Southern District of California

Assistant U.S. Attorneys Valerie Chu (619) 546-6750 and Melanie Pierson (619) 546-7976

Press Conference Photos click HERE

Complaints: Castaneda Complaint
Chung Complaint
Xie Complaint
Zhen Complaint

Indictments: Xie Indictment

When Song Shen Zhen came through a border crossing in Calexico recently, an officer noticed something under the floor mats in the back seat. But the plastic grocery bags he found weren’t filled with typical border contraband.

They contained 27 dried swim bladders taken from the endangered Totoaba macdonaldi fish. The Totoaba’s large swim bladder – which is an internal gas-filled organ that helps a fish control its buoyancy - is highly prized for use in Chinese soups and is considered a very expensive delicacy. But because the species is federally-protected in both the U.S. and Mexico, it’s illegal to take, possess, transport or sell Totoaba.

On Friday, Zhen became the seventh person charged by the U.S. Attorney’s Office with Totoaba smuggling since February, when border officers first started noticing the rare fish under floor mats and concealed in coolers in the vehicles of border crossers.

The Southwestern border is most often associated with the highly lucrative drug- and people-smuggling trades. But there is another smuggling category of increasing concern to authorities – trafficking of endangered wildlife, with a black market that is potentially valued in the millions of dollars.

In the Zhen case, Customs and Border Protection officials seized 27 bladders and turned them over to a U.S. Fish and Wildlife Service agent (FWS), and the rest were returned to Zhen, who was allowed to leave. But unknown to Zhen, agents kept him under surveillance and followed him to his home in Calexico. Once they obtained a search warrant, they discovered that the house was sparsely furnished and appeared to be set up as a Totoaba factory.

In the hallways and rooms of the house, Totoaba swim bladders were laid out in rows to dry, with fans positioned to blow air over them. There was were ledgers, packing materials and other evidence consistent with the shipment of Totoaba swim bladders overseas.

Agents found an additional 214 swim bladders at the house, bringing Zhen’s total to 241, according to court documents. Agents estimated that if sold into foreign markets, the 241 Totoaba bladders could conservatively be worth more than $3.6 million. Black market value in the U.S. is about $5,000 per bladder and $10,000-plus in certain foreign Asian markets.

In the Chinese culture, the fish swim bladder is referred to as “fish maw” and may also come from a variety of non-endangered fish. Totoaba fish maw is valued for its high collagen content and some people believe the Totoaba swim bladders can boost fertility and improve circulation and skin vitality. Besides the soup, Totoaba meat is also used for food.

Zhen is the most recent example of Totoaba smuggling cases. In all, federal officials have charged seven defendants in what are currently believed to be unrelated cases, and have seized 529 bladders since February, and the season is only halfway over. The bladders were tested by the U.S. Fish and Wildlife Service’s (FWS) forensic lab to confirm species identification through DNA analysis.

In recent years, prosecutors have brought cases involving everything from endangered iguana meat to shark fins.

“Earth Week reminds us all of the importance of protecting our precious resources,” said U.S. Attorney Laura Duffy. “Our nation’s laws prevent plundering and poaching for financial gain. We intend to enforce those laws with passion.”

“One of the highest priorities of the USFWS Office of Law Enforcement is to investigate individuals and companies that are involved in the unlawful commercial trafficking and smuggling of protected animals and plants here and around the world. Many species, including Totoaba, are teetering on the brink of extinction due to poaching to supply the illegal wildlife trade. While we may never know how many Totoaba bladders were harvested illegally, such disregard for the protections that were put in place to benefit this endangered species could have a disastrous effect on the fish population,” said Deputy Chief Edward Grace.

“HSI agents are committed to using our investigative authorities and resources to combat all forms of illegitimate cross border trade,” said Derek Benner, special agent in charge for HSI San Diego. “Not only did this investigation stop the exploitation of an endangered species for financial gain, but it exposed the illicit smuggling pathways and networks used to bring these specimens into the country and beyond.”

“This is a great example of the continued diligence of CBP officers and agriculture specialists at ports of entry in California,” said Pete Flores, CBP director of field operations for the San Diego and Imperial Counties. “In addition to protecting our country from narcotics and stopping violators of immigration law, CBP officers and agriculture specialists have disrupted this criminal enterprise’s attempts to profit from the illicit trade of this endangered species.”

Totoaba macdonaldi is the largest species in its genus, which includes California white sea bass and corvina. It can grow to more than 6 feet in length, weigh up to 220 pounds, and can live up to 25 years. Totoaba – pronounced Toe-TWAH-bah - are endemic only to the Gulf of California, the narrow inlet between Baja California and Mexico’s mainland (also called the Sea of Cortez). This fish can be identified by its dusky silver color, elongated body, sharp snout, a projecting lower jaw, and a slightly convex tail.

During their winter migration, schools of adult Totoaba travel northward along the east coast of the Gulf of California to the Colorado River delta, where they remain for weeks before spawning in the spring. The Totoaba’s spawning season runs from approximately March to May each year. During this time, Totoaba travel to the shallower waters at the mouth of the Colorado River, making them vulnerable to commercial and sport fishermen.

While the Totoaba were once abundant in the Gulf of California, and even at one point constituted the second most important commercial fish for Mexico, their populations have declined drastically due to overfishing, pollution and diversion of waters from the Colorado River.

The bladders are removed from the fish, dried, and often exported from Mexico to other countries. In some instances, the fish are taken from the Colorado River, carved open so their swim bladders can be removed, and discarded on the shores.

The Totoaba was included in the most protected list of species covered by the Convention on International Trade in Endangered Species (CITES, Appendix I) in 1977, and was listed as endangered under the Endangered Species Act in 1979. Mexico included it on its list of species In Danger of Extinction in 1994. Both Mexico and the United States are signatories to CITES. It is a violation of law in both countries to trade in Totoaba or any part of a Totoaba.

Despite the protection, the species has shown minimal recovery. Unique biological traits, such as its limited geographic range and vulnerability during spawning, along with external pressures of habitat degradation and overfishing, have pushed the species to the brink of extinction.

The U.S./Mexico ports of entry closest to the Sea of Cortez are in Calexico and Andrade, California and San Luis, Arizona. During the period from February 16 to April 13, 2013, border inspectors in Calexico have seized approximately 483 pounds of Totoaba, representing the swim bladders of over 500 endangered fish.

Other Totoaba smuggling cases since February:

-Defendant Oi “Sean” Chung is charged with smuggling 11 swim bladders into the U.S. on February 27th and 30th.

-According to a complaint, defendant Anthony Sanchez Bueno drove into the United States from Mexico on March 30 with three coolers which contained a top layer of fish fillets, concealing 170 Totoaba swim bladders (225 lbs). Only the fish fillets were declared. The swim bladders measured approximately 18 inches in length, which corresponds to a fish size of at least four feet in length. The complaint alleged that undercover agents delivered the coolers to defendant Jason Xie, who was waiting in a hotel parking lot in Calexico. At the time of delivery, Xie acknowledged that the swim bladders were Totoaba. After advisement of his Constitutional rights, Xie stated that he had purchased an earlier load of swim bladders from the same individual in February, and paid $1,500-$1,800 per swim bladder, and there were approximately 100. A subsequent indictment of Xie and Sanchez seeks to forfeit $350,000 in proceeds from the sale of Totoaba.

-On April 1, a defendant in another unrelated case, Raquel Castaneda, attempted to smuggle 28 Totoaba swim bladders into the U.S., but was thwarted by inspectors, according to court documents.

-Two defendants whose names are not being released because they are still at large.

Criminal Case No. 13MJ1556

DEFENDANTS
Song Shen Zhen

SUMMARY OF CHARGES
Smuggling, in Violation of Title 18, United States Code, Section 545. Maximum Penalties: 20 years in custody, $250,000 fine, supervised release of up to 3 years, $100 special assessment.

Unlawful Importation of Wildlife, in Violation of Title 16, United States Code, Sections 3372 and 3373 Maximum Penalties: 5 years in custody and $250,000 fine, $100 special assessment.

Criminal Case No. 13MJ1482

DEFENDANTS
Oi “Sean” Chung

SUMARY OF CHARGES
Smuggling, in Violation of Title 18, United States Code, Section 545. Maximum Penalties: 20 years in custody, $250,000 fine, supervised release of up to 3 years, $100 special assessment.

Unlawful Importation of Wildlife, in Violation of Title 16, United States Code, Sections 3372 and 3373 Maximum Penalties: 5 years in custody and $250,000 fine, $100 special assessment.

Criminal Case No. 13CR1311-CAB

DEFENDANTS
Jason Jin Shun Xie
Anthony Sanchez Bueno

SUMMARY OF CHARGES
Conspiracy, in Violation of Title 18, United States Code, Section 371. Maximum Penalties: 5 years in custody and/or $250,000 fine, $100 special assessment.

Smuggling, in Violation of Title 18, United States Code, Section 545. Maximum Penalties: 20 years in custody, $250,000 fine, supervised release of up to 3 years, $100 special assessment.

Unlawful Importation of Wildlife, in Violation of Title 16, United States Code, Sections 3372 and 3373 Maximum Penalties: 5 years in custody and/or $250,000 fine, $100 special assessment.

Forfeiture, in Violation of Title 18, United States Code, Section 982.

Criminal Case No. 13mj8242

DEFENDANTS
Raquel Castaneda

SUMARY OF CHARGES
Smuggling, in Violation of Title 18, United States Code, Section 545. Maximum Penalties: 20 years in custody, $250,000 fine, supervised release of up to 3 years, $100 special assessment.

Unlawful Importation of Wildlife, in Violation of Title 16, United States Code, Sections 3372 and 3373 Maximum Penalties: 5 years in custody and $250,000 fine, $100 special assessment.

AGENCIES
U.S. Fish and Wildlife Service
Homeland Security Investigations
U.S. Customs and Border Protection

Other Recent Cases of Environmental Significance in the Southern District of California:

-On August 5, 2012, Alberto SIERRA-Ochoa entered the U.S. through the Otay Mesa Port of Entry with approximately 77 pounds of raw iguana meat that was undeclared when he entered from Mexico. The U.S. Attorney’s Office of the Southern District charged Sierra-Ochoa with one count of smuggling. Sierra-Ochoa pled guilty to that charge.

-On June 6, 2011, Eliodor SORIA-Fonseca illegally imported approximately 159 pounds of iguana meat from Mexico through the Otay Mesa Port of Entry. The iguana meat was found hidden inside coolers that SORIA-Fonseca declared to Customs and Border Protection officers as fish. SORIA-Fonseca was indicted for one count of smuggling and one count of violation of the Endangered Species Act. SORIA-Fonseca pled guilty to one count of smuggling on September 27, 2011 and was sentenced to two years of imprisonment, followed by three years of supervised release.

-On December 21, 2011, a 54-year-old female Mexican citizen entered the San Ysidro port of entry as a pedestrian and was asked to place her belongings through an x-ray machine. An agriculture specialist noticed that two of the woman’s bags had what appeared to be shark fins. A special agent with the National Oceanic and Atmospheric Administration (NOAA) responded to the port, took custody of 29 pounds of shark fins, and issued a citation to the woman for violation of the Lacey Act. Customs and Border Protection cancelled the woman’s visa and she was returned to Mexico.

