendants include Martiniano Garcia-Sedano, Cruz Armando Parra Corrales, Alejandro Bravo, Juan Carlos Chavez Fabian, Alejandro Gomez-Baez and Osmel Martinez. They were arraigned in federal court before U.S. Magistrate Judge Barbara Major and remain in custody pending detention hearings.
On April 12, agents saw a white commercial truck deliver an industrial dumpster to a lot in Otay Mesa on Marconi Drive and Enrico Fermi Drive. The agents saw the truck back up and, with direction from some of the defendants, drop the dumpster over a specific area that was later discovered to have a hole descending 10 feet into the ground and connecting to an underground tunnel leading to the U.S. Mexico border. Agents noticed the dumpster appeared to be filled with wood scraps.
The next day, agents saw two people cover the dumpster with a tarp. Ten minutes later, a forklift removed stacks of wooden pallets away from the front of the dumpster. Agents watched as defendant Cruz Armando Parra Corrales got down on the ground in a push-up position with his face close to the bottom of the dumpster, in an area where the dumpster connects to the truck, apparently communicating with someone who was inside the dumpster or inside a tunnel below the dumpster.
Soon after that, the truck loaded up the dumpster and transported it to another parking lot on Imperial Avenue near 30th Street, where it was unloaded. Another large box truck was backed up next to the dumpster with its cargo door open. Agents conducting surveillance watched as the defendants placed a tarp between the dumpster and box truck, and then moved back and forth between them. A couple of hours later, the box truck was driven out of the parking lot.
San Diego County sheriff’s deputies stopped the box truck and found 2,242 pounds of cocaine and 11,030 pounds of marijuana.
Federal agents obtained warrants to search the lots and found the tunnel exit. Inside the tunnel they found 68 bales of marijuana weighing 1,638 pounds. The exit was found at the exact location where agents had previously observed Garcia unload the dumpster from the roll off truck, with the assistance of Parra and Bravo. Agents also found an additional 1,430 pounds of marijuana in the dumpster.
In total, authorities seized 2,242 pounds of cocaine and more than 14,000 pounds of marijuana.
“On the surface, few would ever suspect that traffickers were moving multi-ton quantities of cocaine and marijuana worth tens of millions of dollars in such an unassuming way, through this rabbit hole in the ground, in full view of the world around it,” said U.S. Attorney Laura Duffy. “However, we can thank the hyper-vigilant agents who work this area for seeing what many of us would have missed. They don't judge a book by its cover. Whether a grandiose super tunnel or a humble rabbit hole, they home in and are prepared to take whatever action is necessary to secure our border.”
“Homeland Security Investigations and our law enforcement partners collaborated and utilized every resource to take down another cross-border tunnel that posed a threat to national security,” said Dave Shaw, special agent in charge for U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Diego. “HSI is committed to combatting increasingly dangerous trans-border smuggling activities and preventing those responsible from using this technique as a profitable investment.”
“This case is a strong reminder of the vulnerabilities that exist along the Southwest border,” said Hunter Davis, Director of Air Operations for Customs and Border Protection, Air and Marine Operations, “Drug trafficking organizations continue to jeopardize our National Security in exchange for profit.”
“We know that drug trafficking organizations are using any and all means to get their contraband across the US/Mexican Border,” said DEA San Diego Special Agent in Charge William R. Sherman. “Historically, seizures from drug tunnels have been marijuana and small amounts of cocaine. A 2,000 pound cocaine seizure tells DEA and our law enforcement partners that these groups are having to resort to unsophisticated tunnels to try and push through what amounts to a $22 million loss just in cocaine alone. This loss is a devastating blow even to an established drug trafficking organization.”
“Because of the collaboration of the agencies involved in this investigation, a serious blow was dealt to the criminal organization responsible for this threat,” said Chief Patrol Agent Richard A. Barlow, U.S. Border Patrol, San Diego Sector. “I applaud the men and women who worked tirelessly to stop the flow of dangerous narcotics through this tunnel and thank them for their continued efforts to protect the citizens we serve.”
The tunnel dismantled in Otay Mesa is the 13th large-scale operational drug smuggling tunnel discovered along the California border since 2006. In the last five years, federal authorities have detected more than 75 cross-border smuggling tunnels, most of them in California and Arizona.
DEFENDANTS Case Number 16MJ1118
Martiniano Garcia-Sedano
Cruz Armando Parra Corrales
Alejandro Bravo
CHARGES
Conspiracy to Import Cocaine and Marijuana, in violation of Title 21, United States Code, Sections 952, 960 and 963
Penalties: Ten year mandatory minimum, up to life in Prison, $10 Million fine
Conspiracy to Use a Border Tunnel, in violation of Title 18, United States Code, Section 555(d)
Maximum Penalty 20 years in prison, $250,000 fine.
DEFENDANTS Case Number 16MJ1119
Juan Carlos Chavez Fabian
Alejandro Gomez-Baez
Osmel Martinez
CHARGES
Conspiracy to Distribute Cocaine and Marijuana, in violation of Title 21, United States Code, Section 841(a) and 846
Penalties: Ten year mandatory minimum, up to life in Prison, $10 million fine
AGENCIES
U.S. Immigration and Customs Enforcement Homeland Security Investigations
U.S. Border Patrol
Drug Enforcement Administration
Customs and Border Protection, Office of Air and Marine
Customs and Border Protection, Office of Field Operations
Internal Revenue Service
San Diego County Sheriff’s Department
San Diego Police Department
California Highway Patrol
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
For visuals, please refer to link below
https://www.justice.gov/usao-sdca/gallery/otay-mesa-tunnel
Hundreds of Counterfeit Oxycodone Tablets Seized at Port of Entry Contained Ultra-Deadly FentanylRead the Press Release
Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – April 14, 2016
SAN DIEGO – A suspected smuggler’s recent attempt to bring hundreds of counterfeit oxycodone pills through the Otay Mesa Port of Entry has raised serious concerns among law enforcement officials here because the pills turned out to be ultra-deadly fentanyl.
In Sacramento, California, there have been dozens of overdoses and at least 11 deaths in which individuals believed they were consuming the prescription painkiller Norco, which contains hydrocodone and acetaminophen. Instead these counterfeit tablets contained fentanyl. The Sacramento County Department of Health and Human Services has urged individuals to refrain from taking prescription-type pills that are not prescribed and obtained from one’s own doctor.
The seizure is believed to be the first time that federal officials along the California-Mexico border have intercepted counterfeit oxycodone tablets containing fentanyl as they were being smuggled from Mexico into the United States.
In federal court in San Diego today, defendant Sergio Linyuntang Mendoza Bohon of Tijuana, Mexico, was arraigned on a charge that he unlawfully imported a controlled substance. According to a charging document, Bohon attempted to smuggle 1,183 tablets of fentanyl that were labeled as oxycodone, and 5.4 grams of powdered fentanyl.
According to court records, on February 10, 2016, defendant Mendoza Bohon entered the United States at the Otay Mesa Port of Entry as a pedestrian. During the primary inspection, a Customs and Border Patrol Officer observed an unnatural looking bulge on the defendant and he was referred to secondary inspection, where Customs and Border Protection officers found the tablets labeled as oxycodone concealed in his underwear.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Special Agents responded to the Port of Entry. During his post-arrest statement, defendant Bohon admitted that he knew that the tablets were “oxy” [oxycodone] and that he was attempting to smuggle the oxycodone into the United States. However, the Drug Enforcement Administration Laboratory confirmed that the pills contained fentanyl and not oxycodone.
“Unsuspecting individuals who illegally purchase oxycodone could potentially die from the ingestion of what turns out to be fentanyl tablets,” said U.S. Attorney Laura Duffy. “We are very concerned that these counterfeit pills could cause serious harm to users. Even miniscule amounts of fentanyl can have devastating consequences for those who abuse it or literally even touch it.”
Last year, the Drug Enforcement Administration released a nationwide public health alert on Fentanyl, a Schedule II synthetic opioid painkiller. Fentanyl and Fentanyl analogues produced in clandestine laboratories can be 100 times more potent than morphine. Exposure to even a trace amount of Fentanyl through inhalation or absorption through the skin.
Fentanyl is anywhere from 25 to 50 times more potent than heroin. The drug and its analogues are being produced to a large extent in China. DEA investigations reveal that the Mexican drug cartels, including Sinaloa, are purchasing fentanyl directly from China and producing fentanyl from precursors sourced from China.
In some parts of the country, heroin is being spiked with fentanyl or being replaced by fentanyl. There are a number of reasons why, but it mainly comes down to economics. Fentanyl generates greater profits than heroin.
“DEA will continue to investigate the manufacturers, smugglers and distributors of fraudulent prescription pills,” said DEA San Diego Special Agent in Charge William R. Sherman. “These criminals are putting fentanyl into fake pills and passing them off as legitimate prescription medications. Fentanyl is extremely powerful and can very easily lead to overdose deaths. This just goes to show the lengths to which criminals will go to make an easy buck.”
“This investigation involves the first interdiction of counterfeit oxycodone pills containing fentanyl that were smuggled from Mexico into the U.S. at the local ports of entry,” said Dave Shaw, special agent in charge for HSI San Diego. “While this time we’ve successfully prevented a potentially deadly drug from reaching the streets, we face an uphill battle stemming from the rapidly growing demand for pharmaceutical painkillers on the black market. HSI is committed to working with our law enforcement partners, both here and abroad, to identify and dismantle transnational criminal networks seeking to profit from the production and distribution of deadly counterfeit drugs.”
This case is being investigated by the San Diego Pharmaceutical Task Force, a group formed in 2012. Members include agents from DEA, HSI, the California Department of Justice, Bureau of Investigation, the San Diego Sheriff’s Department, and the United States Attorney’s Office.
Bohon’s next court appearance is on May 2, 2016, before the U.S. District Judge Marilyn L. Huff for a motion hearing.
DEFENDANT Case Number 16CR0453
Sergio Linyuntang Medonza Bohon Age 19 Tijuana, Mexico
CHARGE
Importation of Controlled Substance, in violation of Title 21, United States Code, Section 952 and 960. Maximum Penalties: 20 years in custody; 3 years of supervised release; $250,000 fine; $100 Special Assessment.
INVESTIGATING AGENCIES
Customs and Border Protection (CBP)
San Diego Pharmaceutical Task Force
Immigration and Customs Enforcement’s Homeland Security Investigations
Drug Enforcement Administration
California Department of Justice, Bureau of Investigation
San Diego Sheriff’s Department.
*The charges and allegations contained in an indictment, information, or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Sheriff’s Department Employee Evades Taxes on Money Earned Selling Dangerous Diet DrugsRead the Press Release
Assistant U.S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – April 14, 2016
SAN DIEGO – Former San Diego Sheriff’s Department employee Francisco Terriquez pleaded guilty today to tax evasion and making a false statement to a federal officer, admitting that he ran a business selling millions of dollars of dietary supplements and failed to declare any of the proceeds as income on his federal tax return.
Terriquez, a 19-year veteran of the Sheriff’s Department, spent tens of thousands of dollars shipping the dietary supplements to stores and customers throughout the United States. Terriquez operated his business out of several storage units, which he rented under a fake name. After obtaining a search warrant, federal agents searched Terriquez’s storage units and discovered hundreds of vials of dietary supplements containing the controlled substance sibutramine.
According to the Food and Drug Administration, sibutramine is an obesity drug that was withdrawn from the U.S. market in October 2010 due to studies showing an increased risk of heart attack and stroke among those using the drug. Terriquez never notified his customers that the dietary supplements he sold contained a dangerous drug.
From 2011-2014, Terriquez failed to report over a half million dollars in income he received from his illegal business. As part of his plea, Terriquez agreed to pay restitution to the Internal Revenue Service for the full amount of taxes owed. Terriquez will appear for sentencing on July 21, 2016 at 9 a.m. before U.S. District Judge Marilyn L. Huff.
“As a member of a law enforcement agency for decades, this defendant knew better,” said U.S. Attorney Laura Duffy. “He acted as if the rules did not apply to him, and now he is finding out otherwise.”
“As a former employee of a law enforcement agency, Mr. Terriquez is held to a higher standard and knew that he was operating an illegal business,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today's plea will hold Mr. Terriquez accountable for his unlawful conduct and serve as a reminder that when purchasing dietary supplements through the internet, ask questions and conduct your own due diligence before purchasing from unknown individuals and/or companies.”
DEFENDANT: Case Number 15-CR-2298-H
Francisco Terriquez Age: 43 Chula Vista, CA
SUMMARY OF CHARGES
Tax Evasion – Title 26, U.S.C., Section 7201
Maximum penalty: 5 years’ imprisonment and $250,000 fine
False Statement – Title 18, U.S.C., Section 1001
Maximum penalty: 5 years’ imprisonment and $250,000 fine
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigation
U.S. Attorney Laura Duffy and Local Law Enforcement Leaders Join Nationwide Effort to Confront Backlash Against Muslims in Wake of Terrorist AttacksRead the Press Release
Media Relations Director Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – April 13, 2016
SAN DIEGO – Four men in a pickup truck pulled alongside a pedestrian on Winter Gardens Boulevard in Lakeside and shouted at him. They called him “ISIS supporter” and “terrorist supporter” and told him to “Go back to Iraq!” Then at least one of the men in the truck opened the passenger door and went after their target, who was thrown to the ground, beaten and kicked.
Somehow he managed to stumble to get help, but by then he had suffered major damage. Emergency room doctors at Grossmont Hospital found that the bones holding his right eye in place were shattered, the muscle under the right eye had sunk, and there were bone fragments lodged in his optical nerve, impairing his vision.
This happened in December, about two weeks after the terrorist attack in San Bernardino. While the San Diego County Sheriff’s Department attempted to follow up with the victim and tried to locate witnesses, unfortunately the attackers could not be identified.
During the last several months, Muslims – or those perceived to be Muslim – have been targeted around the country in the aftermath of the tragic terrorist attacks in Brussels, Paris and San Bernardino.
As a result, United States Attorneys from California, Colorado, Connecticut, Idaho, Ohio, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey and Utah will work with community leaders and law enforcement from April 13 to 20 at special events to address discrimination, violence, and harassment targeting people because of what they look like, which country they come from, or where they worship. The aim is to protect civil rights and prevent hate crimes.
The 13 events in 11 districts will build on both the Justice Department’s prosecutorial work in countering post-September 11th backlash, as well as its outreach efforts, including the new interagency initiative to combat religious discrimination throughout the country.
“All too often in the aftermath of acts of terrorism, Muslim Americans – and those perceived to be Muslim – have suffered a backlash of unthinkable violence and discrimination,” said U.S. Attorney Laura Duffy, co-chair of the Attorney General’s Advisory Committee Civil Rights Subcommittee. “These acts of retaliation violate the letter and the spirit of our Constitution, our laws, and the ideals upon which our nation was founded. The Department of Justice is committed to working with communities of all faiths to protect and ensure the civil rights of all faiths.”
In San Diego, U.S. Attorney Laura Duffy will be joined by District Attorney Bonnie Dumanis, Sheriff Bill Gore, San Diego Police Chief Shelley Zimmerman, Coronado Police Chief Jon Froomin and Chula Vista Police Chief David Bejarano for an event today at 4:30 p.m. at San Diego State University’s Center for Intercultural Relations, located in the Conrad Prebys Aztec Student Union at 6075 Aztec Circle Drive on the SDSU campus. A female Muslim student was assaulted on campus in November, when an unknown male, believed to be an SDSU student, pushed her and pulled her by her hijab while making hate comments and threats based on her religious appearance.
Today’s event coincides with “Islam Awareness Week,” April 13 to 19, sponsored by SDSU’s Muslim Student Association. Please see attached flyer for more information.
“San Diego has not been spared by this disturbing trend,” U.S. Attorney Duffy noted. “It is particularly troubling that these incidents are often directed at Muslim women because their use of a headscarf or hijab targets them for hateful insults and physical abuse. In fact, many Muslim women feel so unsafe that workshops have sprung up throughout the country to train them in self-defense techniques. I am gratified that my law enforcement colleagues, both here in San Diego and around the nation, are taking a stand against the wave of ignorant hatred that has caused so many law abiding members of our Muslim community to fear for their safety.”