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

El Centro, CA - United States Attorney Laura E. Duffy announced the arraignment this afternoon of Damian C. Mora on an indictment charging him with one count of possession of images of minors engaged in sexually explicit conduct, in violation of Title 18, United States Code, Section 2252(a)(4)(b), a felony.

According to the criminal complaint filed earlier in the case, the defendant posted about collecting photographs of minors engaged in sexually explicit conduct on a website relating to the sexual exploitation of children and also posted about his sexual interest in children. According to the complaint, the defendant’s collection included depictions of children, as young as one to two years of age, sexually exploited by adults.

The defendant was arrested by Immigration and Customs Enforcement, Homeland Security Investigations agents on April 9, 2013, in El Centro, California. Anyone with information relating to the charges against this defendant is urged to call 760 335 5389 and leave a confidential message, which will be returned by special agents investigating this case.

The public is reminded that an indictment is not evidence that the defendant committed the crime charged. The defendant is presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.

This case stems from an investigation by the Department of Homeland Security, Immigration and Customs Enforcement’s Homeland Security Investigations.

DEFENDANT   Case Number: 13cr1471JM Damian C. Mora       SUMMARY OF CHARGES

Title 18, United States Code, Section 2252(a) (4) (Possession of Child Pornography)
Maximum Penalties: 10 years’ incarceration, $250,000 fine, a minimum of 5 years and up to a lifetime of supervised release and registration as a sex offender.

  INVESTIGATING AGENCY

Immigration and Customs Enforcement’s Homeland Security Investigations

United States Attorney Laura E. Duffy announced that a Julian resident pled guilty today to the unlawful taking of a golden eagle, in violation of the Bald and Golden Eagle Protection Act, before the Honorable David H. Bartick, United States Magistrate Judge. “Take” in this instance involved collection of the bird for banding without the required permit.

At the time of the plea, wildlife researcher John David Bittner acknowledged that he makes his living conducting studies of birds and wildlife. His work includes the capture and banding of eagles and other migratory birds, and the tracking of their movements. Bittner had possessed a federal bird banding permit, which expired on January 31, 2010. In mid-February, 2010, he asked the USGS Bird Banding Laboratory to renew his permit. The Bird Banding Lab advised Bittner that he was not in compliance with his permit as he had not reported any data for the birds he had banded since October 31, 2006 and thus, his permit would not be renewed until he submitted the delinquent data. These data provide the USGS and the U.S. Fish and Wildlife Service valuable information about the health and distribution of the eagle population in the United States. For the period from January 31, 2010, through August 12, 2010, Bittner possessed no permit to capture and band eagles or any other migratory bird. In pleading guilty, Bittner admitted that during this period, he captured and banded 144 migratory birds in southern California, including at least one female golden eagle, knowing that he had no permit to do so.

Historically, the breeding range of the golden eagle included most of North America, but today the species occurs primarily in the Western United States where it nests and winters from Alaska south to central Mexico. In some western states, golden eagles are year-round residents in breeding territories.

The golden eagle is a Bird of Conservation Concern throughout most of its western range. In the early 1970s, the estimated North American population was approximately 100,000. The current population estimate for the United States and Canada is 80,000, with documented declines in western states. Golden eagle populations are primarily impacted by habitat loss, collisions with transmission lines and increasingly with wind turbines, ingestion of lead and other contaminants, and disturbance of nest and brooding sites.

The Bald and Golden Eagle Protection Act prohibits anyone from taking, possessing, or transporting a bald eagle or golden eagle, or the parts, nests, or eggs of such birds without prior authorization. Take means to pursue, shoot, shoot at, poison, wound, kill, capture, trap, collect, destroy, molest, or disturb. Activities that directly or indirectly lead to take are prohibited without a permit. Such restrictions help ensure the future viability of eagles in the wild.

United States Attorney Laura E. Duffy said, "It is a sacred trust to preserve our natural heritage for future generations. This trust mandates that we observe both the spirit and letter of laws designed to protect the environment."

Bittner is scheduled to be sentenced on July 11, 2013 at 1:30 a.m. before Judge Bartick.

Case Number: 13cr1391-W DEFENDANT     John David Bittner       SUMMARY OF CHARGES

Unlawful Taking of a Golden Eagle, in Violation of Title 16, United States Code, Section 668(a).
Maximum Penalties: 1 year in custody and/or $100,000 fine, $25 special assessment.

  AGENCY

U.S. Fish and Wildlife Service

United States Attorney Laura E. Duffy announced that Lloyd Irvin Taylor was arraigned in federal court today on an indictment charging him with three counts of making false statements on passport applications.

According to the indictment, Taylor made a host of false statements on each passport application, including: his true name, place of birth, date of birth, social security number, father's name, father's birthplace, father's birth date, mother's maiden name, mother's birthplace, mother's birth date, and applicant's signature. This false information was derived from over a half dozen identities that Taylor stole from other people. These stolen identities included children who died in the early 1950's.

During Taylor's bond hearing, Assistant U.S. Attorney Peter J. Mazza informed Magistrate Judge Barbara L. Major that Taylor had traveled extensively on the fraudulent passports at issue in the present case. Among other things, Mazza told the Magistrate Judge that Taylor maintained nearly two dozen bank accounts in the names of his various aliases. In addition, Mazza discussed how Taylor also maintained bank accounts in the names of purported religious entities with either himself or one of his aliases as the signatory on the church accounts. Finally, he added that the government had recently seized approximately $1.8 million in gold.

In ordering Taylor detained without bond, Magistrate Judge Major noted the numerous different stolen identities from deceased children, the number of bank accounts under various names, and the defendant's considerable assets. The Magistrate Judge concluded that Taylor was a flight risk.

United States Attorney Laura E. Duffy praised the work of investigators who diligently pieced together Taylor's criminal activities. "Our office remains committed to protecting the sensitive personal information of our citizens. As today's indictment makes clear, stolen identity information can be misused in a variety of ways, including to do things like obtain fraudulent passports, which is a matter of national security."

“Identity theft is a serious crime, whether committed electronically or by deliberately provided false information,” said Gregory Meyer, Special Agent in Charge of the United States Secret Service in San Diego. “Through the San Diego Regional Fraud Task Force, the Secret Service and its partners combine the resources of local, state and federal agencies with the private sector to combat a wide range of financial and identity crimes. The success of this investigation is an example of how well our partnerships work.”

“The success of this investigation and enforcement operation demonstrates that the Department of State and the Diplomatic Security Service are committed to protecting the integrity of U.S. passports and visas, the most sought after travel documents in the world,” said Gregory B. Starr, Director of the Diplomatic Security Service.

The defendant is due next in court on May 20, 2013, before Judge Michael M. Anello for a motion hearing.

DEFENDANT   Criminal Case No. 13CR1390-MMA Lloyd Taylor       SUMMARY OF CHARGES

Counts 1-3: Title 18, United States Code, Section 1542 B Making a False Statement on a United States Passport Application. Maximum penalties (per count): 10 years custody; $250,000 fine; $100 Special Assessment; 3 year supervised release.

  INVESTIGATING AGENCIES

San Diego Regional Fraud Task Force: - United States Secret Service
- San Diego Police Department
- San Diego District Attorney's Office
Internal Revenue Service
United States Department of State, Bureau of Diplomatic Security

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

El Centro – A reserve Imperial County Sheriff’s Deputy was charged today with smuggling illegal aliens in the trunk of her car as she drove through a checkpoint wearing her uniform and department-issued firearm.

Elizabeth Hernandez, a reserve Deputy Sheriff of Imperial County, and Edna Yanie Calderon, were arrested yesterday and charged with transportation of illegal aliens and aiding and abetting. Court records said Hernandez wore her uniform because she expected to be waived through the Highway 86 checkpoint by Border Patrol.

The complaint charges that on April 17, 2013, Calderon picked up three illegal aliens at a local fast food restaurant in Calexico, California. Border Patrol agents in the area became suspicious of the vehicle and began following at a distance.

The agents observed as Calderon drove the suspected illegal aliens to Hernandez’s home. Hernandez – a reserve deputy for three years - instructed the three aliens to hide in the trunk of her car, the complaint said. After the meeting at Hernandez’s home, Border Patrol had Hernandez and Calderon under surveillance.

After clearing the checkpoint, Hernandez drove to a nearby gas station, where she met with Calderon and transferred two of the three illegal aliens to Calderon’s car.

According to the complaint, as Hernandez began to leave the gas station, Border Patrol agents initiated lights and sirens and stopped her vehicle. Border Patrol agents also approached Calderon’s vehicle. The agents confirmed that the two individuals in Calderon’s vehicle and the other individual in the trunk of Hernandez’s vehicle were citizens and nationals of Mexico without immigration documents allowing them to remain, work, or reside in the United States legally. Hernandez and Calderon were then arrested.

The defendants were arraigned this afternoon before U.S. Magistrate Judge Peter C. Lewis. The government moved to detain both defendants based on risk of flight and danger to the community. A detention hearing was scheduled for Tuesday, April 23. A preliminary hearing was scheduled for May 2, 2013, at 1:30 p.m., before Judge Lewis.

DEFENDANTS   Magistrate Case No. 13MJ8293 Elizabeth Hernandez
Edna Yanie Calderon       SUMMARY OF CHARGES

Title 8, United States Code, Section 1324(a)(1)(A)(ii) B Transportation of Illegal Aliens
Maximum Penalties: 10 years of imprisonment and $250,000 fine

  AGENCY

United States Border Patrol-El Centro Sector

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

United States Attorney Laura E. Duffy announced that Richard Francis Garmo was sentenced today in federal court in San Diego by the Honorable Anthony J. Battaglia to serve 24 months in custody, followed by three years supervised release, for his role in a criminal conspiracy. Garmo is the eighth and final defendant to be sentenced in the FBI investigation known as “Operation Hook Shot.”

In April 2011, Garmo and others were charged in an indictment for illegally enriching themselves from the operation of an illegal sports gambling business and the distribution of marijuana. The indictment also charged that by using proceeds from those crimes, the conspiracy influenced the outcome of basketball games at the University of San Diego (USD) during the 2009-2010 season, and then attempted to recruit players to do the same during the 2010-2011 season.

Garmo pleaded guilty to the indictment in August 2012. According to court documents and admissions made by Garmo and his co-defendants, the conspiracy bribed co-defendant Brandon Johnson to influence the outcome of basketball games during the 2009-2010 season while Johnson was a member of USD’s basketball team. Garmo and his co-conspirators then profited by placing bets at Las Vegas casinos on games Johnson influenced. Based on admissions by co-defendant Steve Goria, the conspiracy profited in excess of $120,000 from their sports bribery scheme. Johnson was sentenced to 6 months imprisonment in March 2013 for his role. Thaddeus Brown, a former USD assistant coach and the co-conspirator who recruited Johnson into the conspiracy, was sentenced to 12 months imprisonment in April 2013.

In addition to the 2009-2010 season, the conspiracy attempted to recruit current college basketball players at USD and elsewhere to influence the outcome of basketball games for bribe money during the 2010-2011 season as well. One particular recruiting attempt of a USD player in February 2011 took place at a Pacific Beach convenience store owned and operated by Garmo. At the meeting, the USD player was provided thousands of dollars cash as a bribe, which he later returned after deciding not to accept the bribe.