“The San Diego District Attorney's Office continues to aggressively prosecute all hate crimes occurring within our county,” said District Attorney Bonnie Dumanis. “We condemn all hate crimes, including the apparent recent spike in hate crimes targeting those victims perceived to be Muslim. We will continue to work closely with both the Muslim community and our law enforcement partners to apprehend and hold accountable any who criminally violate the civil liberties of our citizens.”
“This country was founded on priceless freedoms,” said Sheriff Bill Gore. “The Bill of Rights set forth these freedoms that we enjoy - freedom of religion, freedom of speech, freedom of assembly, and freedom of the press are a few. As public safety officers, it is our duty to ensure everyone enjoys the same rights – regardless of their faith, gender, or nationality. There are no exceptions to the first ten amendments to the U. S. Constitution.”
“Public safety is a shared responsibility between our police department and our community,” said San Diego Police Chief Shelley Zimmerman. “Our community policing philosophy emphasizes working in partnership with all of our communities who we so proudly serve. The information shared will only help to enhance our efforts to keep San Diego one of the safest big cities in the United States.”
Similar acts of hate have occurred around the country.
A Connecticut man pleaded guilty to firing a high-powered rifle at a mosque; a Florida man pleaded guilty to threatening to firebomb two mosques and shoot their congregants; a former Missouri man pleaded guilty to violating the civil rights of others by leading a conspiracy to deface a local Islamic center with graffiti and burn two copies of the Qur’an; and a New York man was sentenced to 13 months in prison for emailing death threats to the executive director of an Islamic advocacy group.
Places of worship also face discrimination through unlawful barriers to construction in many communities around the country. In the last year, the Justice Department filed suit against Des Plaines, Illinois, over the city’s denial of rezoning to allow a Muslim congregation to use a vacant office building as a mosque. The complaint alleged that the city treated the mosque less favorably than it has treated nonreligious assemblies, discriminated against the mosque based on religion and imposed a substantial burden on the mosque members’ religious exercise without justification. The Justice Department also closed its investigation into Norwalk, Connecticut, after the city made changes to treat religious assemblies equally with nonreligious assemblies in five of its zoning districts. The department had opened an investigation of Norwalk’s zoning practices in 2012 in response to the city’s denial of a special use permit to the Al Madany Islamic Center to build a mosque on land it had bought in a residential zoning district.
Backlash against Muslim, Arab, Sikh and South Asian Americans can have a particularly harmful impact on education, employment and housing. In March, the Civil Rights Division announced that the Educational Opportunities Section launched a new enforcement initiative with the U.S. Attorneys’ Offices to strengthen our efforts to combat religious discrimination in schools and other educational settings. The new intiative, together with Justice Department’s recent work in Bakersfield, California; Lewisville, Texas; Pine Bush, New York; Dearborn Heights, Michigan; DeKalb County, Georgia; and many more cities and counties through the nation, will help ensure that schools remain free from discrimination, harassment and violence for all students.
This effort is a reflection of the Department of Justice’s long-standing commitment to working to protect Muslim, Sikh, Arab and South Asian Americans from threats and violence directed at them because of their religion or ethnicity, and to prevent acts of discrimination against them in the workplace, schools or elsewhere. Since September 11th, the Department of Justice has investigated over 1,000 incidents involving acts of violence, threats, assaults, vandalism and arson targeting Arab, Muslim, Sikh and South Asians, and those perceived to be members of these groups. The Civil Rights Division and U.S Attorneys’ offices have brought prosecutions against more than 60 defendants in such cases, with 57 convictions to date.
Ohio Seminary Student Pleads Guilty, Admits Seeking Sex with Infants in TijuanaRead the Press Release
Assistant U. S. Attorney Alessandra Serano (619) 546-8104
NEWS RELEASE SUMMARY – April 13, 2016
SAN DIEGO – Joel Alexander Wright, a former seminary student from Ohio, pleaded guilty in federal court today, admitting that he attempted to adopt or purchase female infants and toddlers in Tijuana in order to sexually molest them.
In his plea agreement, Wright admitted that he was the author of numerous sexually explicit emails in which he describes to a cooperating witness and an undercover federal agent how he intended to sexually assault various children in Mexico, from infants up to 4 years old.
Wright admitted the following in his plea agreement:
Beginning in November of 2015, he placed ads on Craigslist Tijuana purporting to seek a female tour guide. When he received a response from a cooperating witness, he confided that he wanted to “adopt/own a baby girl (under the age of 3) and I want to have intercourse with her after I own her but don’t be telling people that…I won’t pay until I have seen the baby and I will pay the parents then…the cheapest baby under 3 would be good.”
In another email with an undercover federal agent, Wright admitted that he wrote he had “picked up an infant pain relief med and a pretty outfit which I think should fit the 1 or 2 year old.” He emailed that he “will try to find some lube here at the store that we can use.” He also wrote that he had purchased an American Airlines ticket to travel from Ohio to San Diego on January 29, 2016, arriving at 11:30 a.m.
On January 29, Wright deplaned at San Diego International Airport and called a number to the undercover agent stating that he had landed. Wright had two cell phones and a duffle bag. Inside the bag agents found baby clothes, sleep aids, bottles, toys, candy and lubricant.
Wright was arrested at the airport and has remained in custody since. He is scheduled to be sentenced on July 1, 2016 at 9 a.m. before U.S. District Judge Dana M. Sabraw.
“There are no words to describe the horror that might have happened, had this man carried out what he intended to do - sexually exploit and assault innocent toddlers and infants,” said U.S. Attorney Laura Duffy. “There is nothing more important on my agenda than keeping children safe from individuals who have a sexual interest in children both here in the United States and abroad from individuals who travel from the U.S. with that nefarious intent.”
“I commend our cybercrimes special agents whose tireless work during an exhaustive investigation has prevented further exploitation of innocent children by a significantly heinous, unspeakable form of child sexual predator activity,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI is committed to working closely with our law enforcement partners both here and abroad to protect children from becoming victims of child sex predators.”
DEFENDANT Case Number: 16CR0354-DMS
Joel Alexander Wright Age: 23
SUMMARY OF CHARGE
Attempted Enticement of a Minor, in violation of Title 18, U.S. code Sec. 2422(b).
Maximum Penalty: Life in prison, with minimum mandatory 10-year sentence, maximum $250,000 fine, lifetime registration as a sex offender
AGENCY
Man Sentenced to 15 Years in Prison for Producing Sexually Explicit Photos of 11-Year-Old BoyRead the Press Release
Assistant U. S. Attorney Alexandra Foster (619) 546-6735
NEWS RELEASE SUMMARY – April 8, 2016
SAN DIEGO – James Murphy, a retiree living in San Diego, was sentenced today to 15 years in prison for taking sexually explicit photographs of an 11-year-old boy at a Tijuana orphanage.
According to the plea agreement, Murphy, 63, traveled to Tijuana, Mexico from San Diego on November 19, 2015, supposedly to participate in humanitarian work at an orphanage in Mexico. While there, he took sexually explicit pictures of the boy and shared pornographic photos with him. These encounters occurred inside a motor home, which Murphy used as his sleeping quarters while staying at the orphanage in Mexico.
During the sentencing hearing, U.S. District Judge Cathy Ann Bencivengo admonished the defendant for stealing a child’s innocence - which he will never be able to regain. She added her concern that the defendant was preying on children for his own sexual satisfaction.
“For at least the next 15 years, children will be safe from the clutches of this predator,” said U.S. Attorney Laura Duffy. “We will do everything possible to protect vulnerable children wherever they may be.”
“Justice was served today as a serial child predator was sentenced to 15 years in federal prison,” said Dave Shaw, special agent in charge for HSI San Diego. “While we are satisfied and relieved with this sentencing, we will not forget the young victims now left with permanent emotional and physical scars. HSI will continue its tireless work with our law enforcement partners around the world to seek out and bring justice to those who mercilessly exploit children.”
DEFENDANT Case Number: 15CR3175-JM
James Murphy Age: 63
SUMMARY OF CHARGES
Count One
Use of a Child to Produce a Sexually Explicit Visual Depiction, in violation of Title 18, U.S. code Sec. 2251(c)(1).
AGENCY
Immigration and Customs Enforcement’s Homeland Security Investigations
Indonesian Domestic Worker Rescued from Forced LaborRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – April 8, 2016
SAN DIEGO –Firas Majeed and Shatha Abbas were arrested today and charged with forcing an Indonesian woman to work in their El Cajon home for up to 18 hours a day without pay. The victim was rescued from the home after providing a note to a visiting nurse, asking for help.
Majeed and Abbas were arraigned today on a criminal complaint before U.S. Magistrate Judge Karen S. Crawford. They were charged with Forced Labor, Trafficking with Respect to Forced Labor, and Document Servitude. The charges include allegations that Majeed and Abbas benefitted through a scheme intended to cause the victim to believe that she would suffer physical restraint if she did not perform labor and services. Majeed and Abbas are also alleged to have concealed the victim’s passport in order to prevent and restrict her liberty to move and travel, and to maintain her labor and services.
The victim reported that she was previously held at a home belonging to relatives of Abbas in Dubai, United Arab Emirates. In Dubai, the victim was allegedly required to provide domestic services for 20 hours a day, every day, for five years. The victim was not paid a salary, and was directed to travel to the United States and work at the home of Majeed and Abbas.
The complaint further alleges that the victim traveled to El Cajon with Majeed in November 2015, and thereafter was required to provide domestic services, including cleaning and laundry, for the entire household, for 16-18 hours every day of the week. The victim reported that she received no days off and was not paid for her services. The victim also reported that she speaks no English, had no money, and was not allowed to leave, except to throw away the family’s trash.
The victim was removed from the residence of Majeed and Abbas on March 22, 2016, by agents from Immigration and Customs Enforcement’s Homeland Security Investigations. Healthcare workers reported to the national Human Trafficking Resource Center that the victim was seen in the back of the residence and closely monitored. Agents translated the note requesting help that the victim had provided to a visiting nurse, which prompted her rescue.
Victims of labor trafficking are often overwhelmed by fear, and they fail to report crimes against them. Frequently victims are unfamiliar with U.S. culture. They may be unaware of their rights or may have been intentionally misinformed about rights in this country. Many don’t speak English, and are unable to communicate with service providers, police, or others who might be able to help them.
They many times don’t self-identify as victims and often blame themselves for predicaments. Many are not legally in the U.S. and they have a fear of being arrested or deported. And, even though an unfortunate number of victims have been beaten and/or raped, they feel their current situation may still be better than where they came from. They may be afraid that speaking out may result in harm to families in their home countries, who are often threatened by traffickers. For all those reasons, these cases are tremendously difficult to investigate and prosecute.
U.S. Attorney Laura Duffy praised the victim for having the courage to seek help, and the healthcare workers who responded to her note.
“Human trafficking is a deplorable practice that amounts to modern slavery, and many of these victims are hiding in plain sight,” Duffy said. “Bringing human traffickers to justice and assisting trafficking survivors is one my top priorities. We all need to work together to recognize the signs and put a stop to this devastating crime.”
“Today’s arrests bring to light the sad reality of modern day slavery,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI will not tolerate any form of human exploitation. Forced labor, which often involves individuals who are held in isolation, degraded, and most alarming – stripped of their basic human freedom, has no place in a modern society.”
Majeed and Abbas are scheduled for a preliminary examination before U.S. Magistrate Judge Jan M. Adler on April 21, 2016.
DEFENDANTS Case Number: 16MJ1016
Firas Majeed (aka Firas Ghazi Majeed Al Tameemi) Age: 44
Shatha Abbas (aka Shatha Yehia Abbas Hussain) Age: 38
SUMMARY OF CHARGES
Title 18, United States Code, Section 1589 (Forced Labor)
Maximum penalty: 20 years of custody; $250,000 Fine
Title 18, United States Code, Section 1590 (Trafficking with Respect to Forced Labor)
Maximum penalty: 20 years of custody; $250,000 Fine
Title 18, United States Code, Section 1592 (Document Servitude)
Maximum penalty: 5 years of custody; $250,000 Fine
AGENCY
Homeland Security Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and defendants are considered innocent unless and until proven guilty.
Six Defendants Indicted in Tunnel and Drug SeizuresRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – April 7, 2015
SAN DIEGO – Six people – including two new defendants arrested in Arizona and San Bernardino County, California - were indicted today by a federal grand jury in San Diego in connection with the drug tunnel that was seized last month in Calexico, California.
The new defendants are Bertha Lidia Esquivel, aka Bertha Inzunza, of Rialto, California, and Kenneth Wayne Olmos, Jr., of Tucson, Arizona.
Also charged in the indictment with multiple federal offenses were Agustin Enriquez Cruz, aka Tinky, of Tucson, Arizona; Eva Medina De Duarte, aka Eva Duarte-Medina, aka Eva Duarte de Medina, of Tucson, Arizona; Joel Duarte-Medina of Mexico; and Manuel Gallegos-Jimenez, aka Jorge Alberto Torango, of Mexico. Eva Medina De Duarte is the grandmother of Agustin Cruz and the mother of Joel Duarte-Medina.
The defendants were previously charged via complaint; the grand jury indictment charges them with additional crimes. They are now charged with some or all of the following drug and tunnel related crimes: Conspiracy to distribute marijuana, possession of marijuana with intent to distribute, conspiracy to import marijuana, importation of marijuana, construction and financing a tunnel that crosses the border, use of a tunnel that crosses the border, conspiracy to use and maintain drug related premises, use and maintaining drug related premises, and criminal forfeiture.
All defendants are in federal custody.
Federal officials seized a cross-border tunnel on March 23, 2016 following a lengthy investigation that resulted in multiple arrests and the confiscation of more than a ton of marijuana. The tunnel, approximately 415 yards in length, stretches from El Sarape Restaurant in Mexicali, Mexico to a two-bedroom, two-bath house, located at 902 E. Third Street in Calexico, California, about 300 yards north of the international border. In the front room of the residence, agents found a hole in the floor covered with tile leading to a shaft descending underground.
On the day the tunnel was discovered, defendants Joel Duarte Medina and Manuel Gallegos Jimenez were arrested in Calexico. They were arraigned today on the indictment in El Centro, California, by United States Magistrate Judge Peter Lewis.
Augustin Enrique Cruz, the owner of the house in Calexico where the tunnel exit was discovered, and his grandmother, Eva Medina De Duarte, were arrested in Tucson, Arizona, the day after the tunnel discovery. They will appear before U.S. Magistrate Judge Karen Crawford, in San Diego, California, tomorrow at 2 p.m. for arraignment on the indictment.
Defendant Bertha Lidia Esquivel, who was arrested in Rialto, on March 24, appeared today in San Diego for a detention hearing; her matter was continued to Tuesday, April 12, before U.S. Magistrate Judge Jan Adler. Defendant Kenneth Wayne Olmos, Jr., was arrested in Arizona on March 25 and is pending removal and transfer to San Diego, California, for arraignment.
DEFENDANTS
Agustin Cruz, age 23, of Tucson, Arizona
Eva Medina De Duarte, age 74, of Tucson, Arizona
Joel Duarte-Medina, age 43, of Mexico
Manuel Gallegos-Jimenez, age 49, of Mexico
Bertha Lidia Esquivel, age 52, of Rialto, California
Kenneth Wayne Olmos Jr., age 33, of Tucson, Arizona
CHARGES
Count 1
Conspiracy To Distribute over 1,000 kilograms of marijuana 21 U.S.C 841 and 846
Maximum penalties:
10 year MM/life; 5 years of SR; $1,000,000 fine, $100 SA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 2
Possession With Intent To Distribute 100 kilograms of marijuana 21 U.S.C. 841 and 18 U.S.C. 2
Maximum penalties: 5 year MM/40; 5 years of SR; $500,000 fine, $100 SA
MARCH 7, 2016 SEIZURE OF 1,389 POUNDS OF MARIJUANA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 3
Possession With Intent To Distribute 100 kilograms of marijuana 21 U.S.C. 841 and 18 U.S.C. 2
Maximum penalties 5 year MM/40; 5 years of SR; $500,000 fine, $100 SA
MARCH 23, 2016 SEIZURE OF 1,532 POUNDS OF MARIJUANA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 4
Conspiracy To Import over 1,000 kilograms of marijuana
21 U.S.C 960, 952, 963
Maximum Penalties: 10 year MM/life; 5 years of SR; $1,000,000 fine, $100 SA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 5
Importation of 100 kilograms of marijuana
21 U.S.C. 952, 960 and 18 U.S.C. 2
Maximum Penalties: 5 year MM/40; 5 years of SR; $500,000 fine, $100 SA
MARCH 7, 2016 SEIZURE OF 1,389 POUNDS OF MARIJUANA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 6
Importation of 100 kilograms of marijuana
Aiding & Abetting/Pinkerton Liability
21 U.S.C. 952, 960 and 18 U.S.C. 2
Maximum Penalties: year MM/40; 5 years of SR; $500,000 fine, $100 SA
MARCH 23, 2016 SEIZURE OF 1,532 POUNDS OF MARIJUANA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Count 7
Conspiracy to Construct and Finance of Tunnel
18 U.S.C. 555(a) and (d)
Maximum Penalties: 20 years; 3 years of SR; $250,000 fine, $100 SA
Agustin Cruz
Count 8
Using Narcotics Tunnel 18 U.S.C. 555(c)
Maximum Penalties: 20 years; 3 years of SR; $250,000 fine, $100 SA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Count 9
Conspiracy to Maintain/Use Drug-Related Premises
21 U.S.C. 856(a)(1) and 846
Maximum Penalties: 20 years; 3 years of SR; $250,000 fine, $100 SA
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 10
Maintain/Use Drug-Related Premises
21 U.S.C. 856 and 18 U.S.C. 2
Maximum Penalties: 20 years; 3 years of SR; $250,000 fine, $100 SA
Third Street Residence in Calexico
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Count 11
Maintain /Use Drug Related Premises
21 U.S.C. 856 and 18 U.S.C. 2
Maximum Penalties: 20 years; 3 years of SR; $250,000 fine, $100 SA
Horizon Residence in Calexico
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
Count 12
Maintain/Use Drug Related Premises
21 U.S.C. 856 and 18 U.S.C. 2
Maximum Penalties: 20 years; 3 years of SR; $250,000 fine, $100 SA
Avenida Warehouse in Calexico
Agustin Cruz
Eva Medina De Duarte
Joel Duarte-Medina
Manuel Gallegos-Jimenez
Bertha Lidia Esquivel
Kenneth Wayne Olmos Jr.
AGENCIES
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
Homeland Security Investigations, Calexico
U.S. Border Patrol, El Centro Sector
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
SeaWorld Manager Accused of Embezzling $750,000Read the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – April 4, 2016
SAN DIEGO – Former SeaWorld San Diego manager Wilfred David Joseph Jobin-Reyes (known as “Sebastian Jobin”) was arraigned today in San Diego on wire fraud charges relating to an elaborate eight-year embezzlement scheme he orchestrated while working as a Show Producer at the marine mammal park.
Jobin-Reyes is charged with stealing more than $750,000 from SeaWorld by creating fake invoices from a fictitious company, then using his management position to approve their payment. He diverted the money to bank accounts he secretly controlled, and then withdrew cash or spent the proceeds on restaurants, plane tickets, hotels, and shopping.
As alleged in the complaint and other court documents unsealed today, Jobin-Reyes created a fake merchandise company, “SJ Merchandise,” which he registered with the Secretary of State but didn’t use to conduct any real business. He adopted the fictitious alias “John Caldwell” to communicate with SeaWorld, in order to conceal his ownership and control of the company. After uncovering the fraud, SeaWorld investigators discovered that Jobin-Reyes had used his work computer to create more than 100 fake invoices for goods that were never actually delivered to SeaWorld, including “wildlife animal bookmarks,” “sea creature rings,” “purple shiny ornaments,” and “poinsettia in pots.” Many of the invoices Jobin-Reyes created were for amounts just under the $10,000 threshold that resulted in limited review by his managers. SeaWorld unwittingly paid Jobin-Reyes more than $750,000 before discovering the fraud in early 2015.
“We are dedicated to protecting our local businesses and institutions from corruption inside and out,” said U.S. Attorney Laura E. Duffy. “We will root out and prosecute business insiders who abuse the trust of their employers and the community.”
U.S. Secret Service Special Agent in Charge David Murray said, “Today’s arraignment demonstrates that the U.S. Secret Service is dedicated to protecting our local communities and businesses against these types of fraudulent financial schemes, and will continue to collaborate with its law enforcement partners to target and arrest individuals who use U.S. financial institutions as part of their criminal activity.”
“IRS-Criminal Investigation is committed to working with our law enforcement partners to lend our financial expertise to trace the money, whatever the source, including embezzlement funds,” said IRS-CI Acting Special Agent in Charge Anthony J. Orlando. “We will protect American businesses and institutions from insiders who abuse positions of trust to commit this type of financial fraud.”
Jobin-Reyes was arrested in Dallas, Texas on March 12, 2016, and made his initial appearance there. On March 15, 2016, U.S. Magistrate Judge Paul D. Stickney of the Northern District of Texas found that Jobin-Reyes posed a serious risk of flight, and ordered him detained pending trial. He was brought to San Diego for his initial appearance in this district today. Jobin-Reyes’s next court appearance is for a detention hearing on Thursday, April 7 at 10:00 a.m. before U.S. Magistrate Judge Bernard G. Skomal.
DEFENDANT:
Wilfred David Joseph Jobin-Reyes Age: 47 San Diego, CA
CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
United States Secret Service
Internal Revenue Service Criminal Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Former Carlsbad Resident Jailed for Sale of Unapproved “Energy Wave” Medical DevicesRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – April 4, 2016
SAN DIEGO – Former Carlsbad resident David Perez was sentenced in federal court today to 30 months in custody for selling unapproved “Energy Wave” medical devices over the internet and mailing them to customers throughout the United States.
According to admissions in his plea agreement, Perez marketed the “Energy Wave” device using the website www.myenergywave.com. The Energy Wave device consists of a micro-current frequency generator with a digital readout, two stainless steel cylinders, two personal application plates with connectors and lead wire for the cylinders and plates. Users were provided with an operating manual and a list of Auto Codes that set forth over 450 digital settings for the device, directed to treat specific conditions from abdominal pain, AIDS and diabetes to stroke, ulcer and worms. The Auto Codes and Manuel advised users to connect the cylinders or plates to the machine, and touch them to the body for a recommended run time to treat each condition.
David Perez admitted selling each device for approximately $1,200-$1,500, and receiving gross proceeds of approximately $271,000. He also acknowledged that he intended to defraud and mislead the Food and Drug Administration by attempting to evade the agency’s oversight of medical claims made regarding the Energy Wave device by maintaining a separate website (rifecodes.com) to which he referred customers who needed to obtain the auto codes that allegedly were used to treat the various medical conditions. Perez admitted that he knew or should have known a number of his customers were vulnerable because they had purchased the device in an attempt to cure cancer, and that they were marketing the device without the proper FDA approvals.
“It’s unconscionable to sell useless medical devices to critically ill people who are hoping for a miracle,” said U.S. Attorney Laura Duffy. “This sentence reflects the serious nature of this crime, and our commitment to protecting those who are most vulnerable to being preyed upon by heartless predators.”
“This investigation uncovered a serious public health threat and should serve as a warning to those who put consumers at risk for their own financial gain,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI agents will continue to work with our law enforcement partners, both here and abroad, to investigate medical-related fraud over the Internet, especially when it involves an online marketing scam, such as this case in which unregulated medical devices were sold under false pretense.”
“The U.S. Postal Inspection Service will continue to work with our partners in law enforcement to ensure that the U.S. Postal Service isn't used as a conduit for those criminals who seek to perpetrate medical quackery upon the American consumer,” said Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service - Los Angeles Division. “This type of crime takes advantage of the most vulnerable segment of the population to include the elderly and terminally ill. The protection of our citizens remains the cornerstone of our mission.”
“Consumers rely on the FDA to ensure that the medical products they use, including medical devices, actually treat the diseases or conditions they claim to. When criminals sell misbranded devices not cleared by the FDA, they put users’ health at risk,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. “We will continue to devote our resources to removing such threats to the public’s health from the U.S. marketplace.”
DEFENDANT Criminal Case No. 15cr0360-BEN
David Perez Age: 60 Medford, Oregon
SUMMARY OF CHARGES
Conspiracy– Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Immigration and Customs Enforcement’s Homeland Security Investigations
Postal Inspection Service
Food and Drug Administration, Office of Criminal Investigations
Suspected Smuggler Slams into Semi-Truck, Two Undocumented Immigrants KilledRead the Press Release
Assistant U. S. Attorney Lara A. Stingley (619) 546-8403 or Assistant U.S. Attorney Brandon J. Kimura (619) 546-9614
NEWS RELEASE SUMMARY – March 29, 2016
EL CENTRO – A suspected alien smuggler who said she “panicked” and hit the accelerator when U.S. Border Patrol agents attempted to pull her over has been arrested and charged in connection with a subsequent crash that killed two of her customers, left another brain dead, and another paralyzed.
Lydiana Castro, a United States citizen, was arrested after the crash on March 23, 2016 near Andrade, California, and charged with illegally transporting aliens. In federal court in El Centro today, she elected to forgo a detention hearing and remain in custody.
According to a federal complaint, a Border Patrol agent saw several people running to a Dodge Durango at a gas station at the intersection of Sidewinder Road and Interstate 8 in Andrade, California. The agent alerted colleagues via radio.
When another Border Patrol agent in a marked vehicle saw the Durango, he activated his lights and attempted to stop the vehicle, which was being driven by Castro. At first the Durango began to slow down and pull over, but suddenly the vehicle accelerated and reached a high rate of speed. Castro lost control of the Durango and crashed into a semi-truck that was traveling westbound on Interstate 8. The Durango became entangled in the semi-truck trailer’s frame and the truck driver pulled onto the shoulder.
Border Patrol agents found five undocumented Mexican nationals in the Durango. Two men, Gustavo Sanchez-Orta and Jose Magdiel May-Gonzalez, were pronounced dead at the scene of the crash. Castro was taken to a hospital in Yuma, Arizona. The three men had more extensive injuries and had to be transported to a hospital in Phoenix, Arizona. They were identified as Miguel Angel May-Us, Rogelio Dzul-Castro and Javier Sanchez-Gonzalez.
According to the complaint, Castro told a Homeland Security Investigations agent that she picked up the undocumented immigrants at the gas station and drove away toward Yuma. The complaint said Castro stated that she panicked when she saw Border Patrol and she “pressed on the gas” and did not know what to do. She said she remembers hitting the semi-truck but not much after that.
In court today, Assistant U.S. Attorney Kyle Martin told U.S. Magistrate Judge Peter Lewis that Dzul-Castro is brain dead and on life support; Sanchez-Gonzalez is paralyzed from the waist down; and May-Us is in and out of consciousness.
A status hearing is scheduled for this Friday, April 1 at 10:00 a.m. before Judge Lewis.
DEFENDANTS Case Number 16MJ8265
Lydiana Castro Age: 30 Calexico, CA
SUMMARY OF CHARGES
Illegal Transportation of Aliens – Title 8, U.S.C., Section 1324(a)(l)(A)(ii)
Maximum penalty: 10 years in prison
AGENCY
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
U.S. Border Patrol
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Smuggler Sentenced to Five Years for Abandoning His Customers in the Otay MountainsRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Alexandra F. Foster (619) 546-6735
NEWS RELEASE SUMMARY – March 25, 2016
SAN DIEGO – Alien smuggler Efrain Delgado-Rosales was sentenced today by U.S. District Judge Cathy A. Bencivengo to five years in prison for smuggling four non-U.S. Citizens into the United States and then leaving three of them behind in the Otay Mountains once across the border into the United States.
Delgado-Rosales collected four Mexican citizens who sought to enter the United States illegally from a stash house in Tijuana. In anticipation of the trip, Delgado-Rosales sold them brown clothing to wear as camouflage so they would be less visible to U.S. Border Patrol agents as they crossed through the mountains into the United States. Once the four men bought the clothes, Delgado-Rosales took them from the stash house and walked them to the U.S.-Mexico border fence.
Delgado-Rosales left the four men for a period of hours on the Mexico side of the border fence. During that time, thieves swooped in and robbed the men of all their cash (thousands of dollars) and some of their cell phones. When Delgado-Rosales returned to resume the crossing into the United States, according to one of the robbed men, Delgado-Rosales was “indifferent” to the robbery. His lack of surprise caused his four charges to suspect that Delgado-Rosales was involved in the robbery.
Once over the border fence and into the U.S., Delgado-Rosales guided the four men into the Otay Mountains. Three of the four men had a hard time maintaining Delgado-Rosales’s pace. Instead of slowing down, Delgado-Rosales left the men behind. He only grudgingly returned to retrieve them after one of the three men called the one man who had kept pace with the Delgado-Rosales and begged him to return with the guide.
After almost a day of hiking through the mountains, Border Patrol was alerted to the men’s whereabouts. Border Patrol agents responded to the location –about one mile north of the U.S.-Mexico border and three miles east of the closest checkpoint at the Otay Mesa Port of Entry- to find Delgado-Rosales and the four men. All five men were arrested for being illegally in the United States. All four men identified Delgado-Rosales as their foot guide and explained that they and their families each promised to pay others $5,000 to get them each into the United States, for a total of $20,000.
The area where these men were arrested is remote and mountainous, far from human habitation and unlikely to have cell phone service. The location of the arrests matters, because Delgado-Rosales was implicated in another smuggling operation in the Otay Mountains, further east in more rugged and desert-like terrain. In the August 2014 event, one of the smuggled men, Jose de Jesus Hernandez-Adono, died. His mummified body was found by Border Patrol and Homeland Security Investigations Agents in late September 2014. A witness was located, who had been smuggled in with Hernandez-Adono. The witness identified Delgado-Rosales as the foot guide. According to the witness, Hernandez-Adono died, and the other three barely survived the trek.
The facts detailed in the August 2014 smuggling event mirror those detailed by the men in this case. As in this case, the men in August 2014 were housed at a stash house in Tijuana while waiting to be smuggled into the United States. Delgado-Rosales required that the men buy and wear drab, brown clothing during the crossing to hide from Borer Patrol. The group again consisted of four men and again Delgado-Rosales had them cross over the Otay Mountains. The smuggling fee was the same, $5,000, and Delgado-Rosales again appeared to lack any concern for the welfare of his charges.
Delgado-Rosales has been apprehended by Border Patrol 24 times dating back to July 19, 1999. Only once was he apprehended alone. Every other time, he was apprehended with at least two and up to 46 other undocumented individuals. Once, on September 14, 2003, he was apprehended in a load house in Los Angeles with 61 other undocumented individuals.
U.S. Attorney Laura Duffy said, “This case serves as an example of the extreme dangers associated with crossing illegally into the United States. Smuggling activities are run by criminal organizations that have little concern over the welfare of their charges. Our office will aggressively prosecute those who smuggle illegal aliens into the United States for financial gain, place those in their company in grave danger and needlessly cause deaths.”
Chief Border Patrol Agent Richard A. Barlow added, “The sentence of Delgado-Rosales sends a stern message to those who use dangerous means to smuggle individuals into this country for profit. I would like to acknowledge the U.S. Attorney’s Office for their efforts in this case.”
DEFENDANT Criminal Case No. 15CR02830-CAB
Efrain Delgado-Rosales 35 years old
SUMMARY OF CHARGE
Count 1: Title 18, United States Code, Section 1324 - Bringing in Illegal Alien for Financial Gain – statutory minimum of five years, statutory maximum of 10 years, a maximum fine of $250,000, a 3-year term of supervised release, and $100 special assessment.
INVESTIGATING AGENCY
Border Patrol - Chula Vista Intelligence Division
Highest-Ranking Navy Official Sentenced to 46 Months in Prison for Accepting Bribes from Foreign Defense Contractor in Massive Bribery and Fraud SchemeRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – March 25, 2016
SAN DIEGO – U.S. Navy Captain Daniel Dusek, the highest-ranking official charged in the massive Navy bribery scandal, was sentenced in federal court today to 46 months in prison for giving classified information to foreign defense contractor Leonard Glenn Francis in exchange for prostitutes, luxury travel and other gifts.