Judge Battaglia ordered the defendant to report on July 5, 2013 to begin serving his sentence.

DEFENDANT   Criminal Case No. 11CR1345-AJB Richard Francis Garmo       SUMMARY OF CHARGES

Count 1: Title 18, United States Code, Section 371 - Conspiracy

  INVESTIGATING AGENCY

Federal Bureau of Investigation

Eighteen suspected methamphetamine and heroin traffickers were arrested during pre-dawn raids around the North County today.

More than 200 agents and detectives from the multi-agency North County Regional Gang Task Force made the arrests in Oceanside, Vista, Escondido and elsewhere in the North County. Task force members confiscated 35 weapons during the course of the investigation. Among the weapons seized were hand guns, semi-automatic rifles and shotguns, including a 12-gauge Street Sweeper semiautomatic.

These arrests are associated with the unsealing of 15 grand jury indictments today charging 46 defendants with various narcotics trafficking crimes, including conspiracy plus importation, distribution and possession of methamphetamine. A few defendants were charged with heroin trafficking.

“The number and types of weapons seized in this investigation are troubling,” said U.S. Attorney Laura Duffy. “We will to continue to target these well-armed drug traffickers who operate in our neighborhoods and put all of us at risk – especially our children.”

The North County Regional Gang Task Force is a multi-agency group including the FBI, ATF, the San Diego County Sheriff’s Department, Homeland Security Investigations and police departments in Oceanside and Carlsbad, with assistance from other federal and local law enforcement agencies as well.

Daphne Hearn, FBI Special Agent in Charge, said: “Today's arrests by the North County Regional Gang Task Force are the result of a long-term multi-agency investigation by federal, state and local law enforcement agencies working together. The FBI will continue to work with our law enforcement partners to make our communities a safer place.”

"It is only by the extremely hard work, commitment, and passion from the collaborative North County Gang Task Force that made Operation Corridor such a tremendous success,” said Oceanside police Chief Frank S. McCoy. “This operation is a great example of local and federal law enforcement agencies from all over San Diego joining together to combat drug traffickers in our community who threaten the safety and security of our citizens."

“ATF considers the North County Gang Task Force a critical partner in its long-term mission of combating violent crime and removing criminals from our communities as was shown in Operation Corridor,” said Steven J. Bogdalek, Special Agent in Charge ATF Los Angeles Field Division. “ATF will continue to dedicate federal resources and work with our local agencies in the pursuit of eradicating illegal firearm trafficking and criminal activity.”

“Operation Corridor exemplifies the good work done by multiple agencies in San Diego County,” said San Diego County Sheriff Bill Gore. “This is a multi-faceted approach to reducing violent crime, and those who perpetrate it. This investigation is a prime example of how effective Intelligence Led Policing can be with respect to targeting prolific, criminal offenders and managing law enforcement resources. Operation Corridor has been extremely effective in restoring quality of life to our residents in the North County along the 78 corridor.”

“I commend all of the law enforcement professionals in the San Diego area who worked tirelessly in this coordinated effort to combat the threats that violence and fear tactics pose to public safety in our communities,” said Derek Benner, special agent in charge for Homeland Security Investigations San Diego.

DEFENDANTS     Case Number: 13cr1128-BEN LAURA CRUZ
RAUL ALVARADO
ROBERT RODRIGUEZ
CARRIE BROWN-RODRIGUEZ ANTHONY PALAFOX
JESSICA HOLGUIN
ROBERT AGUILAR
CHRISTIAN GARDUNO
ERICK GARCIA-MARTINEZ JOSHUA SANCHEZ
TRAVIS JOB
BRIAN RAMIREZ
ANDY ESPINOZA
LORI STORY
ANGEL OLMOS
BRAD WOOLARD
JOSE ANTONIO
EMILY BAKER
MONORIN PHIAKEO
JESSICA KISNER
HECTOR MEDRANO
FRANKIE KING Already in custody
Already in custody
Already in custody
Arrested 4/15/13 Arrested 4/17/13 Arrested 4/17/13
At Large
Already in custody
At Large
Arrested 4/17/13 Arrested 4/17/13 Arrested 4/17/13 Arrested 4/17/13 Arrested 4/17/13
At Large
Arrested 4/17/13
Already in custody
At Large
Arrested 4/17/13
At Large
Arrested 4/17/13 Arrested 4/17/13     Summary of Charges

Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 21, United States Code, Sections 952, 960 (b) (1) (H) and 963 – Conspiracy to Import Methamphetamine; Title 21, United States Code, Section 841 (a) (1) – Possession of Methamphetamine with Intent to Distribute

  Case Number: 13cr1238BEN LYDIA LUCIO
DAVID GAMEZ
ANA ALVIZOVITAL
ERROL WHITE
RUDOLPH FIGUEROA

Arrested 4/17/13
Arrested 4/17/13
Already in Custody
Arrested 4/17/13
Arrested 4/17/13

    Summary of Charges Title 21, United States Code, Sections 952, 960 (b) (2) (A) - Conspiracy to Import Heroin; Title 21, United States Code Sections 952, 960 and 963 – Conspiracy to Import Heroin   Case Number: 1232BEN ALEXANDRA AGUIRRE Arrested 4/17/13     Summary of Charges Title 21, United States Code, Sections 952, 960 – Importation of Heroin   Case Number: 13cr1239MMA THOMAS MEDINA
PABLO DIAZ

Arrested 4/17/13
Arrested 4/17/13

    Summary of Charges Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 21, United States Code, Section 841 (a) (1) – Possession of Methamphetamine with Intent to Distribute   Case Number: 13cr1237L STEVEN HERNANDEZ
JUAN URIBE Arrested 4/17/13
Already in Custody     Summary of Charges Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 21, United States Code, Section 841 (a) (1) – Possession of Methamphetamine with Intent to Distribute   Case Number: 13cr1243BEN ROBERT SARMIENTO Arrested 4/17/13     Summary of Charges Title 21, United States Code, Section 841 (a) (1) – Possession of Methamphetamine with Intent to Distribute; Title 18, United States Code, Section 922 (g) (1) - Felon in possession of a firearm   Case Number: 13cr1242AJB CARLOS RIVERA Arrested 4/17/13     Summary of Charges Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 18, United States Code, Section 922 (g) (1) - Felon in possession of a firearm   Case Number: 13cr1241BEN STEVEN NORTH
ROBERT AGUILAR Arrested 4/17/13
At Large     Summary of Charges Title 21, United States Code, Sections 841(a)(1) and (b)(1)(B) - Distribution of Methamphetamine; Title 18, United States Code, Section 922 (g) (1) - Felon in possession of a firearm   Case Number: 13cr1231JAH JAVIER ALVAREZ Already in custody     Summary of Charges Title 21, United States Code, Sections 841(a)(1) - Distribution of Methamphetamine   Case Number: 13cr1244W PAUL WOODS At Large     Summary of Charges Title 21, United States Code, Sections 841(a)(1) - Distribution of Methamphetamine   Case Number: 13cr1233BEN ARMANDO ARELLANO Already in Custody     Summary of Charges Title 21, United States Code, Sections 841(a)(1) - Distribution of Methamphetamine   Case Number: 13cr1234WQH RUDY BLANCO
AMANDA KOPP Arrested 4/17/13 Arrested 4/17/13     Summary of Charges Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 21, United States Code, Section 841 (a) (1) and (b) (1) (B) (viii) – Distribution of Methamphetamine   Case Number: 13cr1240L GEORGE MOLINA
ULYSSES RAMOS Already in Custody
Already in Custody     Summary of Charges Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 21, United States Code, Section 841 (a) (1) and (b) (1) (B) (viii) – Possession of Methamphetamine with intent to distribute   Case Number: 13cr1235JAH ROUANNE DIAZ
DEANDRA COX Arrested 4/17/13
Already in custody     Summary of Charges Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine; Title 21, United States Code, Section 841 (a) (1) and (b) (1) (B) (viii) – Distribution of Methamphetamine   Case Number: 13cr1236GPC ADAM ESPINO Arrested 4/17/13     Summary of Charges Title 21, United States Code, Sections 841(a) (1) - Distribution of Methamphetamine   AGENCIES

Federal Bureau of Investigation
Oceanside Police Department
Bureau of Alcohol, Tobacco and Firearms
San Diego County Sheriff's Department
Homeland Security Investigations
Carlsbad Police Department

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

Cynthia Lozano, a tax preparer from Lemon Grove, was arrested today and an indictment was unsealed in connection with a scheme to steal Social Security numbers, file false tax returns, and defraud the Internal Revenue Service ("IRS"). She was taken into custody by IRS agents in Phoenix, Arizona, where she will make her first appearance in U.S. District Court tomorrow.

According to a federal grand jury indictment, Lozano owned and operated the tax preparation business, "CLozano Income Tax," in Spring Valley, California. From 2010 to the present, Lozano used her business to submit fraudulent federal income tax returns seeking bogus refunds. In carrying out this scheme, Lozano made false statements which caused the IRS to issue refunds under the EIC provisions. An EIC is a refundable federal income tax credit for low- to moderate-income working individuals and families that is intended to offset the burden of social security taxes and to provide an incentive to work. If a taxpayer's EIC exceeds the amount of taxes actually owed, it results in the IRS paying a refund to the taxpayers who claim and qualify for the credit.

As reflected in charging documents, Lozano targeted over 200 victims by filing fraudulent IRS Forms 1040 in the taxpayers' names. Frequently, the taxpayers were unaware that Lozano used their Social Security numbers thus also becoming victims of aggravated identity theft. As a result, Lozano improperly received over $1 million from the IRS in fraudulent refunds which she laundered through a bewildering maze of bank accounts.

Using the proceeds of this fraud, Lozano, among other things, purchased 20 properties in and near Phoenix, Arizona. Her indictment seeks forfeiture of these properties to recompense the government from the loss of her fraud and to prevent Lozano from reaping a financial benefit from her crimes.

United States Attorney Laura Duffy said, "In these times of financial hardship, tax fraud is essentially a theft from each and every citizen who shoulders their rightful share of the tax burden." She added that the U.S. Attorney's Office is committed to stopping the recent increase in theft of personal identification information and its use in a variety of criminal offenses."

N. Dawn Mertz, Special Agent in Charge for IRS Criminal Investigation, said, “The IRS takes particular interest in cases where someone, for their own personal benefit, steals the identity of others to file false tax returns with the IRS. Taxpayers deserve our unwavering vigilance in the investigation and prosecution of allegations of identity theft and tax fraud by unscrupulous tax professionals who victimize others.”

DEFENDANT   Case Number: 13cr1354AJB Cynthia Lozano       SUMMARY OF CHARGES

Counts 1-13 Title 18, United States Code, Section 287 (false claims) Maximum penalty: 5 years of custody; $250,000 Fine

Counts 14-25 Title 18, United States Code, Section 1343 (wire fraud) Maximum penalty: 20 years of custody; $250,000 Fine

Count 26 Title 18, United States Code, Section 1341 (mail fraud) Maximum penalty: 20 years of custody; $250,000 Fine

Counts 27-33 Title 18, United States Code, Section 1028A (aggravated identity theft) Minimum penalty: 2 years of custody, consecutive to sentence for other crimes; No Probation; Fine same as for underlying offense

  AGENCIES

Internal Revenue Service - Criminal Investigations ("IRS-CI")
Department of Treasury, Inspector General for Tax Administration ("TIGTA")

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

United States Attorney Laura E. Duffy announced today that United States University, a for-profit college located in San Diego, has agreed to pay a civil settlement in the amount of $686,720 and that the school’s former Financial Aid Director has pled guilty, resolving allegations that between December 2008 and February 2011, the school submitted falsified financial aid applications to the U.S. Department of Education in order to obtain Pell Grant funds for which students were not eligible.