In addition to imposing the prison term, U.S. District Judge Janis L. Sammartino ordered Dusek to pay a $70,000 fine and $30,000 in restitution to the Navy. He was ordered to report to the U.S. Bureau of Prisons on June 15.
Dusek, 49, pleaded guilty in January 2015 to a single count of conspiracy to commit bribery. Dusek admitted that he used his influence as Deputy Director of Operations for the 7th Fleet, headquartered in Yokosuka, Japan, and later as executive officer of the USS Essex and the commanding officer of the USS Bonhomme Richard, to benefit Francis and his company, Singapore-based Glenn Defense Marine Asia, which for decades provided port services to U.S. Navy ships. Dusek admitted that in return, Francis plied him with meals, alcohol, entertainment, gifts, dozens of nights and incidentals at luxury hotels and the services of prostitutes.
Underscoring his importance to the conspiracy, in an email to one of his employees, Francis wrote: “(Dusek) is a golden asset to drive the big decks (aircraft carriers) into our fat revenue GDMA ports.”
During the sentencing hearing, Judge Sammartino told Dusek: “It’s truly unimaginable to the court that someone in your position with the United States Navy would sell out based on what was provided to you – hotel rooms, entertainment and the services of prostitutes.” She noted that Dusek’s actions “potentially jeopardized national security.”
“Captain Dusek’s betrayal is the most distressing because the Navy placed so much trust, power and authority in his hands,” said U.S. Attorney Laura Duffy. “This is a fitting sentence for a man who was so valuable that his conspirators labeled him their ‘Golden Asset.’”
“As a Navy officer, Captain Dusek took an oath to bear true faith and allegiance to the United States. Instead, he chose self-interest, greed and prurience,” said Assistant Attorney General Leslie R. Caldwell. “And when he learned of the investigation, Captain Dusek deleted his email accounts in an attempt to shield his crimes from law enforcement. The Department of Justice is committed to holding public officials responsible when they betray the public trust.”
“This outcome again sends the message that corruption will be vigorously investigated and prosecuted,” said Director James B. Burch of the Department of Defense, Defense Criminal Investigative Service. “This is an unfortunate example of dishonorable Naval officers who recklessly risked the safety of our troops by trading classified information for cash, extravagant gifts and prostitutes. Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed. This investigation should serve as a warning that those who compromise the integrity of the United States will face their day of reckoning. DCIS and our law enforcement partners will pursue these crimes relentlessly.”
“Captain Dusek put greed and personal pleasure above the safety of his shipmates, and, in doing so, violated his sworn oath as a naval officer,” said Naval Criminal Investigative Service Director Andrew Traver. “His sentence today attests to the seriousness of his crimes. NCIS, along with our partners at the Department of Justice, the Defense Criminal Investigative Service, and the Defense Contract Audit Agency have been steadfast in our commitment to fully investigate the actions of all those involved in the GDMA case, and will continue with the same determination as the investigation proceeds.”
Anita Bales, director, of Defense Contract Audit Agency, said, “DCAA is honored to be a partner with DCIS, NCIS, and the Department of Justice in this investigation. Our investigative support auditors did an outstanding job analyzing the evidence. I'm proud of their work and its impact on bringing justice to those who corruptly defraud the government.”
According to Dusek’s plea agreement, he hand-delivered Navy ship schedules to the GDMA office in Japan or emailed them directly to Francis or a GDMA employee on dozens of occasions, each time taking steps to avoid detection by law enforcement or U.S. Navy personnel.
Dusek was so helpful to GDMA that an employee gloated, Dusek is “an official GDMA card holder.” He was lavishly rewarded for his efforts. In one example cited in the plea agreement, GDMA paid for a hotel for Dusek and his family at the Marriott Waikiki in Hawaii on July 19, 2010. A few weeks later, on August 5, 2010, GDMA paid for a hotel room for Dusek at the Shangri-La in Makati, Philippines and while there, GDMA provided him with the services of a prostitute.
Soon after Dusek’s vacations in Hawaii and the Philippines, Francis asked Dusek to exercise his influence on GDMA’s behalf by steering the aircraft carrier USS Abraham Lincoln and its associated strike group to Port Klang, Malaysia – a port terminal owned by Francis. Dusek replied in a series of emails to GDMA in late August 2010 that he would make it happen. “Good discussion with N00 (Admiral) today and convince him that PKCC (Francis’ terminal) is the better choice,” Dusek wrote to Francis on August 21, 2010. Three days later, Dusek reported to Francis that he had “everyone in agreement that the next CSG (Carrier Strike Group) through the AOR (area of responsibility) will stop at PKCC. Dates will be 08-12 Oct.”
In fact, the USS Abraham Lincoln Carrier Strike Group did make that visit to Francis’ port on October 8-12, 2010, a port visit that cost the United States approximately $1.6 million.
On September 17, 2013, when Dusek learned that Francis and Navy personnel had been arrested, he deleted the contents of his email accounts in an effort to avoid detection by law enforcement.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Dusek, Lieutenant Commander Todd Malaki, Commander Michael Vannak Khem Misiewicz, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; and 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; the others await sentencing.
The ongoing investigation is being conducted by NCIS, DCIS and the Defense Contract Audit Agency. The case is being prosecuted by Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section.
Those 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.
DEFENDANT Case Number: 15-CR-131-JLS
Daniel Dusek Age: 49 San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Highest-Ranking Navy Official Sentenced to 46 Months in Prison for Accepting Bribes from Foreign Defense Contractor in Massive Bribery and Fraud SchemeRead the Press Release
The highest-ranking official charged in a massive Navy bribery scandal was sentenced in federal court today to 46 months in prison for giving classified information to a foreign defense contractor in exchange for prostitutes, luxury travel and other gifts.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director James B. Burch of the Department of Defense’s 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.
U.S. Navy Capt. Daniel Dusek was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California, who also ordered Dusek to pay a $70,000 fine and $30,000 in restitution to the Navy. He was ordered to report to the U.S. Bureau of Prisons on June 15, 2016.
Dusek, 49, pleaded guilty in January 2015 to a single count of conspiracy to commit bribery. Dusek admitted that he used his influence as Deputy Director of Operations for the Seventh Fleet, headquartered in Yokosuka, Japan, and later as executive officer of the USS Essex and the commanding officer of the USS Bonhomme Richard, to benefit Leonard Glenn Francis and his company, Glenn Defense Marine Asia (GDMA). For decades, GDMA provided port services to U.S. Navy ships and in return, Francis plied Dusek with meals, alcohol, entertainment, gifts, dozens of nights and incidentals at luxury hotels and the services of prostitutes, Dusek admitted.
Underscoring his importance to the conspiracy, in an email to one of his employees, Francis wrote: “(Dusek) is a golden asset to drive the big decks (aircraft carriers) into our fat revenue GDMA ports.”
“As a Navy officer, Captain Dusek took an oath to bear true faith and allegiance to the United States,” said Assistant Attorney General Caldwell. “Instead, he chose self-interest, greed and prurience. And when he learned of the investigation, Captain Dusek deleted his email accounts in an attempt to shield his crimes from law enforcement. The Department of Justice is committed to holding public officials responsible when they betray the public trust.”
“Captain Dusek’s betrayal is the most distressing because the Navy placed so much trust, power and authority in his hands,” said U.S. Attorney Duffy. “This is a fitting sentence for a man who was so valuable that his conspirators labeled him their ‘Golden Asset.’”
“This outcome again sends the message that corruption will be vigorously investigated and prosecuted,” said Director Burch. “This is an unfortunate example of dishonorable naval officers who recklessly risked the safety of our troops by trading classified information for cash, extravagant gifts and prostitutes. Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed. This investigation should serve as a warning that those who compromise the integrity of the United States will face their day of reckoning. DCIS and our law enforcement partners will pursue these crimes relentlessly.”
“Captain Dusek put greed and personal pleasure above the safety of his shipmates and, in doing so, violated his sworn oath as a naval officer,” said Director Traver. “His sentence today attests to the seriousness of his crimes. NCIS, along with our partners at the Department of Justice, the Defense Criminal Investigative Service and the Defense Contract Audit Agency have been steadfast in our commitment to fully investigate the actions of all those involved in the GDMA case, and will continue with the same determination as the investigation continues.”
“DCAA is honored to be a partner with DCIS, NCIS and the Department of Justice in this investigation,” said Director Bales. “Our investigative support auditors did an outstanding job analyzing the evidence. I’m proud of their work and its impact on bringing justice to those who corruptly defraud the government.”
According to Dusek’s plea agreement, he hand-delivered Navy ship schedules to the GDMA office in Japan or emailed them directly to Francis or a GDMA employee on dozens of occasions, each time taking steps to avoid detection by law enforcement or U.S. Navy personnel.
Dusek was lavishly rewarded for his efforts to help GDMA. For example, according to the plea agreement, GDMA paid for a hotel for Dusek and his family at the Marriott Waikiki in Hawaii on July 19, 2010, and on Aug. 5, 2010, GDMA paid for a hotel room for Dusek at the Shangri-La in Makati, Philippines, and provided him with the services of a prostitute.
Soon after, Francis asked Dusek to exercise his influence on GDMA’s behalf by steering the aircraft carrier USS Abraham Lincoln and its associated strike group to Port Klang, Malaysia (PKCC) – a port terminal owned by Francis. Dusek replied in a series of emails to GDMA in late August 2010 that he would make it happen. “Good discussion with N00 (Admiral) today and convince him that PKCC is the better choice,” Dusek wrote to Francis on Aug. 21, 2010. Three days later, Dusek reported to Francis that he had “everyone in agreement that the next CSG (Carrier Strike Group) through the AOR (area of responsibility) will stop at PKCC. Dates will be 08-12 Oct.” The port visit cost the United States approximately $1.6 million.
On Sept. 17, 2013, when Dusek learned that Francis and Navy personnel had been arrested, he deleted the contents of his email accounts in an effort to avoid detection by law enforcement.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Dusek, Lieutenant Commander Todd Malaki, Commander Michael Vannak Khem Misiewicz, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. 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; and on March 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; the others await sentencing.
The ongoing investigation is being conducted by NCIS, DCIS and DCAA. The case is being prosecuted by Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California.
Those 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.
Owner of Tunnel House in Calexico Arrested Today in ArizonaRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – March 24, 2016
CALEXICO, California - Augustin Enrique Cruz, the owner of the house in Calexico where a subterranean drug tunnel exit was discovered yesterday, was arrested today in Tucson, Arizona and charged with various narcotics trafficking, money laundering and tunnel-related crimes.
Enrique Cruz, also known as “Tinky,” was taken into custody by agents from U.S. Immigration and Customs Enforcement Homeland Security Investigations and is expected to be arraigned in the District of Arizona before his transfer to the Southern District of California.
Yesterday, about 100 federal, state and local law enforcement officials seized the tunnel following an extensive, multi-agency investigation. In total, agents have arrested five people including Enrique Cruz and seized almost 3,000 pounds of marijuana. Agents continued to investigate the 415-yard tunnel which originated in El Sarape restaurant in Mexicali, Baja California, Mexico. Also yesterday, U.S. Border Patrol agents stood guard at the tunnel house.
According to a criminal complaint, Enrique Cruz traveled from Arizona to the Calexico area on multiple occasions in November and December 2014 to look for property that would serve as the exit point of a tunnel from Mexicali in Baja California, Mexico. In January 2014, Cruz purchased the property at 902 E. Third Street in Calexico. It is the first time in this district that drug traffickers are known to have purchased property and constructed a house for the sole purpose of concealing the exit of a drug tunnel.
To finance the purchase of the parcel, Cruz’s coconspirators arranged for various cash pickups in Arizona and California. Cruz also met with the title company for the closing. The parcel was placed in Enrique Cruz’s name on July 1, 2015.
In addition to purchasing the property, Enrique Cruz and his coconspirators hired local contractors to build a new house. Based on federal wiretaps, the construction of the residence was expected to cost $86,000. Enrique Cruz’s boss directed the contractor to leave a space in the foundation for a floor safe, which was intended to be the exit point for the tunnel. According to court documents, Enrique Cruz rented a walk-behind saw and concrete blade on January 27, 2016, to widen the exit point of the tunnel.
In the fall of 2015, Cruz and his coconspirators traveled to Calexico to meet with the contractor to make payments for the construction of the new residence and construction subsequently began. Throughout October 2015 and November 2015, crews continued with the construction of the residence which was completed in late December 2015.
Unbeknownst to the alleged traffickers, the purchase of the property and construction of the house and tunnel were completed under the watchful eye of Homeland Security Investigation (HSI) agents in Calexico.
Agents learned from monitoring court-authorized wiretaps of phones and from surveillance that Enrique Cruz and his coconspirators began smuggling narcotics through the tunnel on or after February 28, 2016. Agents intercepted several calls in which Enrique Cruz and his father discussed the conditions inside the tunnel.
According to the complaint, Enrique Cruz also arranged for the purchase of multiple vehicles that were used to transport marijuana. from the 3rd Street newly built residence to the secondary stash residence at 1056 Horizon Street in Calexico and another warehouse at 260 Avenida Campillo, Suite A, also in Calexico.
On March 7, 2015, HSI agents seized approximately 1,350 pounds of marijuana that was smuggled through the tunnel inside the Third Street residence, transported initially to the Horizon residence, and eventually to the Avenida Campillo warehouse before it landed in a Los Angeles warehouse – all under the eyes of law enforcement.
On March 23, 2016, multiple search warrants were executed by multiple federal agencies, led by HSI Special Agents. A tunnel was located inside the living room of the newly built Third Street residence. In addition, approximately 1,532 pounds of marijuana were found inside the Horizon stash location. Two individuals, Joel Duarte Medina and Manuel Gallegos Jiminez, were arrested in connection with the tunnel.
Duarte Medina, who was arrested at the Horizon stash location on March 23, 2016, and Gallegos Jiminez, who was arrested inside the Third Street residence where the tunnel was seized, were arraigned today before U.S. Magistrate Judge Peter C. Lewis in federal court in El Centro, California. They were charged with conspiracy to import marijuana (21 U.S.C. 952,960, 963, conspiracy to distribute (21 U.S.C 841, 846) and Conspiracy to Maintain Drug Premises (21 U.S.C. 856(a)(1).
Another defendant, Eva Duarte De Medina, was also arrested in Arizona in connection with this tunnel. She was charged with conspiracy to import marijuana (21 U.S.C. 952,960, 963, conspiracy to distribute (21 U.S.C 841, 846) and conspiracy to maintain drug premises (21 U.S.C. 856(a)(1). She was arraigned yesterday in the District of Arizona and was expected to be transferred to the Southern District of California for prosecution.
DEFENDANT
Augustin Enrique Cruz, aka Tinky
United States Citizen
Residence Tucson, Arizona
PENDING CHARGES AGAINST DEFENDANT ENRIQUE CRUZ
Conspiracy to Import Controlled Substances (Title 21, United States Code, Section 952, 960, 963)
Maximum Penalty: 20 years in custody; 3 years of supervised release, $1,000,000 fine
Conspiracy to Distribute Controlled Substances (Title 21, United States Code, Sections 841 and 846)
Maximum Penalty: 20 years in custody; 3 years of supervised release, $1,000,000 fine
Conspiracy to Maintain Drug Related Premises (Title 21, United States Code, Sections 845(a)(1) and 846)
Maximum Penalty: 20 years in custody; 3 years of supervised release, $250,000 fine
Conspiracy to Launder Money (Title 18, United States Code, Sections 1956(h) and 1956(a)(1)(A)(i)
Maximum Penalty: 20 years in custody; 3 years of supervised release, $500,000 fine
Aiding and abetting the construction, finance, and use of a narcotics tunnel (Title 18, United States Code, Sections 555 and 2)
Maximum Penalty: 20 years in custody; 3 years of supervised release, $500,000 fine
For visuals please see:
https://www.dvidshub.net/search?q=calexicotunnel
AGENCIES
U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations
Homeland Security Investigations, Calexico
U.S. Border Patrol, El Centro Sector
Drug Enforcement Administration
Customs and Border Protection
IRS Criminal Investigations
El Centro Police Department
Brawley 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.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Feds Seize Another Tunnel; Multiple Arrests and More Than a Ton of Marijuana ConfiscatedRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – March 23, 2016
CALEXICO – Federal officials seized a cross-border tunnel this morning following a lengthy multiagency investigation that resulted in the arrests of four people in Calexico, California and Arizona and the confiscation of more than a ton of marijuana.