The civil settlement was paid by Educacion Significativa, LLC, and IAC Funding, LLC, doing business as United States University. The school, which has campuses in Chula Vista and Cypress, California, was known as InterAmerican University from 1997 to 2010, when it changed its name to United States University. United States University offers courses of study in nursing and other programs.

The school’s former Financial Aid Director, Christina Miller, pled guilty in federal court (Case Number 13cr1157MMA) to criminal financial aid fraud, in violation of Title 20, United States Code, Section 1097(b), admitting that she knowingly and willfully falsified student financial aid applications, resulting in the improper awarding of federal Pell Grants to ineligible students. Under federal law, students already holding Bachelor’s degrees are generally not eligible for Pell Grant funds, but Miller admitted changing student degree status in order to allow the school to improperly receive Pell Grant funds from the U.S. Department of Education. Miller is scheduled to be sentenced on June 27, 2013.

“We all benefit from successful students’ economic and professional contributions to our country,” said United States Attorney Duffy. “Financial aid fraud not only harms the American taxpayer, but robs our community of that investment. This resolution should send a strong message to those who would choose to fraudulently obtain monies from taxpayer-funded financial aid programs. We will continue to work closely with our investigative partners in taking both criminal and civil measures to combat fraud against government programs.”

“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. As the law enforcement arm of the U.S. Department of Education, the Office of Inspector General is committed to fighting student aid fraud and we will continue to aggressively pursue those that participate in these types of crimes,” said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General Western Regional Office.

FBI Special Agent in Charge, Daphne Hearn stated, “Fraud and abuse of educational taxpayer-funded programs deprives those who are eligible and most deserving of this financial aid. The FBI and our partners will pursue those who would seek to undermine these programs, so that this important block of financial aid is available for those who need it most.”

The investigation arises from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the federal False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States. As provided by the False Claims Act, the whistleblower in this case, Veronica Glaser, a former student and employee at the school, will receive a share of the recovery.

The investigation and prosecution of this matter was the result of the collaborative effort of the United States Attorney’s Office for the Southern District of California; the Department of Education, Office of Inspector General; and the Federal Bureau of Investigation. Assistant U.S. Attorney Christopher Tenorio is handling the criminal prosecution of Christina Miller. Assistant U.S. Attorneys Joseph Price and Douglas Keehn handled the civil False Claims Act matter brought against United States University.

DEFENDANT   Criminal Case Number: 13CR1157-MMA Christina Miller       SUMMARY OF CHARGES

Financial Aid Fraud-Title 20, United States Code, Section 1097(b)

  INVESTIGATING AGENCIES

Department of Education, Office of Inspector General
Federal Bureau of Investigation

San Diego - Former Internal Revenue Service agent-turned-tax preparer Steven Martinez was sentenced today by U.S. District Court Judge William Q. Hayes to almost 24 years in prison for defrauding clients out of more than $11 million and then plotting their murders to prevent them from testifying about the theft.

In addition to a 286-month sentence, the judge ordered Martinez to pay more than $14 million in restitution to the victims, the IRS and the California Franchise Tax Board. Judge Hayes also entered a preliminary order of forfeiture as to certain real and personal property, including an $11 million money judgment. Following Martinez’s service of his sentence, Judge Hayes placed him on five years of supervised release.

In comments at today’s hearing, Assistant U.S. Attorney Joseph Orabona argued for a significant sentence in part because Martinez meticulously planned the murders by giving a would-be assassin – who was a cooperating witness for the FBI - detailed instructions and information about each of the four victims contained in “packets.” One of the exchanges between Martinez and the cooperating witness was captured on video.

“These victims were surveilled. They were watched. Their habits were documented. It’s disturbing,” Orabona said. “This was a cool and calculating individual. He knew how the victims lived. He’s explaining it to the hit man on the video.”

Before imposing a sentence, Judge Hayes noted that the defendant did not make a heat-of-the moment decision to commit a crime. Rather, it was a long-term fraud spanning years and culminating with the carefully planned murder-for-hire plots. “Mr. Martinez in my view had some time to think about what he was doing.” He called the defendant’s actions “cold blooded.”

U.S. Attorney Laura Duffy said she was pleased with the outcome of the prosecution. “This is a case of greed so extreme that what began as serious – but not violent - white-collar crimes almost escalated to the murders of four people. Fortunately FBI intervention prevented the violence and today justice was served with a decades-long sentence. As tax day quickly approaches, this is a reminder that anyone who chooses to undermine the integrity of our tax system risks prosecution.”

FBI Special Agent in Charge, Daphne Hearn, commented, “Once the FBI became aware of Mr. Martinez’s murder-for-hire plot, FBI agents took immediate steps to disrupt this plot. In doing so, the FBI ensured that no harm would come to potential witnesses or others. I commend the efforts of the agents and prosecutors who worked tirelessly in this investigation.”

N. Dawn Mertz, Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office, commented: “The activities of Steven Martinez are an example whereby tax crimes, malicious financial greed and a blatant disregard for the law can turn into potential violent criminal activity. Today’s sentencing reinforces IRS Criminal Investigation’s commitment to pursue those committing tax and financial crimes and to partner with our law enforcement community to bring justice to those who behave as if they are above the law.”

Martinez pleaded guilty on August 10, 2012, to criminal charges including murder-for-hire, witness tampering involving attempted murder, solicitation of a crime of violence, mail fraud, filing false tax returns, Social Security fraud, aggravated identity theft, and money laundering. Martinez pleaded guilty to 12-counts in a superseding indictment.

As part of his guilty plea, Martinez admitted that in late February 2012, he solicited a third party to murder four witnesses with the intent to prevent their testimony in his pending criminal tax case.

The third party contacted the San Diego division of the FBI on February 28, 2012 to report the murder-for-hire plot by Martinez and agreed to cooperate with the FBI in the investigation. According to the complaint, a subsequent meeting between the FBI’s cooperating witness and Martinez was recorded and videotaped by the FBI.

In reference to two of the murder targets, Martinez told the would-be assassin “he could make him rich for the rest of his life, $100,000 cash, if he eliminated the lady in Rancho Santa Fe and the lady in La Jolla,” according to court records. The cooperating witness said Martinez “suggested that the former employee use two different pistols for the murders and that he acquire a silencer.”

Martinez admitted in court that he tried to prevent the former clients’ testimony by offering the FBI’s cooperating witness $100,000 to murder them. He admitted he provided the third party with four written packets of detailed information about the former clients, including photos of the soon-to-be murder victims, their homes and personal information. Martinez admitted that once the murders took place, he would pay the perpetrator $40,000 in cash, followed by the remaining $60,000 in cash within 72 hours of the murders.

In addition, Martinez admitted that he filed false tax returns and defrauded his clients by stealing over $11 million in tax payments. Martinez admitted that he presented his clients with completed tax returns indicating that they owed a significant amount of tax. He requested that his clients write checks payable for the amount of taxes due and owing to an alleged client trust account (instead of directly to the IRS or the California Franchise Tax Board).

Martinez also convinced these same clients to write checks during the tax year for estimated tax payments to the same alleged client trust accounts. Rather than deposit these checks into a true trust account, Martinez admitted that he took the checks and deposited them into several nominee bank accounts. In an attempt to conceal his fraud, Martinez admitted that he filed a different set of false tax returns indicating that his clients owed little or no income tax.

Martinez admitted that he converted approximately $11 million in stolen taxpayer funds for his own personal benefit, and used them to make home improvements, purchase real estate, purchase a beach home in Mexico, pay for the use of a private airplane, make investments of more than $2 million in other entities, and make payments of more than $2 million for his personal use credit cards and loans.

As part of his fraudulent tax scheme, Martinez admitted that he committed Social Security fraud and aggravated identity theft by using the Social Security numbers of his clients without authorization when he filed the false tax returns with the IRS. Martinez admitted he committed mail fraud by mailing the false tax returns to the IRS. Martinez also admitted that he laundered approximately $2 million through nominee bank accounts for his own business and personal use.

Finally, Martinez admitted that he knowingly and intentionally filed false personal income tax returns for tax years 2004, 2005, 2006, and 2007.

DEFENDANT   Criminal Case No. 11CR1445WQH Steven Martinez Age: 51 Ramona, California   CHARGES THAT DEFENDANT PLED GUILTY TO:

Count 4: Title 18, United States Code, Section 1341 - Mail Fraud
Maximum Penalties: 20 years of imprisonment and a fine equal to twice the gross loss caused to persons by the offense

Count7: Title 26, United States Code, Section 7206(2) - Procuring False Tax Returns
Maximum Penalties: 3 years of imprisonment and $250,000 fine

Counts 21: Title 42, United States Code, Section 408(a)(8) - Social Security Fraud
Maximum Penalties: 5 years of imprisonment and $250,000 fine

Counts 33: Title 18, United States Code, Section 1028A - Aggravated Identity Theft
Maximum Penalties: 2 years of imprisonment, consecutive to any other sentence

Count 47: Title 26, United States Code, Section 7206(2) - Making False Tax Returns
Maximum Penalties: 3 years of imprisonment and $250,000 fine

Count 49: Title 18, United States Code, Section 1957 - Money Laundering
Maximum Penalties: 10 years of imprisonment and $250,000 fine

Counts 50 through 53: Title 18, United States Code, Section 1512(a)(1)(A) - Witness Tampering
Maximum Penalties: 30 years of imprisonment and $250,000 fine per count

Count 54: Title 18, United States Code, Section 1958 - Use of a Facility of Interstate Commerce in Commission of Murder-For-Hire
Maximum Penalties: 10 years of imprisonment and $250,000 fine

Count 55: Title 18, United States Code, Section 373 - Solicitation of a Crime of Violence
Maximum Penalties: 15 years of imprisonment and $250,000 fine

  AGENCIES

Internal Revenue Service, Criminal Investigation
Federal Bureau of Investigation

United States Attorney Laura E. Duffy announced that Paul Joseph Thweni was sentenced today by the Honorable Anthony J. Battaglia to serve 30 months in custody, followed by three years supervised release, for his role in a criminal conspiracy.

The indictment charged that Thweni and nine others enriched themselves by operating an illegal sports gambling business and by distributing marijuana. Using proceeds from those crimes, Thweni and his co-conspirators influenced the outcome of basketball games at the University of San Diego (USD) during the 2009-2010 season, and then attempted to recruit players to do the same during the 2010-2011 season. Thweni pleaded guilty to the indictment on August 2, 2012.

According to court documents and other admissions, Thweni and his co-conspirators bribed co-defendant Brandon Johnson to influence the outcome of basketball games during the 2009-2010 season while Johnson was a member of USD’s basketball team. The co-conspirators then profited by placing bets at Las Vegas casinos on games Johnson influenced. Co-defendant Steve Goria, who was sentenced to 30 months imprisonment in October 2012, admitted that the conspiracy made more than $120,000 from the game-fixing scheme. Thweni previously admitted that during the 2010-2011 season, the co-conspirators attempted to recruit current college basketball players at USD and other schools to influence the outcome of basketball games in exchange for cash.

Judge Battaglia ordered the defendant to report on April 19, 2013 to begin serving his sentence.

DEFENDANT   Criminal Case No. 11CR1345-AJB Paul Joseph Thweni       SUMMARY OF CHARGES

Count 1: Title 18, United States Code, Section 371 - Conspiracy

  INVESTIGATING AGENCY

Federal Bureau of Investigation

Criminal Case Number: 11cr1345AJB: Convictions:

Steve Warda Goria
Richard Francis Garmo
Thaddeus James Brown
Brandon Johnson
Richard Thweni
David Gates
Jake Salter

United States Attorney Laura E. Duffy announced that Thaddeus Brown was sentenced today in federal court in San Diego by the Honorable Anthony J. Battaglia to serve 12 months in custody, followed by three years supervised release, for his role in a conspiracy to commit sports bribery. The indictment charged that Brown and others influenced the outcome of basketball games at the University of San Diego during the 2009-2010 season, and then attempted to recruit players to do the same during the 2010-2011 season. Brown pleaded guilty to the indictment on November 13, 2012. To date, eight of the ten defendants indicted have pled guilty.

According to court documents and admissions from co-defendants’ guilty pleas, Brown, who was an assistant coach at USD during the 2006-2007 season, bribed co-defendant Brandon Johnson to influence the outcome of basketball games during the 2009-2010 season while Johnson was a member of USD’s basketball team. Brown and his co-conspirators then profited by placing bets at Las Vegas casinos on games Johnson influenced. Co-defendant Steve Goria, who was sentenced to 30 months imprisonment in October 2012, admitted that the conspiracy profited more than $120,000 from the game-fixing scheme. Brown admitted in his guilty plea that during the 2010-2011 season, he solicited a current USD basketball player to influence the outcome of basketball games for bribe money.

Judge Battaglia ordered the defendant to report on June 5, 2013 to begin serving his sentence.

DEFENDANT   Criminal Case No. 11CR1345-AJB Thaddeus Brown       SUMMARY OF CHARGES

Count 1: Title 18, United States Code, Section 371 - Conspiracy

  INVESTIGATING AGENCY

Federal Bureau of Investigation

United States Attorney Laura E. Duffy announced that Hector Rodriguez, a former Customs and Border Protection Officer, and Gerardo Rodriguez pled guilty today in front of Magistrate Judge David Bartick to conspiracy to bring in aliens for financial gain and to receive bribes, bringing in aliens for financial gain, and bribery.

According to court records, defendant Hector Rodriguez agreed that from around 2010 until his arrest on July 13, 2012, he received bribes from codefendants Gerardo Rodriguez and Maria Guerrero, in the form of cash money, use of luxury vehicles, and use of an apartment, in return for failing to enforce U.S. immigration laws by admitting illegal aliens into the U.S. through his inspection lane at the San Ysidro Port-of-Entry. Defendant Hector Rodriguez provided his lane assignment information to codefendants who would then drive vehicles containing illegal aliens from Mexico to the United States 2 through his assigned inspection lane. On their date of arrest, July 13, 2012, codefendant Gerardo Rodriguez drove a vehicle containing 8 illegal aliens and codefendant Vanessa Moya drove a vehicle containing 6 illegal aliens through defendant Hector Rodriguez’s inspection lane. To conceal the smuggling, defendant Hector Rodriguez would enter into the government database false information about who was driving the vehicle and the number of occupants, thereby concealing the fact that the vehicles contained illegal aliens. As part of his guilty plea, Defendant Hector Rodriguez has agreed to forfeit a 2009 Jaguar, 12 luxury watches (5 Rolexes), jewelry, televisions, and computers that were obtained as a result of his criminal activity. Codefendant Gerardo Rodriguez has agreed to forfeit a 2005 Mercedes, 2006 Harley Davidson, $60,000, televisions, and computers that were obtained as a result of his criminal activity.

The defendants are scheduled to appear for sentencing before U.S. District Judge Roger T. Benitez on July 1, 2013, at 9 a.m.

DEFENDANTS   Case Number: 12cr2997-BEN/12cr4462-BEN Hector Rodriguez
Gerardo Rodriguez
Vanessa Moya
Maria Guerrero       SUMMARY OF CHARGES

Count 1 - Title 8, United States Code, Section 371- Conspiracy to Bring In Aliens For Financial Gain and Bribery; Maximum Penalties - 5 years' imprisonment and $250,000 fine

Counts 2-4 & 9 - Title 8, United States Code, Section 1324(a)(2)(B)(ii)- Bringing In Illegal Aliens For Financial Gain; Mandatory Minimum Penalty of 5 years' imprisonment; Maximum Penalties - 15 years' imprisonment, and $250,000 fine

Counts 16-17 - Title 18, United States Code, Sections 201(b)(1), 201(b)(2) - Bribery; Maximum
Penalties - 15 years' imprisonment, and a $250,000 fine or three times the amount of bribe, whichever is greater

  INVESTIGATING AGENCIES

The Border Corruption Task Force is composed of the Federal Bureau of Investigation, Customs and Border Protection - Internal Affairs, Customs and Border Protection - Field Operations, Border Patrol, Transportation Security Administration, and Drug Enforcement Administration.

United States Attorney Laura E. Duffy announced that David Raymond Garcia, a methamphetamine dealer and associate of the Hells Angels motorcycle gang, was sentenced today in U.S. District Court to serve 262 months in prison for conspiracy to distribute methamphetamine. At today's hearing, U.S. District Judge Marilyn L. Huff also sentenced Jason Scanlon, another methamphetamine supplier charged in the case, to serve 188 months in custody. These two defendants were prosecuted as part of an FBI Violent Crimes Task Force investigation that ultimately resulted in 36 defendants being charged with conspiracy to distribute methamphetamine.

According to court documents and information provided at the sentencing hearing by Assistant U.S. Attorney Andrew G. Schopler, Garcia supplied drugs to or employed at least 20 codefendants (and Scanlon at least four codefendants) during the course of the investigation into methamphetamine-trafficking and violent crimes committed by the San Diego Chapter of the Hells Angels and their criminal partners. Court documents also show that Garcia and codefendant Michael 2 Ottinger, Jr., the Sergeant-at-Arms for the Hells Angels, used violent force and intimidation to control the methamphetamine trade in San Diego. On December 3, 2012, Judge Huff sentenced Ottinger for his role in the methamphetamine conspiracy to serve 262 months in federal prison. Ottinger still faces murder charges in state court relating to the 2010 murder of a rival member of the Mongols motorcycle gang.

U.S. District Judge Marilyn L. Huff found both Garcia and Scanlon to be career offenders under federal law. This offense is Garcia's ninth felony conviction, including eight drug felonies and one felony for forging an access card to commit fraud. Scanlon now has ten felony convictions, including eight drug felonies, one felony for receiving stolen property, and one felony for evading a peace officer.

United States Attorney Duffy stated, "Individuals involved in the drug trade not only proliferate the spread of dangerous narcotics in our society, but they also destabilize our communities with violence and related criminal activities. Our federal, state and local law enforcement partners on the Task Force have done the San Diego community a great service by taking these dangerous offenders off the street."

DEFENDANT   Case Number: 10CR5016-H David Raymond Garcia
Jason Alex Scanlon Age: 43
Age: 42     SUMMARY OF CHARGES

Conspiracy to Distribute MethamphetamineCTitle 21, United States Code, Sections 841(a)(1) and 846

  AGENCIES

Federal Bureau of Investigation
San Diego Police Department
San Diego County Probation Department
Oceanside Police Department
National City Police Department
Chula Vista Police Department
San Diego County Sheriff's Department
San Diego County District Attorney's Office

Summary of Sentences in Criminal Case: 10cr5016-H

Conspiracy to Distribute Methamphetamine-Title 21, United States Code, Sections 841(a)(1) and 846

Michael Edward Ottinger, Jr.
David Raymond Garcia
Martin Francisco Moreno
Hugo Gomez Flores
Rory Cruz Flanigan
Jason Alex Scanlon
Eduardo Andres Sarquiz
Juan Antonio Mendez
William Manuel Castellano
Daniel Joseph Seiler
Cynthia Marie Stephan
Matthew Joseph Mooney
Darrel Lee Cooper
Robert Blaine Hodges
Mercedes Ciara Nina Cornejo
Bruce Kevin Lambert
Jason Michael Bradford
Douglas Edward Witcher
Phalen Farber
Derek Ralph Low
Mary Elizabeth Saber
Anthony James Medvec
Andre Guy Almeraz 262 Months
262 Months
120 Months
120 Months
70 Months
188 Months
41 Months
115 Months
92 Months
87 Months
78 Months
84 Months
60 Months
48 Months
77 Months
70 Months
60 Months
63 Months
40 Months
77 Months
92 Months
30 Months
46 Months
  Summary of Sentences for Illegal Use of a Communication Facility to Facilitate Meth Trafficking – Title 21, United States Code, Section 843(b): Martin Thomas Forschner
Patrick James Haggerty
30 Months
46 Months   Law enforcement continues to seek the public’s assistance in locating fugitive defendant Ernesto Verdugo, Jr. Anyone with information regarding this fugitive may contact the FBI at 858-565-1255.

United States Attorney Laura E. Duffy announced that Alejandro Avilla-Soto was sentenced on Monday, March 11, 2013 before the Honorable Judge Roger T. Benitez, United States District Court Judge to serve 216 months in federal prison based on his guilty plea to conspiracy to distribute 50 grams of methamphetamine, a Schedule II Controlled Substance, in violation of Title 21, United States Code, Sections 841(a)(1) and 846.

In his guilty plea, Avilla-Soto admitted to engaging in a conspiracy to distribute methamphetamine from his residence in Calexico, CA. According to court documents, the defendant’s source of supply fronted the methamphetamine and allowed the defendant to pay for a portion of the drugs and the rest after it was sold.

The defendant entered his guilty plea on July 2, 2012, and has been in custody since his arrest by FBI agents on January 20, 2012.

This case is the result of an investigation conducted by the FBI Imperial County Safe Streets Task Force, a group of federal, state, and local law enforcement agents led by the FBI, investigating narcotics distribution and gang investigations.

DEFENDANT   Case Number: 12CR0542BEN Alejandro Avila-Soto       SUMMARY OF CHARGES

Title 21, United States Code, Sections 841(a)(1) and 846 – Conspiracy to distribute a controlled substance (Methamphetamine)

  INVESTIGATING AGENCIES

Federal Bureau of Investigation
United States Border Patrol
Immigrations and Customs Enforcement’s Homeland Security Investigations

United States Attorney Laura E. Duffy announced that today Robert Peltier, one of the two principal owners and operators of Ranch Catering (dba "Ranch Events"), was ordered to pay $222,822 in restitution for committing tax evasion stemming from the operation of his business. United States District Judge Janis L. Sammartino also sentenced the defendant to serve six months home incarceration and six months home detention.