The tunnel, approximately 415 yards in length, stretches from El Sarape Restaurant in Mexicali, Baja California, Mexico to a three-bedroom, two-bath house, located at 902 E. Third Street in Calexico, California, about 300 yards north of the international border. In the front room of the residence, agents found a hole in the floor covered with tile leading to a shaft descending underground.
Two people were arrested in Arizona yesterday and two people were arrested today in Calexico and charged by federal complaint with various drug trafficking, money laundering and tunnel-related charges, including conspiracy to import a controlled substance and conspiracy to use border tunnels and passages.
Defendants Joel Duarte Medina and Manuel Gallegos Jiminez were arrested in Calexico. Defendant Duarte Medina was arrested inside a residence located on Horizon Street, in Calexico, which was used as a stash location for the tunnel organization. Agents also seized approximately 1,532 pounds of marijuana inside the Horizon Street residence this morning. Defendant Gallegos Jiminez was arrested today inside the tunnel residence. Both defendants are scheduled to make their first court appearances tomorrow in El Centro before U.S. Magistrate Judge Pete Lewis.
Among those charged in Arizona was Marcia Manuela Duarte-Medina, who was taken into custody in Nogales, Arizona, on Tuesday night. In court documents, she and others are alleged to be the purchasers of the tunnel residence in Calexico. She is scheduled to appear today before U.S. Magistrate Judge Eric Markovich in Arizona.
Also arrested in Arizona was Marcia Manuel Duarte Medina’s mother, Eva Duarte De Medina, who was charged in the Southern District of California, with various crimes including conspiracy to import drugs, conspiracy to distribute drugs and maintaining drug related premises. As stated in court documents, Eva Duarte De Medina assisted in moving vehicles loaded with narcotics between the tunnel residence and the Horizon Street stash location. She is scheduled to appear today before Judge Markovich in Arizona.
This is the first operational tunnel discovered in Calexico in a decade. According to federal investigators, it also represents the first time drug traffickers are known to have purchased property and constructed a house for the sole purpose of concealing the exit of a subterranean drug tunnel. The search warrant affidavit and charging documents allege the traffickers scouted properties in the area and selected the Third Street parcel in a residential section of Calexico. The property sale was finalized in April of 2015 for $240,000 by the drug traffickers.
“This house and tunnel were constructed under the watchful eye of law enforcement,” said U.S. Attorney Laura Duffy. “For the builders, the financiers and the operators of these passageways, there is no light at the end of the tunnel. We will seize your drugs and your tunnel before you even have a chance to use it.”
“Today’s enforcement actions are the culmination of months of tireless investigative work by HSI and its enforcement partners, showing yet again our collective resolve to use all of the resources at our disposal to combat this increasingly dangerous form of cross-border smuggling,” said Dave Shaw, special agent in charge for HSI San Diego. “I’d emphasize that our investigation in this case is still very much ongoing, but preliminarily we believe the shuttering of this latest sophisticated smuggling tunnel has dealt a serious blow to yet another narcotics trafficking organization that was determined to succeed at all costs.”
“If these drug trafficking organizations think they can move their operations east and no one will be the wiser, they are mistaken,” said DEA San Diego Special Agent in Charge William R. Sherman. “With the assistance of our law enforcement partners, we will remain vigilant in both San Diego and Imperial Counties to ensure that these dangerous cross border drug tunnels are shut down and the organizations responsible are put out of business.”
Court documents describe how HSI special agents used court-authorized wiretaps and other investigative techniques to monitor the construction of the house during October and November of 2015. According to the case affidavit, the property owners told the construction contractor to leave a space for a floor safe when pouring a cement foundation for the house. Investigators believe the owners intended to use that hole in the foundation as the tunnel’s exit point. In late December, 2015, coconspirators rented a “walk behind saw and concrete blade” from a local business in El Centro, California, presumably to create the tunnel exit. The residence was completed in December of 2015 at a cost of approximately $86,000.
Once the house was finished, the drug trafficking organization opened the tunnel’s exit point and began smuggling narcotics through the tunnel. Based on intercepted calls and surveillance, agents believe the traffickers began smuggling narcotics through the tunnel after February 28, 2016. Investigators are confident that was the first time the tunnel was used.
According to court records, the drug traffickers used another residence four miles from the tunnel exit as a stash house at 1056 Horizon Street, Calexico, to store the smuggled narcotics. Eventually, the traffickers moved the narcotics from that stash location to a warehouse located at 260 Avenida Campillo, Suite A, Calexico, where the smuggled narcotics were stored until they could be moved northbound by the transportation cells.
Drivers transported the marijuana from the tunnel exit to a stash house and then to the Santo Thomas Swap Meet in Calexico, where a new driver would transport the load to another stash location. Thus drivers taking contraband to the Horizon Warehouse Street site were not aware of the original stash location at the Third Street property. Using multiple locations and multiple drivers is a means for drug traffickers to compartmentalize their operations and keep various players in the dark about the organization’s methods.
On March 7, 2016, HSI agents and West Covina Police Department seized over 1,350 pounds of marijuana that were smuggled through the tunnel and funneled into the two stash locations before being transported northbound to Los Angeles via Brawley. This was the only known time that traffickers moved the drugs from Calexico stash houses for distribution via Brawley and Los Angeles.
In total, authorities seized almost 3,000 pounds of marijuana.
Calexico is generally considered a less desirable place to construct tunnels because soil composition is more difficult to penetrate, and because it is a largely a residential city, making tunnel exits and smuggling activity more difficult to conceal.
Traffickers have found the Otay Mesa region, where the majority of super tunnels have been discovered along the California-Mexico border in recent years, to be a more attractive option because the terrain is easier to excavate and the thousands of warehouses on either side of the border provide convenient camouflage.
The tunnel dismantled today is the 12th large-scale operational drug smuggling tunnel discovered along the California border since 2006. In the last five years, federal authorities have detected more than 75 cross-border smuggling tunnels, most of them in California and Arizona.
For visuals please see:
https://www.dvidshub.net/search?q=calexicotunnel
AGENCIES
U.S. Immigration and Customs Enforcement Homeland Security Investigations
Homeland Security Investigations, Calexico
U.S. Border Patrol,. El Centro Sector
Drug Enforcement Administration
Customs and Border Protection
IRS Criminal Investigations
El Centro Police Department
Brawley 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.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Real Estate Brokers Imprisoned for Scheme to “Wash” Title to Million-Dollar San Diego HomesRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – March 21, 2016
SAN DIEGO – Brothers and former San Diego real estate brokers Adel Afkarian and Atef Afkarian were sentenced today to prison for their role in a fraudulent “debt elimination” scheme that purported to eliminate the mortgages on several million-dollar homes in San Diego.
U.S. District Judge John A. Houston sentenced Adel Afkarian to serve 18 months in custody and Atef Afkarian to serve 13 months. In addition to the time in custody, the brothers were both ordered to pay more than $5.5 million in restitution to the victims of the scheme.
To implement the scheme, the Afkarians identified underwater homeowners—including themselves—and began a process to make it appear as though the homeowners’ debts had been satisfied. To do so, they recorded fraudulent deeds that purported to extinguish the large mortgage loans encumbering each property. They then sold the properties to innocent purchasers, deceiving the buyers into paying the full purchase price to the Afkarians or their co-conspirators. The mortgage lenders, unaware of the fraudulent documents recorded on title or unable to prevent the sale in time, were left unpaid.
With regard to their own underwater home, the Afkarians pretended that $1.4 million in mortgage debt had vanished. They used the “debt elimination” method to successfully arrange the fraudulent sale of a total of four properties in and around San Diego, generating more than $4.3 million in proceeds which went directly into bank accounts owned by the brothers and their co-conspirators. In some cases, they sold this fraudulent “debt elimination” program to existing clients of their mortgage business.
In addition to the “debt elimination” scheme, Adel and Atef Afkarian also conspired to arrange fraudulent short sales for underwater clients through a simultaneous “double escrow” scheme. Rather than selling an underwater home at a pre-approved short sale price, the defendants arranged two simultaneous sales of the same property at two different sale prices, using a straw buyer as the intermediary and purported seller in the second transaction. This way, the short sale lender would believe that the property was being sold for initial first-escrow price, rather than the higher second-escrow price (which was in fact the arms-length market sales prices). The defendants and their co-conspirators would then pocket the difference, diverting money from the lenders.
The Afkarians each pleaded guilty in September 2013, admitting their participation in these schemes. As part of their guilty pleas, they also agreed to forfeit a home on Santa Fe Canyon Place, which they had purchased using approximately $715,000 in proceeds of the fraud, and an additional $388,000 recovered from bank accounts where they had transferred proceeds.
One of the Afkarians’ clients, Mehran Abazary, was also charged in connection with this case, and pleaded guilty on December 15, 2015. Abazary admitted that he owed more than $2 million in mortgage debt when he hired the Afkarians and their co-conspirators to help him “eliminate” this debt and sell the property. When the sale closed, Abazary received $250,000 in proceeds of the sale. Abazary pleaded guilty to filing a false tax return omitting to disclose this income to the Internal Revenue Service. He is scheduled to be sentenced by Judge Houston on September 6, 2016, at 8:30 am.
DEFENDANTS & CHARGES
Adel Afkarian, 13CR1469-JAH (1) Age: 42 Carlsbad, California
Atef Afkarian, 13CR1469-JAH (2) Age: 40 Slidell, Louisiana
Conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, $100 special assessment, 3 years’ supervised release, restitution
ADDITIONAL DEFENDANT & CHARGES
Mehran Abazary, 15CR3073-JAH Age: 64 San Diego, CA
Subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, 1 year supervised release, restitution
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigation
Man Sentenced to More Than Eight Years in Prison for two Fraud Schemes, Including one that Cost Verizon $17 MillionRead the Press Release
Assistant U. S. Attorneys Joseph Green (619) 546-6955 and Jennifer Resnik (213) 894-6595
NEWS RELEASE SUMMARY – March 21, 2016
SAN DIEGO – The owner of a Glendale-based ride-sharing business was sentenced in federal court today to more than eight years in prison in two separate fraud cases, including one involving the sale of more than 30,000 Apple iPhones fraudulently obtained from Verizon Wireless at substantially discounted prices.
Karen “Kevin” Galstian, 38, of Chatsworth, California, was sentenced by U.S. District Judge Barry Ted Moskowitz to 100 months in the scheme against Verizon Wireless that generated illegal profits of more than $13 million, and 87 months for defrauding Bank of America out of almost $700,000. The sentences are to run concurrently.
Judge Moskowitz also ordered Galstain to pay $17 million in restitution to Verizon and more than $200,000 in restitution to Bank of America.
Galstian pleaded guilty in November in San Diego to one count of wire fraud, admitting that he committed the offense while on pre-trial release in the case involving Bank of America. In that case, Galstian pleaded guilty in January 2014 to bank fraud.
As part of the scheme involving the iPhones, Galstian admitted that he used his company, Toro Ride, Inc., to induce Verizon Wireless to provide the business with more than 30,000 iPhones at a substantial discount. He purchased most of the mobile phones that usually sell for more than $500 for only 99 cents each – in connection with a two-year contract.
Galstian claimed that the phones would be used by drivers for Toro Ride’s ride-sharing service and that Toro Ride, which had only been operating in the Los Angeles area, was poised to expand nationwide. Galstian falsely told Verizon that Toro Ride had received $20 million from investors. When he brokered the deal with Verizon last year, Galstian failed to disclose the he was awaiting sentencing in the bank fraud case and thus would be incarcerated and unavailable to lead the company in the expansion.
As Verizon provided the iPhones that supposedly would be used by Toro Ride’s drivers, Galstian sold the vast majority of the devices to companies engaged in the international re-sale of consumer electronics. Thousands of the iPhones that Verizon shipped to Toro Ride were never used on its network and instead were activated in countries such as Vietnam, Iraq, China and Saudi Arabia.
Galstian fraudulently convinced Verizon to provide him with iPhones worth more than $19.4 million. In less than six months, Galstian generated illegal proceeds of more than $13 million by re-selling the iPhones. Toro Ride used some of the illicit proceeds derived from iPhone sales to make required monthly payments to Verizon, which enabled Galstian to continue to order thousands of additional iPhones.
In the bank fraud scheme, Galstian orchestrated a conspiracy to defraud Bank of America of approximately $689,000. As part of the scheme, members of the conspiracy opened over 90 accounts at Bank of America and engaged in a series of transactions that allowed them withdraw funds before Bank of America learned that there were not sufficient funds in the target accounts to cover the withdrawals.
In yet another scheme, Galstain admitted to cashing checks drawn on accounts in which fraudulently-obtained tax returns had been deposited.
Galstian used approximately $2.5 million of the proceeds from the Verizon fraud to purchase several properties, including a penthouse condominium in the Palms Casino in Las Vegas, and a Mercedes S550. The court ordered the forfeiture of various assets obtained by Galstian through the fraud scheme, including real properties in Northridge, Sherman Oaks, Tujunga and Las Vegas, as well as more than $200,000 seized from bank accounts and a number of vehicles.
DEFENDANTS
Karen “Kevin” Galstian Age: 38 Newport Beach, CA
SUMMARY OF CHARGES Case Number 15cr2509
15cr2509-BTM (Verizon iPhone scheme)
Wire Fraud, 18 USC 1343; Commission of an Offense While on Release, 18 U.S.C. 3147
Max penalties: 30 years prison, a fine in the amount of twice the gross gain or loss resulting from the offense, $100 special assessment, 3 years supervised release
SUMMARY OF CHARGES Case Number 13cr3481
13cr3481-BTM (Bank of America scheme)
Conspiracy to Commit Bank Fraud, 18 U.S.C. 1349
Max penalties: 30 years prison, $1,000,00 fine, $100 special assessment, 3 years supervised release
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
Local Tax Preparer Sentenced to Seven Years in Prison for Filing Thousands of False Tax Returns and Stealing Identities in Multi-Million Dollar ScamRead the Press Release
Assistant U.S. Attorneys Joseph J.M. Orabona (619) 546-7951 or Alexandra Foster (619) 546-6735
NEWS RELEASE SUMMARY – March 18, 2016
SAN DIEGO – The owner of a tax preparation business in San Diego County was sentenced in federal court today to seven years in prison, admitting that she filed more than 3,500 false income tax returns with the Internal Revenue Service, that she committed tax evasion, and that she stole the identities of minors and other persons in order to obtain more than $7 million in bogus refunds.
Melissa Ann Vega, also known as Lisa Vega, was a local tax preparer and owner of L&T Works, a tax return preparation business on Miramar Road. She was sentenced on charges of conspiracy to file false, fictitious, and fraudulent claims for federal tax refunds, tax evasion and aggravated identity theft before U.S. District Court Judge Jeffrey T. Miller.
As detailed in her plea agreement, Vega conspired with others from at least December 2009 through April 2015 to submit thousands of false income tax returns to the IRS in order to fraudulently obtain tax refunds to which Vega, her co-conspirators and her clients were not entitled. In carrying out her scheme, Vega falsified her clients’ tax returns without their knowledge or consent. As part of the conspiracy, Vega claimed thousands of dollars in false education expenses and tax credits for which her clients were not qualified.
Vega told her co-conspirators and employees that they should maximize clients’ refunds by filing for a $4,000 education credit, even though the clients did not attend school for that tax year. To conceal her role in the fraud, Vega intentionally omitted her name and tax return preparer identification number on the false tax returns she prepared for her clients. In total, Vega’s fraud caused the IRS to pay more than $7 million in artificially-inflated tax refunds based solely on the false education credits. Moreover, Vega admitted that she and her co-conspirators stole the identities of other persons, including minors, and used them on the false tax returns in order to further inflate the amount of the tax refund paid by the IRS.
Vega did not shy away from personally profiting from her fraudulent scheme. In addition to charging her clients between $150 and $200 per return, Vega also admitted that she stole more than $300,000 in false tax refunds from her clients by directing their refunds into bank accounts that she controlled. Vega also admitted that she evaded her own income taxes and filed false personal tax returns in which she fraudulently claimed withholding credits, education credits, and tax credits for minor dependents that she did not support and who were not related to her. According to court documents, Vega evaded more than $156,000 in taxes due to the IRS for tax years 2009 through 2013.
Vega was arrested on gun charges on December 16, 2014. On January 28, 2015, she was released on bond and ordered not to commit any federal crimes --specifically filing false tax returns-- while out in the community. Nonetheless, Vega once again began filing false tax returns with the IRS within days of her release. Without the clients’ knowledge, Vega again fraudulently inflated or created credits and deductions to maximize her clients’ false returns. In an attempt to cover up her criminal activity, Vega agreed with Deanna Dave (charged in Criminal Case No. 15CR2715-JM) that Dave was the owner and paid-return preparer for the tax returns filed in February 2015. In truth, Vega continued as the owner of her tax preparation business and prepared the false tax returns, which she filed for her clients. The IRS uncovered her fraud, and Vega was again arrested on February 25, 2015. Dave pled guilty to providing false statements to the grand jury and is set for sentencing on April 1, 2016, before Judge Miller.
In addition to sentencing Vega, a previously convicted felon, to 7 years in prison, the Court also ordered the forfeiture of several firearms seized from Vega’s residence during the execution of a search warrant in April 2014, including a sawed-off shotgun, shotgun shells, a 9mm handgun, and 9mm ammunition. Vega’s husband, Jamie Lang, was sentenced to 30 months for possessing the unregistered sawed-off shotgun. The Court ordered Vega to pay restitution to the IRS in the total amount of $7,176,836.
Furthermore, as part of her plea agreement, Vega agreed to be permanently enjoined from ever preparing or filing federal income tax returns for anyone other than herself. A permanent injunction will be entered by the IRS to prevent Vega from acting as a tax preparer in the future.
“Tax fraud results in an increasing burden on honest taxpayers and negatively impacts honest citizens’ confidence in our tax system,” said U.S. Attorney Laura Duffy. “Identity theft not only has a long-lasting financial impact on the victims, but also has an emotional impact affecting the stability of victims and their families. Today’s seven-year sentence for Ms. Vega sends a message to tax preparers and others who engage in refund schemes and identity theft that the government will prosecute you to the fullest extent of the law and that the punishment will be severe.” With the current tax return filing season underway, U.S. Attorney Duffy reminded the public to always review a copy of any tax return prepared and filed on their behalf and to be skeptical of tax preparers that offer to obtain substantial tax refunds.
“Over the span of six years, Ms. Vega operated a massive tax refund and identity theft scheme, often using the identities of children to falsify deductions,” stated Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation. “As today’s sentence shows, the government will hold accountable those who use deceit and fraud to line their pockets with money, especially when that money represents stolen federal tax refunds.”
“Today’s sentencing is a direct result of the efforts of dedicated investigators and prosecutors, and is a reminder that the U.S. Secret Service will vigorously investigate identity thieves who use the personal information of unsuspecting victims,” stated Special Agent In Charge David Murray, U.S. Secret Service.
Separately, three more defendants have entered guilty pleas admitting their roles in the tax fraud conspiracy. Earlier this year, co-conspirators Tammie Cowles, Stephen Elliott, and Justin Vega entered guilty pleas to conspiracy to file false claims for tax refunds. Co-conspirators Justin Vega and Stephen Elliott are scheduled to be sentenced before U.S. District Judge Jeffrey T. Miller on April 15, 2016, and co-conspirators Tammie Cowles is scheduled for sentencing before Judge Miller on May 6, 2016.
The public is reminded that tax-related identity theft occurs when someone uses your stolen Social Security number (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 completed 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
DEFENDANT Criminal Case No. 14CR3658-JM
Melissa Ann Vega Age: 44 San Diego, CA
SUMMARY OF CHARGES THAT DEFENDANT VEGA PLEADED GUILTY TO:
Count 1 – Title 18, United States Code, Section 286 B Conspiracy to File False Claims
Maximum penalties: 10 years in prison, $250,000 fine, 3 years of supervised release.
Count 2 – Title 26, United States Code, Section 7201 – Tax Evasion
Maximum penalties: 5 years in prison, $250,000 fine, 1 year of supervised release.
Count 3 – Title 18, United States Code, Section 1028A – Aggravated Identity Theft
Maximum penalties: 2 years in prison to be served consecutive to any other term of imprisonment, $250,000 fine, 3 years of supervised release.
OTHER CO-CONSPIRATORS AND CHARGES:
Tammie Cowles Age: 41 San Diego, CA Criminal Case No. 15CR1591-JM
Pleaded Guilty to: Title 18, United States Code, Section 286 – Conspiracy to File False Claims
Stephen Elliott Age: 28 San Diego, CA Criminal Case No. 15CR1003-JM
Pleaded Guilty to: Title 18, United States Code, Section 286 – Conspiracy to File False Claims
Justin Vega Age: 26 San Diego, CA Criminal Case No. 15CR2198-JM
Pleaded Guilty to: Title 18, United States Code, Section 286 – Conspiracy to File False Claims
Deanna Dave Age: 49 San Diego, CA Criminal Case No. 15CR2715-JM
Pleaded Guilty to: Title 18, United States Code, Section 1623 – False Declaration before Grand Jury
Jamie Lang Age: 27 San Diego, CA Criminal Case No. 14CR3658-JM
Pleaded Guilty to: Title 26, United States Code, Section 5861(d) – Possession of Saw-Off Shotgun
Sentenced to: 30 months in prison, 3 years of supervised release, forfeiture of firearms
INVESTIGATING AGENCIES
Internal Revenue Service-Criminal Investigation
United States Secret Service
Bureau of Alcohol, Tobacco, and Firearms
Former Executive of Defense Contractor Sentenced to 63 Months in Prison for $30 Million Fraud SchemeRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – March 18, 2016
SAN DIEGO – Alex Wisidagama, a former executive of a Singapore-based defense contracting firm Glenn Defense Marine Asia, was sentenced to 63 months in prison today for his participation in a fraud scheme that over-billed the U.S. Navy by more than $34 million for ship husbanding services.
Wisidagama, 42, of Singapore, the former global manager for government contracts of Glenn Defense Marine Asia (GDMA), was sentenced today by U.S. District Judge Janis L. Sammartino. In addition to imposing the prison term, Judge Sammartino ordered Wisidagama to pay $34.8 million in restitution to the Navy.
In March 2014, Wisidagama pleaded guilty to one count of conspiracy to submit false claims for payment. He is the third defendant to be sentenced in a massive fraud and corruption scheme involving GDMA, which provided port services to U.S. Navy ships in the Asia-Pacific region.
According to admissions made as part of his plea agreement, Wisidagama and his cousin, GDMA CEO Leonard Glenn Francis, 51, of Malaysia, perpetrated a scheme to defraud the U.S. Navy on ship husbanding contracts by, among other things, over-billing for the sale of goods, fuel and port tariffs. Records show that GDMA’s contracts with the U.S. Navy allowed it to sell certain categories of supplies for which GDMA was the lowest bidder. To make it appear that GDMA’s prices were competitive, Wisidagama and others created false price quotations purporting to be from third-party vendors and submitted them to the U.S. Navy, he admitted. Because the contracts forbade GDMA from making up the price of fuel that it supplied to U.S. Navy ships, Wisidagama admitted that he and his conspirators created false invoices purporting to show that GDMA paid more to purchase fuel than was actually the case, which allowed GDMA to build undisclosed markups into the prices at which it supplied fuel to the U.S. Navy. According to the plea, GDMA inflated the cost of port tariff expenses that it passed on to GDMA, despite the fact that the contracts did not allow GDMA to mark up these items.
Wisidagama admitted that in October 2011, GDMA charged the U.S. Navy $2,739,351.49 to service the USS Mustin during a port visit to Thailand, $1,593,766.75 of the charges were fraudulent. Wisidagama admitted that the scheme caused more $34 million in total losses to the U.S. Navy.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Malaki, Commander Michael Vannak Khem Misiewicz, Captain Daniel Dusek, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; and 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; the others await sentencing.
NCIS, DCIS and the Defense Contract Audit Agency are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
Those 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.
DEFENDANT Case Number: 13cr4043-JLS
Alex Wisidagama 42 Singapore
SUMMARY OF CHARGES
Conspiracy to Defraud the United States in violation of 18 USC 286
Maximum of 10 years in prison; a maximum $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Former Executive of Defense Contractor Sentenced to 63 Months in Prison for $30 Million Fraud SchemeRead the Press Release
A former executive of a Singapore-based defense contracting firm was sentenced to 63 months in prison today for his participation in a fraud scheme that over-billed the U.S. Navy by more than $34 million for ship husbanding services.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Special Agent in Charge Chris D. Hendrickson of the Defense Criminal Investigative Service’s (DCIS) Western Field Office and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Alex Wisidagama, 42, of Singapore, the former global manager for government contracts of Glenn Defense Marine Asia (GDMA), was sentenced today by U.S. District Judge Janis L. Sammartino of the Southern District of California. In addition to imposing the prison term, Judge Sammartino ordered Wisidagama to pay $34.8 million in restitution to the Navy. In March 2014, Wisidagama pleaded guilty to one count of conspiracy to submit false claims for payment. He is the third defendant to be sentenced in a massive fraud and corruption scheme involving GDMA, which provided port services to U.S. Navy ships in the Asia-Pacific region.
According to admissions made as part of his plea agreement, Wisidagama and his cousin, GDMA CEO Leonard Glenn Francis, 51, of Malaysia, perpetrated a scheme to defraud the U.S. Navy on ship husbanding contracts by, among other things, over-billing for the sale of goods, fuel and port tariffs. Records show that GDMA’s contracts with the U.S. Navy allowed it to sell certain categories of supplies for which GDMA was the lowest bidder. To make it appear that GDMA’s prices were competitive, Wisidagama and others created false price quotations purporting to be from third-party vendors and submitted them to the U.S. Navy, he admitted. Because the contracts forbade GDMA from making up the price of fuel that it supplied to U.S. Navy ships, Wisidagama admitted that he and his conspirators created false invoices purporting to show that GDMA paid more to purchase fuel than was actually the case, which allowed GDMA to build undisclosed markups into the prices at which it supplied fuel to the U.S. Navy. According to the plea, GDMA inflated the cost of port tariff expenses that it passed on to GDMA, despite the fact that the contracts did not allow GDMA to mark up these items.
Wisidagama admitted that in October 2011, GDMA charged the U.S. Navy $2,739,351.49 to service the USS Mustin during a port visit to Thailand, $1,593,766.75 of the charges were fraudulent. Wisidagama admitted that the scheme caused more $34 million in total losses to the U.S. Navy.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Malaki, Commander Michael Vannak Khem Misiewicz, Captain Daniel Dusek, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense (DoD) civilian employee Paul Simpkins awaits trial. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; and 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; the others await sentencing.
NCIS, DCIS and the Defense Contract Audit Agency are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
Those 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.
Son of Former U.S. Mint Employee Returns “1974-D Aluminum Penny” to MintRead the Press Release
Assistant U. S. Attorneys Joseph Price (619) 546-7642 and Joseph Purcell (619) 546-7643
NEWS RELEASE SUMMARY – March 17, 2016
SAN DIEGO – The son of a late United States Mint official has returned a rare and valuable 1974-D aluminum one-cent piece to the United States Mint, bringing an end to a lawsuit over the ownership of the piece.
Randall Lawrence, the son of the late Mint official Harry Lawrence, and Michael McConnell, the owner of the La Jolla Coin Shop, had brought a lawsuit against the United States to establish ownership rights of the penny.
Harry Lawrence had been a Deputy Director of the United States Mint at Denver until his retirement in 1980. He died later that year. In 2014, Harry Lawrence’s son, Randall Lawrence, gave multiple news interviews during which he claimed that among the property he inherited from his father was what appeared to be a 1974 aluminum penny bearing a “D” (for Denver) mintmark. Mr. Lawrence, who had recently moved from Colorado to San Diego, had met with Michael McConnell, the owner of the La Jolla Coin Shop, and they reached an agreement to exhibit the piece at coin shows and to offer it for public sale through a well-known auction house. Mr. Lawrence and Mr. McConnell claimed that there were estimates that the piece might fetch upwards of $2 million at auction.
Upon learning that the piece existed and that Mr. Lawrence and Mr. McConnell planned to sell it, the United States Mint contacted Mr. Lawrence and Mr. McConnell to demand its return. Mr. Lawrence and Mr. McConnell responded to the United States’ demand that the piece be returned by filing a lawsuit against the United Sates in United States District Court for the Southern District of California seeking a judicial declaration that they were the owners of the piece. The United States contended in litigation that it be declared the rightful owner of the piece because there was never any authorization for an aluminum one-cent piece to be struck at the Denver Mint, that the piece was clandestinely struck and unlawfully removed from the Denver Mint, that federal employees are not permitted to remove federal property without proper authorization, and that the piece always has been and remained federal property.
Mr. Lawrence and Mr. McConnell have now returned the 1974-D aluminum one-cent piece to the United States. By the terms of an agreement to end the litigation that they brought against the United States, Mr. Lawrence and Mr. McConnell have voluntarily relinquished all claims of ownership, legal title, or dominion over the 1974-D aluminum one-cent piece to the United States. The piece was transferred to the custody and control of the United States Mint for its use and display as it may determine.
“This result ends the litigation successfully and returns the subject piece to its rightful owner, the United States Mint. It also vindicates the Government’s position that items made at United States Mint facilities but not lawfully issued, or otherwise lawfully disposed of, remain Government property and are not souvenirs that government employees can merely remove and pass down to their heirs,” said U.S. Attorney Duffy.
“The Mint is very pleased with the agreement, and we are very grateful to the U.S. Attorney’s Office in San Diego for its work and efforts in reaching this resolution. We look forward to displaying the coin appropriately as an important Mint heritage asset,” said Rhett Jeppson, United States Mint Principal Deputy Director. “This agreement is not only good for the integrity of the coin collecting hobby but for the integrity of the government property and rule of law.”
The case was handled by Assistant United States Attorneys Joseph P. Price, Jr. and Joseph J. Purcell. Randall Lawrence and Michael McConnell v. United States Department of the Treasury; United States Bureau of the Mint; and the United States of America, District Court Case No. 14-cv-00594-WQH (MDD).
San Diego Man Sentenced to 96 months in Prison for Making False Statements in an International Terrorism InvestigationRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney John Parmley (619) 546-7957 and Michael Kaplan (619) 546-7927
NEWS RELEASE SUMMARY – March 14, 2016
SAN DIEGO – Mohamad Saeed Kodaimati of San Diego was sentenced in federal court today to eight years in prison for making false statements to FBI and State Department officials during a terrorism-related interview at the U.S. Embassy in Ankara, Turkey.
Kodaimati, a naturalized U.S. citizen, pleaded guilty in October 2015 to one count of False Statements Involving International Terrorism. As part of his guilty plea, Kodaimati acknowledged that he lied in March 2015 when he said he did not know any members of Islamic State in Iraq, a designated foreign terrorist organization known as ISIL; that he falsely claimed that while in Syria he was never involved with Al Nusrah, also a foreign terrorist organization; and that he again lied when he said that while in Syria he had never engaged in combat or fired a weapon at anyone.
In his plea agreement, Kodaimati admitted that he knew a member of ISIL and that while in Syria he participated in a battle against the Syrian regime, including shooting at others, in coordination with Al Nusrah fighters.
During today’s sentencing hearing, U.S. District Judge Anthony Battaglia noted that the crime involved “very, very serious” false statements and that an eight year sentence was necessary to deter others who might be tempted to lie when national security is at stake.
“The defendant deliberately hid his connections to terrorists and the fact that he participated in combat in Syria,” said U.S. Attorney Laura Duffy. “This is an appropriately severe sentence that underscores the very serious nature of a crime that has the potential to jeopardize our national security.”