According to its website, Ranch Catering is one of San Diego’s "leading catering specialists, managing many exciting and unique venues and some of the largest Special Events in America." As detailed in charging documents, Peltier - while operating the catering business in 2003 - deposited proceeds from the business into accounts located at two different banks. When it came time to prepare his tax returns, Peltier provided his tax preparer with the deposits from only one of the two banks. As a result, he failed to declare $419,000 in catering income to the IRS. By concealing this income, Peltier caused Ranch Catering to evade paying $112,824 in taxes due and owing.

As revealed during his sentencing hearing, Robert Peltier was ordered to pay $221,792 in back taxes, penalties and interest on the taxes evaded. In addition, his son Jason Peltier (who is a co-owner of the business) entered into a separate civil settlement with the IRS requiring him to pay an additional $505,435 in back taxes, penalties and interest.

United States Attorney Duffy commented: “Given the difficult economic situation facing this country, it is imperative that we do not allow individuals to evade their duty to shoulder a fair share of the tax burden. Otherwise, honest citizens end up paying more than their rightful share."

“As hard-working citizens are sitting down to prepare their tax returns, it is imperative that IRS Criminal Investigation (CI) remain vigilant in our pursuit of those taxpayers who fail to report all of their income,” commented N. Dawn Mertz, Acting Special Agent in Charge for IRS CI Los Angeles Field Office. “Today’s sentencing of Robert Peltier should serve as a deterrent to those contemplating filing a false tax return.”

DEFENDANT   Criminal Case No. 12cr3126-JLS Robert Peltier   Jamul, California   SUMMARY OF CHARGES

Count 1: Title 26, United States Code, Section 7201 - Tax Evasion

  INVESTIGATING AGENCY

Internal Revenue Service - Criminal Investigation

United States Attorney Laura E. Duffy announced that Vahid Edrisi was found guilty by a federal jury earlier today in San Diego of six counts of bank robbery and one count of robbing a pharmacy. The verdicts follow a two-day trial before United States District Judge Larry A. Burns.

The evidence presented at trial showed Edrisi accessing cellular towers in the vicinity of six of the seven robberies committed by Aaron Hyman, dubbed the “Chubby Bandit,” in October 2012. Edrisi himself was captured by video surveillance just prior to one of the robberies, and Edrisi’s black 2011 Chevrolet Camaro Convertible was captured on video surveillance at three of the seven robberies. Hyman entered guilty pleas to seven counts of robbery on January 24, 2013.

The evidence further showed that Edrisi twice fled law enforcement at high rates of speed to avoid capture. Edrisi abandoned the car following the second chase. Inside the car, officers found a hat worn during one of the seven “Chubby Bandit” robberies. Edrisi was arrested when he went to the tow yard to attempt to retrieve his car.

The defendants were convicted of robbing:

$369.00
2 Bottles of Oxycontin
$2,307.00
Attempted
$309.00
$1,590.00
$830.00
U.S. Bank, 12265 Scripps Poway Parkway, Poway, CA
CVS Pharmacy, 191 Woodland Parkway, San Marcos, CA
Chase Bank, 7176 Avenida Encinitas, Carlsbad, CA
Chase Bank, 607 Lomas Santa Fe Dr., Solana Beach, CA
Wells Fargo, 276 N. El Camino Real, Encinitas, CA
U.S. Bank, 770 Carlsbad Village Dr., Carlsbad, CA
Wells Fargo, 11986 Bernardo Plaza Dr., San Diego, CA

Judge Burns set a sentencing hearing for Edrisi on June 10, 2012 at 9:30 a.m. Hyman is scheduled for sentencing on April 8, 2012 at 9:30 a.m.

DEFENDANTS   Case Number: 12cr5098-LAB Aaron Alan Hyman
Vahid Edrisi       SUMMARY OF CHARGES

Title 18, United States Code, Section 2113(a) Bank Robbery
Title 18, United States Code, Section 1951(a) – Obstruction of Interstate Commerce by Force (Hobbs Act)
Maximum Penalties: 20 years for each count

  INVESTIGATING AGENCIES

Federal Bureau of Investigation
Carlsbad Police Department
San Diego County Sheriff’s Department
San Diego Police Department

SAN DIEGO, CA - Eduardo Arellano-Felix, 56, the last of four brothers to be targeted by U.S. prosecutors for leading one of the world’s most notorious multi-national drug trafficking organizations, pleaded guilty today in federal court in San Diego to money laundering and conspiracy charges.

The plea marks the conclusion of the U.S. government’s 20-year legal battle to dismantle the Arellano Felix Organization (AFO), which moved hundreds of tons of cocaine and marijuana from Mexico and Colombia into the U.S. and made hundreds of millions of dollars in the process. The cartel terrorized the Southwest border and beyond with executions, torture, beheadings, kidnappings and bribes to law enforcement, military personnel and government officials.

“I’m proud to say this is the end of an era,” said U.S. Attorney Laura Duffy. “When this ruthless cartel was thriving in the 1990s, we made what some considered an audacious and impossible commitment to wipe out the organization. Today, we can say we have done just that.”

“This plea agreement pounds the final nail in the coffin of what used to be the Arellano- Felix Organization,” says DEA San Diego Special Agent in Charge William R. Sherman. “The AFO, once a brutally violent cartel, now becomes a footnote in history books, while DEA and our partners focus on dismantling the drug trafficking organizations that have moved in since the AFO’s demise. We will be just as relentless in our pursuit of these new trafficking organizations and they will be brought to justice in the same manner as the AFO.”

In his plea agreement, Arellano-Felix – a medical doctor nicknamed “El Doctor” - admitted he was a senior member of the AFO. He also admitted that he laundered hundreds of millions of dollars in drug trafficking proceeds and used some of the income to pay AFO members to commit crimes; to buy firearms, ammunition and vehicles; to travel on AFO-related business; to pay bribes; and to purchase drugs. He signed his plea agreement, “Dr. Eduardo Arellano Felix.”

In connection with his plea, Arellano-Felix will also forfeit $50 million and the parties will jointly recommend that he be sentenced to serve 15 years in prison. Before he was extradited, Arellano-Felix spent almost four years in custody in Mexico, from October 25, 2008 to August 31, 2012. Sentencing was set for August 19, 2013 at 9:30 a.m., before U.S. District Judge Larry A. Burns.

“We have effectively dismantled the leadership of a notorious cartel that operated with impunity for more than a decade,” Duffy said. “Given the mission’s overall success and the prosecution challenges of building a case against the highest-ranking members of a major trafficking organization, this resolution is a very favorable disposition for the United States.”

“Today’s guilty plea by Eduardo Arellano-Felix is the final major blow to this powerful and vicious drug trafficking organization whose criminal enterprise included an elaborate money laundering scheme,” said Special Agent in Charge Jose A. Gonzalez, IRS Criminal Investigation, Los Angeles Field Office. “IRS Criminal Investigators can and will unravel sophisticated money laundering schemes, working side-by-side with our law enforcement partners, in the dismantling of these dangerous and deadly drug cartels.”

San Diego FBI Special Agent in Charge Daphne Hearn said, “Todays guilty plea demonstrates the unwavering commitment of the FBI to continue working with our domestic and international law enforcement partners to disrupt and dismantle violent criminal enterprises such as the Arellano-Felix Organization, that instill fear and threaten the safety of our citizens.”

The resolution of this case was a long time in coming.

Arellano-Felix was first indicted in 1998, along with his brothers, on drug conspiracy charges. Then in 2002, prosecutors added charges of racketeering, money laundering and conspiracy to distribute and import marijuana and cocaine in a subsequent indictment. He was arrested by Mexican authorities in Tijuana, Baja California, Mexico on October 25, 2008, following a gun battle with a Mexican Special Tactical Team. A final order of extradition to the United States was granted in 2010.

After two years of unsuccessful appeals, Arellano-Felix was extradited by the government of Mexico to the United States on August 31, 2012, to face charges in the Southern District of California.

Brothers and former leaders of the AFO, Benjamin Arellano-Felix and Francisco Javier Arellano Felix, were captured in 2002 and 2006, respectively, and are currently serving sentences in the United States following their convictions for racketeering, drug trafficking, and money laundering charges. Ramon Arellano-Felix, the cartel's enforcer, was killed in a shootout with police in 2002.

In addition to the brothers, this office has convicted a long line of top AFO lieutenants, including, in part, Arturo Paez-Martinez in 2002, Ismael and Gilberto Higuera-Guerrero in 2007 and Jesus Labra-Aviles in 2010.

This case (Case Number: 97cr2520-LAB) was investigated by agents from the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation and prosecuted in the Southern District of California by Assistant United States Attorneys Joseph S. Green, James P. Melendres, and Daniel E. Zipp.

The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The investigation of Eduardo Arellano-Felix 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.

SUMMARY OF CHARGES IN GUILTY PLEAS

Count 1

Count 2

Title 18, United States Code, Sections 371 (Conspiracy to launder monetary instruments) Maximum penalty: 5 years of custody.

Title 21, United States Code, Sections 854(a) and 846 (Conspiracy to use and invest illicit drug profits) Maximum penalty: 10 years of custody.

United States Attorney Laura E. Duffy announced that Troy Teague, former Executive Director of the La Posta Gaming Commission ("Commission") pled guilty today in front of Magistrate Judge Jan Adler to embezzling $57,000 from the La Posta Band of Mission Indians.

According to court records, Teague served as Executive Director of the Commission from 2006 to 2011. In that capacity, he was responsible for: (1) creating the Commission's budget and maintaining the Commission's books and records; (2) issuing checks on behalf of the Commission; and (3) monitoring, reviewing and making payments on all Commission credit cards. Teague understood that any and all checks he issued B and all credit card charges B on the Commission account could only lawfully be used for legitimate La Posta business.

Despite the fact that Teague recognized that he could not use the Commission credit card or bank account for personal expenses, he used both the credit card and checking account for personal business, including: (i) membership dues at a gun club; (ii) Home Depot charges; (iii) car audio/video components; (iv) vacation expenses; (v) legal fees; (vi) a grain mill; (vii) restaurant expenses, (viii) car rentals; and (ix) entertainment (e.g, comedy club bill). Teague admitted that (between June 2009 and April 2011) he embezzled a total of $57,000 from La Posta. Thereafter, he paid the tribe's credit card bills and concealed from the Commission that they included his personal expenses.

"The United States Attorney's Office is committed to doing its part to enhance security in Indian Country,” said Assistant U.S. Attorney Jill Burkhardt, community outreach director and tribal liaison. “The diligent prosecution of federal crimes committed on reservations is an important complement to State and Tribal law enforcement efforts.

" U.S. Attorney Duffy praised the enforcement work by the FBI agents who diligently pieced together the full scope of the fraud.

"Today's conviction proves that Mr. Teague exploited and violated his position of trust as the Executive Director with the La Posta Band of Mission Indians and unjustly enriched himself at the expense of the tribe," said Daphne Hearn, Special Agent in Charge of the San Diego FBI Field Office. “The FBI is committed to ensuring those in positions of trust are held to the highest standards and anything less will be vigorously pursued and investigated.”

DEFENDANT   Criminal Case No. 13cr0852-MMA Troy Teague Age: 38 El Cajon, California   SUMMARY OF CHARGES

Offense: Title 18, United States Code, Section 1163 - Embezzlement and Theft from an Indian Tribal Organization
Maximum penalties: 5 years custody; $250,000 fine; 3 year supervised release.