“This international terrorism investigation that started in Ankara, Turkey and ended up in San Diego, California, exemplifies the tireless efforts of the FBI's Joint Terrorism Task Force (JTTF) members to aggressively investigate and prosecute those who engage in international terrorism activity,” said FBI Special Agent in Charge, Eric S. Birnbaum. “Today's sentencing will hold Mr. Kodaimati accountable for his lies and dissuade others from lying to FBI agents regarding international terrorism matters.”
“This investigation underscores the serious threat posed by the violent propaganda being spread by international terrorist organizations both here and abroad,” said Dave Shaw, special agent in charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Diego. “I commend the San Diego Joint Terrorism Task Force for its outstanding work to connect the dots in this complicated case, which eventually tied back to San Diego. HSI is using all of the tools and authorities at its disposal to promote national security and protect our citizens.”
Kodaimati was born in Syria and became a naturalized U.S. citizen in September 2008. In December 2012, Kodaimati travelled from San Diego to Istanbul and was in Syria and Turkey until his return to the United States.
In March 2015, he met with an FBI agent and a State Department agent at the U.S. Embassy in Ankara, Turkey, where he made the false statements.
Kodaimati eventually returned to San Diego on March 29, 2015. He was arrested by FBI agents and members of the San Diego Joint Terrorism Task Force (JTTF) in Rancho Bernardo, California, without incident on April 22, 2015.
DEFENDANT Case Number: 15cr1298-AJB
Mohamad Saeed Kodaimati Age 25 San Diego
SUMMARY OF CHARGES
False Statements Involving International Terrorism, in violation 18 U.S.C. 1001(a)(2)
Maximum penalty eight years in prison, $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Joint Terrorism Task Force
Homeland Security Investigations
Federal Jury Convicts Four West Coast Crips Street Gang Members of Racketeering Conspiracy Involving Murders, Sex Trafficking and RobberyRead the Press Release
For Further Information, Contact Assistant U.S. Attorneys Todd Robinson (619) 546-7994 and David Leshner (619) 546-7921
NEWS RELEASE SUMMARY – March 11, 2016
SAN DIEGO, CA – Four members of the West Coast Crips criminal street gang were convicted by a federal jury today of participating in a racketeering enterprise involving execution-style murders, a takeover robbery, witness intimidation and other acts of violence.
The jury found defendants Terry Carry Hollins, Jermaine Gerald Cook, Marcus Anthony Foreman and Wilbert Ross guilty of Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity at the conclusion of a five-week trial and about eight hours of deliberations. The jury also found Ross guilty of two counts of sex trafficking. U.S. District Judge Dana M. Sabraw set sentencing for June 24, 2016 at 1 p.m. The defendants face up to life in prison.
The four convicted defendants were arrested and charged in 2014 as part of a larger investigation involving 36 other defendants. Thirty-four have pleaded guilty. One, Cleotha Young, went to trial in June 2015, was convicted by a jury and sentenced to 20 years in prison. The lead defendant, Randy Graves, is set for trial on March 28, 2016.
“As a result of today's verdicts, and the dozens of guilty pleas that preceded them, these ruthless and ultra-violent gang members will likely serve decades in prison, unable to further terrorize San Diego neighborhoods,” said U.S. Attorney Laura Duffy. “Today, Hollins, Cook, Foreman and Ross were held accountable for executing their friends, random people, and anyone else who dared to challenge them. With this verdict, the jury has said, ‘Enough!’”
"Today's convictions are an example of the FBI's commitment to working with our law enforcement partners in identifying, disrupting and dismantling violent street gangs that prey upon the vulnerable and threaten the safety of our communities" commented FBI Special Agent in Charge, Eric S. Birnbaum. "The FBI and our partners will continue to aggressively investigate and prosecute those who victimize our communities and undermine the safety and security of our neighborhoods.”
The federal racketeering statute known as “RICO” historically has been used to prosecute mobsters and organized crime, but federal prosecutors have been using the statute on street gangs in recent years because the gangs are increasingly acting as organized criminal enterprises.
During this trial, prosecutors set out to show the jury how the defendants worked together as a criminal enterprise to commit six murders, to use a 15-year-old girl and another female as prostitutes, and to commit robbery on behalf of the West Coast Crips.
The government called about 100 witnesses, including several street gang members, a shooting victim, friends and associates of the defendants, representatives from the Medical Examiner’s Office and dozens of San Diego Police Department homicide and gang detectives, police officers and criminalists.
The evidence presented by the government included court-authorized wiretap interceptions and recordings of telephone, cell phone and jailhouse conversations between the defendants and others, as well as cell phone videos of the defendants celebrating their West Coast Crips membership and discussing the crimes they were committing.
The jury found that the defendants acted as a criminal enterprise to commit the following murders and other violent acts:
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Defendant Cook fatally shot Joseph Hutchins, a 19-year-old who was fatally shot while riding his bicycle down Orange Avenue for wearing a red shirt, the color of a rival gang.
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Defendant Foreman approached the victim, Andres Caldera, asked for a cigarette then issued a gang challenge to him: “Where are you from?” When Caldera answered by asking where Foreman was from, Foreman yelled, “I am from West Coast 30s!” and pulled out a .40-caliber handgun, firing a single shot at Caldera’s face.
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Foreman, Ross and Hollins robbed a Logan Heights business in takeover style, forcing employees onto the floor and holding guns to their heads. During a police chase, the trio ditched their getaway car and the gun, but officers arrested all three and recovered the gun - which was the same gun used in the murder of Caldera.
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West Coast Crip member Meashal Fairley was murdered in front of a San Diego nightclub because of Fairley’s suspected cooperation with law enforcement. Hollins and Cook were connected to the scene of the crime through DNA evidence.
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Another killing occurred in the parking lot of a fast food restaurant. Defendant Ross had a dispute with a man over a rental car. They set up a meeting at the restaurant, supposedly to resolve the dispute. But upon arrival, the man was attacked by a group of West Coast Crips led by Ross. In self-defense, the man fatally stabbed one of his attackers, Jeffrey “JJ” Rees.
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West Coast Crips member Paris Hill was murdered by fellow Crips for giving a statement to police about the Rees murder. In one recording, Hollins told his cellmates: “That's how we did the boy…When it was time . . . I seen it all in his face . . . but cuz blue, he was a gangster though. And he
knew that . . . it was his doing.” Prosecutors argued before the jury that this was an admission that he participated in Hill’s murder.
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Chyrene Borgen, a West Coast Crip associate, was gunned down at a Halloween party after she had criticized the defendants for murdering Meashal Fairley. Following this murder, several defendants posted photos of themselves on Facebook from the murder scene. Defendant Hollins is wearing a T-shirt that said: “3 BABIEZ, YELLOW TAPE GANG, ANYBODY KILLA.” The defendants appeared on cell phone videos boasting about their crimes.
This case was prosecuted by Assistant U.S. Attorneys Todd Robinson, David Leshner, Jose Castillo and Stephen Wong.
These guilty verdicts are the fruit of the collaborative work of the FBI’s East County Regional Gang Task Force and the Violent Crimes Gang Task Force, the San Diego Police Department’s gang and homicide units; the ATF; the El Cajon Police Department; the La Mesa Police Department; San Diego County Probation; the IRS; U.S. Postal Inspectors; the San Diego County Sheriff’s Department; and the California Highway Patrol.
This investigation was coordinated by an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country's
battle against major drug trafficking rings, drug kingpins, and money launderers.
DEFENDANTS
Case Number: 14mj1494
Terry Carry Hollins Age: 33 San Diego
Jermaine Gerald Cook Age: 31 San Diego
Marcus Anthony Foreman Age: 28 San Diego
Wilbert Ross Age: 32 Chula Vista
SUMMARY OF CHARGES
All Defendants:
Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, in violation of Title 18, U.S.C. Section 1962 (d)
Maximum Penalty, based on the underlying racketeering crimes: Up to life in prison.
Defendant Ross:
Sex Trafficking of a Minor, in violation of 18 USC 1591
Maximum Penalty: Life in prison
Sex Trafficking by Force, Fraud or Coercion, in violation of 18 USC 1591
Maximum Penalty: Life in prison
INVESTIGATING AGENCIES
San Diego Police Department Gang and Homicide Units
East County Regional Gang Task Force
Violent Crimes Task Force - Gang Group
Task Force agencies include:
FBI
San Diego Police Department
ATF
El Cajon Police Department
La Mesa Police Department
San Diego County Probation
IRS
U.S. Postal Inspectors
San Diego County Sheriff’s Department
California Highway Patrol.
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Puretane Executives Admit Laundering Profits from Illegal Butane BusinessRead the Press Release
Assistant U.S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – March 10, 2016
SAN DIEGO – Former Chief Executive Officer Michael Tandberg and Chief Financial Officer Adam Hopkins of Lahar Manufacturing, Inc., pleaded guilty in federal court today, admitting that they conspired to launder proceeds from their illegal business. Their Newport Beach-based business—operating under the name Puretane—was the first and largest domestic manufacturer and distributor of butane specifically designed for use in making butane hash oil.
Butane hash oil (“BHO”) is a marijuana concentrate similar in appearance to honey or butter. BHO contains extremely high levels of tetrahydrocannabinol, or THC, and can be up to four times more potent than high grade marijuana. BHO is commonly manufactured by packing marijuana into a glass, plastic, or metal tube. Butane is then sprayed into the top of the tube. The butane strips the marijuana of its cannabinoid-containing oils, which drip from the bottom of the tube, often through a filter and into a holding container. The end product is highly-profitable and can be ingested as an oil, consumed in edibles, or solidified to make concentrated forms of cannabis known as “wax.”
During the manufacture of BHO, butane, a flammable gas that is odorless, colorless, and heavier than air, can evaporate out of the substance and collect on the floor, accumulating to explosive levels without proper ventilation. This process creates an invisible, but very real, risk of fires, explosions, and chemical burns. In 2015 alone, there were 33 reported fires and explosions that occurred during the manufacture of BHO in California.
According to the DEA, Butane Hash Oil Extraction Laboratories have caused 10 fires and explosions in San Diego County since January of 2015. In the Southern District of California there have been a number of Butane Hash Oil Extraction cases. In a recent case, defendant Steve Mora was sentenced last month to 40 months in custody after pleading guilty to creating substantial risk to human life while manufacturing Butane Hash Oil. Mora operated a marijuana dispensary where BHO was manufactured and resulted in an explosion in 2014.
News reports indicate that butane-related blasts are happening all over the country. For example, a 2014 article reported that Butane-fueled blasts sent 17 people to a Portland burn unit with serious injuries in the past 16 months, including one Northeast Portland man who later died from his injuries and a 12-year-old girl who suffered multiple broken bones after leaping from a second floor apartment building rocked by a butane explosion. During just the first nine months of 2014, Colorado reported that there were 31 butane hash oil explosions in homes across the State. A 2015 news article reported that at two Northern California burn treatment centers, injuries from BHO explosions accounted for eight to ten percent of severe burn cases, which represents a larger percentage than from car wrecks and house fires combined.
The manufacture of BHO is met by an unregulated and largely underground industry that plays out in garages, basements and kitchens. In this type of setting a spark from something as ordinary as a refrigerator compressor can set off a fiery explosion. Puretane’s butane was marketed specifically for use in the unregulated manufacture of BHO. For example, in October 2014, High Times, a drug culture magazine, featured an article describing Puretane’s butane as “designed specifically for the needs of BHO makers.” Puretane posted a link to the High Times article on its website and social media accounts. Similarly, in January 2015, Puretane hosted a contest, in which it offered a case of Puretane butane to the contestant who could manufacture the highest quality BHO.
Puretane sold its butane in 300 ml canisters for approximately $4-5 per canister to retailers throughout the United States, including to at least 25 retailers in San Diego County such as Raw Smokeshop, Dr. Green’s Ink, and Holy Smoke. From just the period of February to August 2015, Puretane sold more than 400,000 canisters of their butane to retailers.
As part of their pleas, Tandberg and Hopkins agreed to forfeit the money remaining in their corporate bank account and over 66,000 canisters of Puretane butane. Tandberg and Hopkins will appear for sentencing on May 27, 2016, at 8:30 a.m. before U.S. District Judge Gonzalo P. Curiel.
DEFENDANTS: Case Number 16-CR-460-GPC
Michael Tandberg Age: 54 Newport Beach, CA
Case Number 16-CR-461-GPC
Adam Hopkins Age: 45 Santa Monica, CA
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
AGENCY
Homeland Security Investigations
Founders of Film School for Wounded Veterans Sentenced to PrisonRead the Press Release
Assistant U.S. Attorneys Eric J. Beste (619-546-6695) and Rebecca S. Kanter (619-546-7304)
NEWS RELEASE SUMMARY – March 10, 2016
SAN DIEGO – Judith Paixao and Kevin Lombard, a husband and wife who embezzled federal funds from the Wounded Marine Careers Foundation that were intended to provide job training, benefits and equipment for injured Marines returning from Iraq and Afghanistan were sentenced today, following a July 2015 jury trial.
Paixao was sentenced to six months’ custody and six months’ home confinement; her husband, Lombard, was sentenced to three months’ custody followed by three months’ home confinement. In addition to these custodial sentences, the Court ordered the defendants to pay $150,000 in financial penalties and restitution.
At the hearing, Judge Jeffrey T. Miller, the district court judge who presided over the trial and imposed the sentences, denied the defendants motion for a new trial or judgment of acquittal. In doing so, Judge Miller observed that “whatever commendable vision served to launch the Foundation, that idealism spawned theft, embezzlement and worse.” He noted that there were several “tells,” i.e. facts which created the “lens through which the jury viewed the evidence in this case.” These “tells” included their continuous misrepresentations of donating hundreds of thousands of dollars to the Foundation from the sale of their home, which they actually had lost to foreclosure. Another “tell” related to the defendants’ misrepresentations regarding high-end video cameras acquired by the Foundation and billed to the Department of Veterans Affairs (“VA”) at “bogus” inflated costs.
From 2007-2009, Paixao and Lombard were directors of the Wounded Marine Careers Foundation (“the Foundation”), a tax-exempt entity that trained injured veterans for careers in the film industry. They used the Foundation to defraud the VA and submit false claims to the VA in order to get funds for training and equipment they never provided. Adding insult to injury, the defendants also embezzled funds from the Foundation for their own use.
As detailed in their trial, the defendants made numerous false and misleading statements to the VA in order to obtain funds for training and equipment, and then did not provide all the training or equipment to the veterans. Although the defendants claimed to have donated over $200,000 to start the Foundation, they ended up taking over $400,000 from the Foundation’s accounts over the course of two years.
Rather than paying the Foundation’s creditors (some of whom were members of the Foundation’s Board of Directors), the defendants transferred funds to their own personal credit cards and bank accounts. Although some of this money went to repay expenses they had fronted to the Foundation, evidence presented at trial showed that the defendants ended up taking over $100,000 for themselves. The defendants then used these funds to pay for a variety of personal expenses, including a family vacation in Bermuda; cell phone bills, car insurance and gifts for their family members; prescription medications and counseling costs; wine and dinners for two; and the costs of a New Year’s Day sailing trip around San Diego Bay.
U.S. Attorney Laura Duffy emphasized that “the fraud committed by these defendants - who used money set aside to help wounded veterans and spent it on themselves - was particularly offensive. These defendants capitalized on the misfortune of wounded marines in their time of vulnerability and took advantage of the VA’s commitment to serving wounded veterans to defraud the VA and enrich themselves. War profiteering which takes advantage of our veterans is not in any way, shape or form acceptable.”
The defendants routinely commingled the finances of the Foundation with their personal finances, thereby obstructing the ability of the Internal Revenue Service to monitor the Foundation’s tax-exempt status and determine the defendants’ personal income tax liability.
Among the witnesses who testified at trial were three of the injured veterans who used their vocational rehabilitation benefits to participate in the first training class: Gunnery Sergeant Nick Popaditch and Lance Corporal Joshua Frey. Lance Corporal Frey, who had previously been quoted in a favorable New York Times article, testified at trial that after the article was published the defendants did not give him all the equipment he was promised, and failed to provide him with certain training and job placement.
The trial evidence also showed that Defendant Paixao defrauded the Bob Woodruff Foundation in connection with a restricted grant of almost $100,000 by concealing the fact that one of the intended recipients – a Marine who had been injured in Fallujah – had left the program. Instead of notifying the Bob Woodruff Foundation and asking for a reallocation of the funds, Ms. Paixao took the grant money and used it for other purposes.
In explaining the reason for imposing custodial sentences well below the advisory sentencing guideline range, Judge Miller identified the unique characteristics of each defendant, including their extraordinary community support (including from many members of the military), the low risk of recidivism, and the court’s assessment that the defendants “began with a vision or goal that was worthy” when they first reached out to wounded Marines. Despite these mitigating factors, the Court observed that the defendants “deserved to be prosecuted,” and this case served as important deterrent against those who would be tempted to victimize charitable institutions, their donors or their beneficiaries.
Douglas J. Carver, Special Agent in Charge, VA OIG Western Region stated, “Fraud schemes capitalizing on the misfortune of wounded veterans are particularly egregious. The VA Office of Inspector General will continue to vigorously pursue those who defraud veterans and the Government for personal gain. It is our hope that the successful investigative and prosecutive efforts in this case will serve as a deterrent to others from engaging in criminal activity that cheats veterans and the VA programs designed to assist our nation’s heroes.”
“Today’s sentencing of Kevin Lombard and Judith Paixao sends a clear message that fraud against our veterans will not be tolerated. These veterans endured many sacrifices to protect our country from harm,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. He further added, “IRS Criminal Investigation, in conjunction with our law enforcement partners, is committed to identifying, investigating, and prosecuting individuals who engage in fraud and deceit, and exploit programs designed to benefit others to satisfy their greed.”
DEFENDANTS
Case Number: 13cr3788-JM
Judith Ann Paixao
Age: 61
Afton, Virginia
Kevin Lombard
Age: 64
Afton, Virginia
CHARGES
Count 1: Conspiracy to defraud the United States and commit the offenses (18 U.S.C. § 371).
Guilty as to both defendantsCounts 2-9: Theft from an organization receiving federal funds (18 U.S.C. § 666(a)(1)).
Defendant Paixao: Guilty as to all counts
Defendant Lombard: Guilty on counts 2-4, 6-10Counts 10-12: False claims (18 U.S.C. § 287)
Guilty as to all counts for both defendantsCount 13: Mail fraud (18 U.S.C. § 1341)
Defendant Paixao: GuiltySENTENCES
PAIXAO – 6 months’ custody on all counts, 2 years’ supervised release with a condition of 6 months’ home confinement on all counts, concurrent; $1,300 special assessment; $75,956 restitution ($54,688 to VA and $21,268 to Bob Woodruff Foundation); $76,873 forfeiture
LOMBARD – 3 months’ custody on all counts, 2 years’ supervised release with a condition of 3 months’ home confinement on all counts, concurrent; $1,100 special assessment; $54,688 restitution to VA; $70,873 forfeiture
INVESTIGATING AGENCIES
Department of Veterans Affairs, Office of Inspector General
Internal Revenue Service, Criminal InvestigationFederal Jury Finds Man Guilty of Conspiracy and Theft of Brass Shell Casings from Marine Corps Base Camp PendletonRead the Press Release
Assistant U.S. Attorney Janet Cabral (619) 546-8715 and Michelle Pettit (619) 546-7972
NEWS RELEASE SUMMARY – March 9, 2016
SAN DIEGO - A federal jury has found John Vescuso guilty of theft of government property and conspiracy to sell and dispose of more than $500,000 of brass shell casings from Marine Corps Base Camp Pendleton from April 2010 to June 2012.
According to testimony and evidence presented at trial, Vescuso conspired with a former civilian employee on board Camp Pendleton, Cecil Garr, to remove the brass shell casings and other types of scrap metal from the School of Infantry’s hazardous materials lot, and to sell those materials for $555,640 over the two-year time period. The jury returned its verdict on Monday.
Vescuso, who was engaged in the business of recycling scrap metal, paid Garr cash to remove expended brass shell casings from the hazardous materials lot using his personal vehicles. Subsequently, he made arrangements directly with an Orange County, California, scrap metal company to place roll-off containers in the lot to collect the brass shell casings and other scrap metal. Once those containers were full, Vescuso contacted the scrap metal company to retrieve the containers from Camp Pendleton. Vescuso then collected payment directly from the scrap metal company and shared those proceeds with Garr, resulting in a substantial loss to the United States Marine Corps.
Prior to the trial against Vescuso, Garr pleaded guilty to conspiring with Vescuso to steal the more than $500,000 in brass shell casings from Camp Pendleton.
The investigation of the theft was a joint effort between the Naval Criminal Investigative Service (NCIS) and Defense Criminal Investigative Service (DCIS).
“It is unfortunate that anyone would try to take advantage of the military resources that are so important to our community and to our national security,” said U.S. Attorney Laura Duffy. “We will continue to do our part to ensure the military bases in our community are safe and secure from those who want to cause harm to the mission of the Armed Forces.”
Chris Hendrickson, DCIS Special Agent in Charge for the Western Field Office, said, “America's warfighters deserve the very best to perform their jobs and the taxpayers expect nothing less. Theft of USMC resources takes away precious dollars necessary for the dedicated American warfighter. This guilty verdict should serve as a warning for those intent on defrauding the U.S. military and American public that the Defense Criminal Investigative Service (DCIS) and our law enforcement partners will pursue these crimes relentlessly.”
“The Department of Defense has strict policies and procedures in place to ensure that all property and scrap materials generated during military training are recycled or reused for the benefit of our Armed Forces,” said Charles Warmuth, NCIS Special Agent in Charge for the Marine Corps West Field office. “In this case, the Marine Corps at Camp Pendleton and the taxpayers saw a loss of over a half a million dollars on board Marine Corps Base Camp Pendleton due to the greed of two individuals. NCIS, in partnership with DCIS, worked tirelessly to ensure these individuals were brought to justice. Theft of government property will not be tolerated, and NCIS will continue to investigate and aggressively prosecute all individuals who attempt to engage in this type of criminal activity.”
The defendant is scheduled to appear for sentencing before U.S. District Judge Thomas J. Whelan on June 13, 2016.
DEFENDANT Criminal Case No. 14CR2863-W
John Vescuso Age: 40 Wildomar, California
SUMMARY OF CHARGE
Count 1: Title 18, United States Code, Section 371: Conspiracy to Commit the Offense of Theft of Government Property.
Counts 2-4: Title 18, United States Code, Section 641: Theft of Government Property.
Maximum penalties: 10 years’ prison and a $250,000 fine.
INVESTIGATING AGENCIES
Naval Criminal Investigative Service
Defense Criminal Investigative Service
Chula Vista Woman Admits Stealing More Than $164,000 from IRSRead the Press Release
Assistant U.S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – March 9, 2016
SAN DIEGO – Cecilia Hernandez pleaded guilty Tuesday to stealing more than $164,000 from the Internal Revenue Service – despite owing the agency for back taxes that she had failed to pay.
Hernandez admitted that she sent the IRS more than a half million dollars in worthless checks written on closed accounts. The checks were ostensibly intended to pay off a tax debt which Hernandez owed from previous years. The checks (written in 2011 and 2013) were for amounts far greater than the tax debt and triggered a series of fraudulent refunds. In all, Hernandez wrote more than $525,000 in bad checks to the IRS, which resulted in her obtaining over $164,000 in the form of fraudulent refunds. Among other things, Hernandez spent her illicit proceeds on a $33,000 Chrysler 300 and an extravagant Quinceañera for her daughter costing more than $40,000.
As part of her plea, Hernandez agreed to restitution of the funds stolen from the IRS. Hernandez will appear for sentencing on June 14, 2016 at 9:00 a.m. before U.S. District Judge Anthony J. Battaglia.
DEFENDANT: Case Number 16CR247-AJB
Cecilia Hernandez Age: 46 Chula Vista, CA
SUMMARY OF CHARGES
Title 18, United States Code, Section 641-Theft of United States’ Money
AGENCIES
Internal Revenue Service
Alleged Sinaloa Cartel Trafficker Victor Emilio Cazares Gastellum Extradited to the U.S.Read the Press Release
Assistant U. S. Attorney Michael Kaplan (619) 546-7927
NEWS RELEASE SUMMARY – March 7, 2016
SAN DIEGO – Alleged drug kingpin Victor Emilio Cazares Gastellum, who for years was one of the United States’ most-wanted Mexican drug trafficking suspects, was extradited on Friday and arraigned in federal court in San Diego this morning on drug conspiracy and money laundering charges.
Cazares, also known as “El Licenciado,” was indicted by a federal grand jury in San Diego in 2007, along with 18 of his suspected lieutenants and foot soldiers. According to the indictment, Cazares' organization shipped multi-ton quantities of drugs from Colombia and Venezuela through Central America to Mexico. The narcotics were then smuggled across the Southwestern border and he and others distributed the drug throughout the United States.
The United States issued a provisional arrest warrant for Cazares following his indictment, and the U.S. Department of State offered a reward of up to $5 million for information leading to his arrest and/or conviction. Cazares was captured by Mexican authorities about five years later, on April 8, 2012, at a highway checkpoint near the western city of Guadalajara.
Until his arrest, Cazares was believed to be aligned with Joaquin “Chapo” Guzman, former leader of the Sinaloa drug cartel, one of the most notorious and violent drug trafficking organizations operating in Mexico. The Sinaloa Cartel imports and distributes hundreds of tons of cocaine, methamphetamine, and marijuana into the United States each year.
The indictments were announced at a news conference in San Diego by then –Attorney General Alberto Gonzales. The 22-month sting, code-named “Operation Imperial Emperor,” resulted in the nationwide arrests of 402 people suspected of working for the cartel, more than $45 million in cash and tons of cocaine, heroin and marijuana.
During today’s hearing before U.S. Magistrate Judge David Bartick, the defendant was ordered detained without bail. His next court hearing is scheduled for April 4, 2016 at 9 a.m. before U.S. District Court Judge William Q. Hayes.
DEFENDANT Case Number: 07CR0449
Victor Emilio Cazares Gastellum Age: 52
SUMMARY OF CHARGES
Conspiracy to Import Controlled Substance, in violation of Title 21, U.S.C., Secs. 952, 960, and 963; Maximum penalty- Life
Conspiracy to Distribute Controlled Substance, in violation of Title 21, U.S.C., Secs. 846 and 841(a)(1); Maximum penalty- life
Engaging in a Continuing Criminal Enterprise, in violation of Title 21, U.S.C. Sec. 848(b); Maximum penalty- Life
Conspiracy to Launder Money, in violation of Title 18, U.S.C., Secs. 1956(a)(2)(A) and 1956(h); Maximum penalty 20 years
AGENCY
Drug Enforcement Administration
El Centro Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Retired Marine Pleads Guilty to Fatally Stabbing his Girlfriend, Dismembering her Body with a Machete and Dumping her Remains in the Panamanian JungleRead the Press Release
Assistant U.S. Attorneys W. Mark Conover (619) 546-6763 or Shane P. Harrigan (619) 546-6981
NEWS RELEASE SUMMARY – February 24, 2016
SAN DIEGO – Over four years after the disappearance and death of Yvonne Baldelli, Brian Karl Brimager pleaded guilty in federal court today to her murder, admitting that he fatally stabbed Baldelli in the back with a knife, dismembered her body with a machete and disposed of her remains in a remote jungle on the Panamanian island where they lived as a couple for two months. Baldelli’s skeletal remains were discovered by a Panamanian citizen approximately 21 months after her murder.
Brimager pleaded guilty before U.S. District Judge Jeffrey T. Miller to an information charging him with Foreign Murder of a United States National. In his guilty plea, Brimager also admitted that after he murdered Baldelli, he obstructed the investigation into her murder by destroying, concealing and disposing of evidence, including a blood-stained mattress and Baldelli’s dog, clothes and jewelry; accessing Baldelli’s email account after her murder and impersonating Baldelli in emails sent from her account to friends and family; withdrawing money from Baldelli’s bank account in Costa Rica after her death; and providing false statements to a federal agent – all in an attempt to make it seem as though Baldelli were alive and well and traveling with another man in Costa Rica.
As a result of his guilty plea, Brimager faces up to life in prison. Brimager has been in federal custody since June 2013. A sentencing hearing before Judge Miller is scheduled for May 25, 2016 at 10 a.m.
“Brian Brimager took a young woman’s life in a heinous way and then further victimized her family by creating a cruel lie that she was happily traveling the world with another man,” said U.S. Attorney Laura Duffy. “Now that Brimager has finally admitted his crime, we hope that the truth, and knowing that their daughter’s murderer will serve decades in prison, will give this grieving family a sense of justice and peace.”
Duffy added: “This prosecution was made possible by the hard work and dedication of the FBI Offices in San Diego and Panama, our colleagues in the Department of Justice, the U.S. Mission in Panama City, and most notably, the cooperation and assistance of the Panamanian Government, whose police and prosecutors enabled our office to bring this prosecution by providing access to witnesses and evidence.”
“Mr. Brimager's guilty plea is another step in obtaining justice for the victim in this case, Yvonne Baldelli,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI will continue to work with the U.S. Attorney's Office and our international law enforcement partners to obtain justice for Ms. Baldelli and hold Mr. Brimager accountable for her brutal murder.”
DEFENDANT Case Number: 13CR2381-JM
Brian Karl Brimager Age: 39
SUMMARY OF CHARGE
Foreign Murder of a United States National – Second Degree, Title 18, United States Code, Sections 1119 and 1111; Maximum Penalties: Life imprisonment, $250,000 fine, restitution
AGENCIES
Federal Bureau of Investigation, San Diego Division and Panama City Legal Attaché Office
U.S. Embassy, Panama City
Office of International Affairs, U.S. Department of Justice
Human Rights and Special Prosecution Section, U.S. Department of Justice
San Diego Man Who Stole Thousands of Pounds of Copper Wire from Midway Post Office SentencedRead the Press Release
Assistant U. S. Attorney Meghan E. Heesch (619) 546-9442
NEWS RELEASE SUMMARY – February 23, 2016
SAN DIEGO – James Stephen Dudley, who caused over $100,000 in damage to the Midway Post Office by breaking in and stealing copper wire, has been sentenced to 30 months in custody. U.S. District Court Judge Janis L. Sammartino also ordered Dudley to pay back the U.S. Postal Service for the cost to repair the building damages as restitution.
Dudley was charged in October 2015 with theft of government property, theft of postal service property, and forcibly breaking into a post office with intent to commit larceny after U.S. Postal Inspectors saw him break into the Midway Post Office located at 2535 Midway Drive on September 16, 2015. According to court records, Dudley had cut the lock on the fence of the Post Office to get inside.
After spending several hours in the Post Office stripping copper wire in the middle of the night, Postal Inspectors saw Dudley drive his vehicle onto Postal property and load approximately 673 pounds of copper wire inside it. Dudley was arrested but had planned to scrap the copper wire from the Post Office for cash as he had done on at least five prior occasions during 2015. Dudley pleaded guilty to theft of government property in December 2015.
Judge Sammartino, in sentencing Dudley on February 19, 2016, ordered him to pay restitution to the U.S. Postal Service for the full amount of the damage to the Midway Post Office, $123,984.08.
U.S. Attorney Laura Duffy said, “This office is committed to protecting the integrity of government buildings which ensures the employees who serve the public have a safe place to do their important work.”
“Today's sentence should send a clear message,” said Los Angeles Postal Inspector in Charge Robert Wemyss. “The Postal Inspection Service will not tolerate attacks on our facilities. Postal Inspectors will aggressively investigate these cases and bring the thieves to justice.”
DEFENDANT Case Number 15cr2685-JLS
James Stephen Dudley Age 40
SUMMARY OF CHARGES
Title 18, United States Code, Section 641 (theft of government property) - Maximum penalty: 10 years in prison; $250,000 fine
Title 18, United States Code, Section 1707 (theft of postal service property) - Maximum penalty: 3 years in prison; $250,000 fine
Title 18, United States Code, Section 2115 (forcibly breaking into a post office with intent to commit larceny) - Maximum penalty: 5 years in prison; $250,000 fine
AGENCIES
U.S. Postal Inspection Service
San Diego Police Department