  INVESTIGATING AGENCY

Federal Bureau of Investigation

Cesar Alfredo Meza-Garcia, a leader within the powerful Tijuana Cartel, was extradited from Mexico to the United States today to face drug charges in the Southern District of California. Meza- Garcia was arrested by Mexican law enforcement officers on September 26, 2012, at the request of the United States. Since his arrest in Mexico, Meza-Garcia has remained in custody pending extradition to the United States.

According to court documents, Meza-Garcia is the lead defendant in a 19-defendant indictment charging him with conspiracy to distribute cocaine and methamphetamine. He was a leader within the Tijuana Cartel, responsible for directing the movement of narcotics from Mexico into the United States. The indictment was handed up by a federal grand jury on June 15, 2012.

The charges stem from an Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) led investigation known as Operation Jackhammer II. Operation Jackhammer II focused on members of Meza-Garcia’s importation cell, which was responsible for smuggling methamphetamine, cocaine and marijuana into Chula Vista and San Diego for distribution throughout the state of California.

United States Attorney Duffy praised the Mexican government for its assistance in the extradition of Meza-Garcia and noted that violent drug cartels continue to menace both countries. “Drug trafficking is one of the most serious national security threats the United States faces. This is one more step toward securing the communities on both sides of the border.”

Duffy also commended the Organized Crime Drug Enforcement Task Force (OCDETF) for the coordinated team effort in handling this investigation. Agents and officers from HSI and the Chula Vista Police Department participated in this OCDETF investigation. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The OCDETF program was created to consolidate and utilize all law enforcement resources in this country’s battle against organized crime and major drug trafficking organizations.

“This extradition serves as a stern warning to other fugitives who think they can evade U.S. law enforcement by hiding out in Mexico,” said Derek Benner, special agent in charge for HSI in San Diego. “I commend our Mexican law enforcement partners for their hard work, which helped us immensely in our effort to dismantle a dangerous criminal enterprise that not only controlled a major drug smuggling corridor in Tijuana, but operated a large meth trafficking organization on both sides of the border.”

The defendant is expected to be in federal court in San Diego tomorrow, March 8, 2013, at 10:30 a.m., before United States Magistrate Judge Jan Adler.

Law enforcement continues to seek the public's assistance in locating fugitive defendants Salvador Alcala-Gonzales, aka Chava, Miguel Angel Bravo-Pena, and Jose Luis Casillas, all of whom are believed to be in Mexico. Anyone with information regarding these fugitives may contact HSI at 1-866-DHS-2- ICE.

DEFENDANT   Case Number 12CR2414-WQH Cesar Alfredo Meza-Garcia       SUMMARY OF CHARGES

Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Controlled Substances
Maximum penalties: Life in prison, a $10,000,000 fine and 5 years of supervised release

  INVESTIGATING AGENCIES

U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
Chula Vista Police Department

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

United States Attorney Laura E. Duffy announced that three civilian contractors who until recently worked at Camp Pendleton appeared today in federal court, and pled guilty to charges stemming from their theft of expensive medical equipment that the military had planned to ship overseas to treat injured Marines.

According to the Indictment, defendants Henry Bonilla, Richard Navarro and Michael Tuisee worked in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard Camp Pendleton -- the United States Marine Corps’ largest West Coast expeditionary force training facility. 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces throughout the world. By virtue of their employment as defense contractors, the defendants had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses. In their plea agreements and at today’s hearing, each defendant admitted to participating in a conspiracy to steal medical equipment from 1st MEDLOG, including ultrasound machines, ventilators, hydroclaves, defibulators, headlights, and laryngoscopes. The defendants repeatedly stole these costly medical items, loaded them into their personal vehicles, and surreptitiously sold them to medical equipment resellers – often meeting with customers during nighttime rendezvous in secluded parking lots. The defendants admitted that the combined value of the stolen medical equipment exceeded $3 million.

The defendants pled guilty today at a hearing held before Magistrate Judge William McCurine, Jr., and their guilty pleas are subject to final acceptance by District Court Judge Cathy A. Bencivengo. All three defendants are scheduled to be sentenced on May 24, 2013 at 9 a.m. by Judge Bencivengo.

United States Attorney Duffy commented: “The defendants stole medical equipment that was meant to be shipped to our troops, secretly transported it off of Camp Pendleton, and sold it for their own personal gain. Today’s guilty pleas advance the goals of rooting out corruption among our area defense contractors, and sending a strong message that the Department of Justice will vigorously investigate and prosecute those who seek to profit at the expense of our men and women in uniform.” Duffy reminded the public that these charges were the result of an ongoing investigation into theft of valuable property aboard Camp Pendleton, and asked the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil if they have any information relevant to that investigation.asdf

DEFENDANTS   Case Number: 13cr0338-CAB Henry Bonilla
Richard Navarro
Michael Tuisee       SUMMARY OF CHARGES

Count 1: Conspiracy to Engage in Theft of Government Property, Title 18, United States Code, Section 371 (all defendants)
Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

  INVESTIGATING AGENCY

Naval Criminal Investigative Service

San Diego - Carlos Alberto Garcia, who made thousands of dollars pimping out underage girls using internet ads, was sentenced in federal court this morning to 12 years in prison plus 10 years supervised release for sex trafficking of children. Garcia pleaded guilty in August and has been in custody since his arrest on June 26, 2012.

The case began as a result of investigations by San Diego Police Department vice detectives in November 2011 and January 2012. Detectives searched online advertisements for escorts, set up dates and discovered the underage girls working as prostitutes. Garcia was eventually identified as their pimp.

According to court documents, one of the girls, age 17, described Garcia as “ruthless” and “crazy” and said he physically assaulted her for hiding $300. Garcia beat her, stripped her, forced her into a cold shower, poured ice on her, and made her stand in front of an air conditioner.

He then he took her to the Fashion Valley shopping mall and, using the money she’d earned from prostitution, bought himself $685 sneakers at the Gucci store, according to court records.

Human trafficking is the fastest growing criminal industry in the world today. It is second only to drug trafficking on the list of the biggest and most lucrative illicit enterprises.

Last year, the Department of Justice set a new record in the number of defendants charged in human trafficking cases in a single year. And over the last three years, there has been a 30 percent increase in the number of human trafficking cases charged. Human trafficking cases primarily involve sexual slavery or forced labor.

In the Southern District of California, which includes San Diego and Imperial counties, the U.S. Attorney’s office has seen a 600 percent increase in human trafficking cases in the last five years – from just a few to a couple dozen, with scores of defendants charged. Many of these cases involve the sex trafficking of children.

San Diego is a hot spot for these crimes. According to the FBI, this city is among the 13 most active child sex trafficking areas in the nation. Also on the list are Los Angeles and San Francisco.

Here are a few trafficking trends:

-The victims are getting younger. The average entry age of American minors into the sex trade is 12-14 years old. They’re not all runaways from broken homes - they’re plucked from malls and schools and through the internet via social media sites such as Facebook and Twitter.

-Gang members are increasingly dealing in the very lucrative crime of trafficking of young girls, and prosecutors around the country are using the RICO statute against them. Federal prosecutors in San Diego have one case in which a federal grand jury indicted 38 defendants and one LLC on a RICO charge. The indictment also included the criminal forfeiture of a hotel where many of the illegal acts took place.

According to court records, three Oceanside Crips gangs teamed up to operate an elaborate sex trafficking ring using the characteristics of a business enterprise - including deals with hotels and motels. Recruitment efforts focused on vulnerable underage girls. They were manipulated with promises of a luxurious lifestyle, intimidation and actual or threatened violence. A prostitute who broke the “rules” would be beaten or subjected to other humiliating punishments. They were traded to other pimps and transported to other states as if they were someone’s property.

Of the 39 defendants charged, 35 defendants pled guilty, three were dismissed, one was murdered in a gang related shooting. The defendants who pled guilty received sentences as high as 14 years in prison.

“These prosecutions, here and around the country, are yielding sentences that send an unmistakable message that human traffickers who prey on the most vulnerable among us will be brought to justice,” said U.S. Attorney Laura Duffy. “We have a lot of work to do. But together with our law enforcement partners, our work has saved lives and restored dignity to scores of victims. We’ve secured long prison sentences against individual traffickers and dismantled organized criminal enterprises, and we will keep on fighting to obliterate this great human rights tragedy.”

A few other examples of similar cases:

-Maurice Lerome Smith was sentenced in December 2011 to 30 years in prison for sex trafficking of children and by force, fraud and coercion. He was indicted in February, 2011, and was convicted by a jury in May 2011. According to court records, Smith picked up his victim on University Avenue: “Defendant ordered her into the car. (The 17-year-old victim) stated that Defendant told her to get in or she would be ‘in pieces in the trunk.’ Defendant drove (victim) to his residence in Oceanside, physically assaulted her with a belt, and had sex with her. The next morning, Defendant drove her down to the Motel 6 on Clairemont to work as a prostitute. Defendant told her to make $600.00. Defendant booked the room and left her. (The victim) stated she was afraid of Defendant.” Please see 11-cr-0471-BEN-1.

-Jonathan Jamar Sanders was sentenced to 19 years in prison in May 2012 after pleading guilty to sex trafficking of children, aiding and abetting, in January 2012. According to court documents, Sanders met a 15-year-old girl on the street in National City. At first he took her out on dates and started a sexual relationship with her. Then he forced her into prostitution. The girl would later tell federal agents that he’d threatened to beat her if she didn’t do it. She believed him, because she’d seen him violently attack another girl – hitting and kicking her so hard while she was on the ground that her body lifted up from the force. Because of our efforts, that gang member was convicted of sex trafficking of children. Please see 11cr1896-DMS.

-Randy Martell Ballard was sentenced to 12.5 years in prison after pleading guilty in November 2012 to sex trafficking of children. According to court documents, Ballard met a fourteen-year-old girl in El Paso, Texas and transported her to San Diego for the purpose of engaging her in prostitution. He purchased a bus ticket for her using a false name. Court documents further show that Ballard posted online prostitution ads on the Internet with a phone number that the minor had in her possession and provided the minor with false identification documents. Please see 12cr2259-BEN.

-Ralph Darnell Redd was sentenced in February 2012 to 15 years in prison after he was convicted by a jury in July 2011 of sex trafficking of children, sexual exploitation of a minor, and distribution of child pornography. According to court records, he also used internet ads to sell the sexual services of a 16-yearold girl who was tattooed with his moniker. Redd penned an autobiography in which he mentions his gang membership, past crimes and convictions and how “spending the whole 90's in and out of incarceration delayed my process of being successful as a rap artist.” Please see 10cr2740-W.

DEFENDANT   Case Number: 12cr2999 Carlos Alberto Garcia       SUMMARY OF CHARGE

Title 18, United States Code, Sections 1591(a) and (b) - Sex Trafficking of Children

  INVESTIGATING AGENCIES

San Diego Police Department

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DEFENDANTS   Case Number: 12cr3320H Robert Ehnow
Joanne Loehr
Age: 46
Age: 52
Coronado, California
La Jolla, California

Centerline Industrial Inc., a California corporation

  SUMMARY OF CHARGES IN CASE NO. 12cr3320H

Count 1: Conspiracy to commit bribery, in violation of Title 18, United States Code, Section 371 (all defendants) - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment. (All defendants found guilty on Count One.)

Counts 2 to 7: Bribery, in violation of Title 18, United States Code, Section 201 (defendant Ehnow) - Maximum penalties (per count): Fifteen years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment. (Defendant Ehnow found guilty on Count Seven, not guilty on Counts Two through Six)

Counts 8 to 12: Bribery, in violation of Title 18, United States Code, Section 201 (defendants Loehr and Centerline) - Maximum penalties (per count): Fifteen years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment. (Defendants Loehr and Centerline found guilty on Counts Ninth through Twelve, not guilty on Count Eight)

Case Number: 12-CR-4071-LAB   Sentencing Date: March 4, 2012

Kenneth Paul Ramos

  Case Number: 12-CR-1055-LAB   Sentencing Date: September 10, 2012 Donald Vangundy
Kiet Luc
Brian Delaney
David Lindsay
John Newman
Michael Graven
Paul Grubiss Case Number: 10-CR-3737-LAB

Jesse Denome

  INVESTIGATING AGENCIES

Federal Bureau of Investigation
Defense Criminal Investigative Service
Internal Revenue Service - Criminal Investigation
General Services Administration - Office of Inspector General
Naval Criminal Investigative Service

United States Attorney Laura E. Duffy announced that Brandon Johnson was sentenced today in federal court in San Diego by the Honorable Anthony J. Battaglia to serve six months in custody, followed by one year of supervised release, for his role in a conspiracy to commit sports bribery in connection with influencing the outcome of University of San Diego (USD) basketball games during the 2009-2010 season and soliciting a USD player to do the same during the 2010-2011 season. Johnson pled guilty to an indictment charging him with conspiring to commit sports bribery on November 15, 2012. To date, eight of the ten defendants indicted have pled guilty.

According to court documents and admissions from co-defendants’ guilty pleas, Brandon Johnson, the all-time points and assists leader at USD, received bribe money to influence the outcome of basketball 2 games during the 2009-2010 season while he was a member of USD’s basketball team. Utilizing Johnson, the conspiracy profited by placing bets at Las Vegas casinos on games Johnson influenced. Co-defendant Steve Goria, who was sentenced to 30 months imprisonment in October 2012, admitted that the conspiracy profited more than $120,000 from the game-fixing scheme. Johnson admitted in his guilty plea that during the 2010-2011 season, he solicited a then-current USD basketball player to influence the outcome of basketball games for bribe money.

Judge Battaglia ordered the defendant to report on May 31, 2013 to begin serving his sentence.

DEFENDANT   Criminal Case No. 11CR1345-AJB Brandon Johnson       SUMMARY OF CHARGES

Count 1: Title 18, United States Code, Section 371 - Conspiracy

  INVESTIGATING AGENCY

Federal Bureau of Investigation

United States Attorney Laura E. Duffy announced that Kathleen Wurts was sentenced today in federal court in San Diego to serve 60 months in federal prison for conspiracy to commit mail fraud, wire fraud, and bank fraud, in connection with a $17 million Internet fraud scheme. Ms. Wurts entered a guilty plea to one count of the indictment in April 2012. United States District Judge John A. Houston also ordered that Wurts serve a three year term of supervised release following her release from custody. Due to the number of victims, the location of victims worldwide, and the complexity of the case, Judge Houston found that restitution was indeterminate.

In her plea, Wurts admitted that through at least April 2010, she engaged in a conspiracy to defraud individuals who used Internet websites (such as Craigslist and Yahoo!) to find employment, purchase and sell items, and rent and purchase real property. According to court documents, Wurts' co-conspirators mailed her counterfeit money orders and travelers' cheques from outside the United States (Nigeria, Abu Dhabi, and the United Kingdom) and provided her with stolen bank account and credit card numbers via emails and chat logs. Once received, Wurts created hundreds of fraudulent checks using the stolen bank account numbers. She then mailed the counterfeit money orders, travelers' cheques, and fraudulent checks to the victims using stolen credit card information to pay for the postage. The victims generally expected to receive a fixed amount for, as an example, the items they were selling, however, Wurts mailed them a money order, travelers’ cheque, or check in an amount that exceeded the asking price. The victims were then directed to deposit the monetary instruments into their own accounts, keep a certain percentage “for their trouble” and wire-transfer the excess portion of the stolen amount to an overseas account. Wurts received more than $800,000 in counterfeit money orders and travelers' cheques and created more than $17.2 million in fraudulent checks using stolen bank account numbers. Wurts mailed these fraudulent monetary instruments to victims and paid more than $13,000 for the postage using stolen credit card numbers.

This case was investigated by federal agents with Immigration and Customs Enforcement's Homeland Security Investigations and the United States Postal Inspection Service.

DEFENDANT   Criminal Case No. 11CR1952-JAH Kathleen Wurts       SUMMARY OF GUILTY PLEA

Title 18, United States Code, Section 1349 - Conspiracy to Commit Mail, Wire, and Bank Fraud

  INVESTIGATING AGENCIES

Immigration and Customs Enforcement's Homeland Security Investigations
United States Postal Inspection Service

United States Attorney Laura E. Duffy announced the sentencing of David Kinh Duc Tran in federal court yesterday based upon his convictions for production of child pornography, in violation of Title 18, United States Code, Section 2251(a) and (e). United States District Judge Thomas J. Whelan sentenced the defendant to serve 420 months (35 years) in federal prison and also ordered the defendant to serve 5 years of supervised release and register as a sex offender.

On April 25, 2012, during the second day of his jury trial, Tran elected to plead guilty to all five counts of producing child pornography outside of the United States, in violation of Title 18, United States Code, Sections 2251(a) and (e). Specifically, he admitted to producing five videos of sexual exploitation of several children while he was teaching in Vietnam.

According to court documents, Tran stated that he lived in Vietnam for approximately two years and returned to the United States before his arrest. Based on a tip, on August 19, 2010, the San Diego Internet Crimes Against Children Task Force (ICAC) executed a search warrant on Tran's motel room. 2 Agents seized a laptop computer that was sent to the Regional Computer Forensics Laboratory (RCFL) to be analyzed. That analysis revealed a video of Tran teaching English in Vietnam and videos of the defendant having sex with girls who appear to be between 6 and 12 years old. The defendant has been in custody since his arrest in August 2010.

This case stems from an investigation by San Diego Police Department officers assigned to the San Diego Internet Crimes Against Children Task Force, whose members include the Federal Bureau of Investigation, the Immigration and Customs Enforcement's Homeland Security Investigations, the San Diego County Sheriff's Department, the Chula Vista Police Department, the United States Attorney's Office, the San Diego District Attorney's Office, the United States Postal Inspection Service, the Naval Criminal Investigative Service, the United States Marshals Service, the Regional Computer Forensics Laboratory, the Defense Criminal Investigative Service, the National City Police Department, the La Mesa Police Department, the Oceanside Police Department, the El Cajon Police Department, the San Diego State University Police Department, the Riverside County Sheriff's Department, and the Riverside County District Attorney's Office. For additional information regarding ICAC, please visit www.sdicac.org.

This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative designed to protect children from online exploitation and abuse. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about PSC and Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

DEFENDANT   Case Number: 10cr3668W David Kinh Duc Tran       SUMMARY OF CHARGES Five Counts

Title 18, United States Code, Section 2251(a) and (e) (Production of Images of Minors Engaged in Sexually Explicit Conduct)

  INVESTIGATING AGENCIES

San Diego Internet Crimes Against Children (ICAC) Task Force

SAN DIEGO, CA – A federal jury today convicted four Somali immigrants, including a popular imam at a City Heights mosque, of conspiring to provide material support to the terrorist group al-Shabaab.

The jury found that the four men - Basaaly Saeed Moalin, a cabdriver in San Diego; Issa Doreh, a worker at a money transmitting business that was the conduit for moving the funds; Mohamed Mohamed Mohamud, the imam at a mosque frequented by the city’s immigrant Somali community; and Ahmed Nasiri Taalil Mohamud, a cabdriver from Anaheim – conspired to raise money for the foreign terrorist organization and send it back to Somalia.

During the three-week trial, the United States presented evidence that Moalin, Mohamud, Doreh and Nasir conspired to provide money to al-Shabaab, a violent and brutal militia group in Somalia that engages in suicide bombings, targets civilians for assassination, and uses improvised explosive devices. In February 2008, the U.S. Department of State formally designated al-Shabaab as a foreign terrorist organization.

At trial, the jury listened to dozens of the defendants’ intercepted telephone conversations, including many conversations between defendant Moalin and Aden Hashi Ayrow, one of al-Shabaab’s most prominent leaders who was subsequently killed in a missile strike on May 1, 2008. In those calls, Ayrow implored Moalin to send money to al-Shabaab, telling Moalin that it was “time to finance the Jihad.” Ayrow told Moalin, “You are running late with the stuff. Send some and something will happen.” In the calls played for the jury, Ayrow repeatedly asked Moalin to reach out to defendant Mohamud – the imam – to obtain funds for al-Shabaab.

According to the evidence presented at trial, the defendants conspired to transfer the funds from San Diego to Somalia through the Shidaal Express, a now-defunct money transmitting business in San Diego.

The United States also presented a recorded telephone conversation in which defendant Moalin gave the terrorists in Somalia permission to use his house in Mogadishu, Somalia, telling Ayrow that “after you bury your stuff deep in the ground, you would, then, plant the trees on top.” Prosecutors argued at trial that Moalin was offering a place to hide weapons.

When Moalin cautioned, however, that the house could be easily identified from afar, Ayrow replied: “No one would know. How could anyone know, if the house is used only during the nights?”

According to United States Attorney Laura E. Duffy, the prosecution was the result of a lengthy investigation by the San Diego Joint Terrorism Task Force. She said she is pleased with the verdict. “Justice was served today in San Diego,” Duffy said. “The jury clearly did not accept defense claims that months of intercepted conversations about bullets, bombings and Jihad were actually conversations about their charitable efforts for orphans and schools.

“This case proves that our efforts to detect and disrupt terrorist financing – and prevent the violence that goes along with it - has paid off. The United States Attorney’s Office is dedicated to investigating and vigorously prosecuting any persons who provide support or resources to terrorists or foreign terrorist organizations. I commend the hard work and dedication of San Diego’s Joint Terrorism Task Force in this case.”

FBI Special Agent in Charge Daphne Hearn commented, "While the FBI is not concerned with the legal transfer of funds to family, friends and charities overseas, when individuals provide material support to designated terrorists or terrorist organizations, the FBI and our Joint Terrorism Task Force partners will bring all resources to bear, to investigate these plots with a common goal of protecting all Americans from those who wish to do us harm.”

“These convictions illustrate the importance of collaboration when promoting national security,” said Derek Benner, special agent in charge for ICE Homeland Security Investigations in San Diego. “Protecting our nation’s security is our top priority, and I commend all of the federal law enforcement partners who worked tirelessly to make this a successful investigation. ”

Al-Shabaab is a terrorist organization based in Somalia, with objectives including the overthrow of the Transitional Federal Government (TFG), the elimination of African Union support for the TFG. Al-Shabaab has engaged in, and used, violence, intimidation and acts of terrorism, including suicide bombings, in Somalia and elsewhere to further its objectives.

Here’s a breakdown of the verdict:

Defendant Moalin: Convicted of five counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, conspiracy to launder monetary instruments, providing material support to terrorists and providing material support to foreign terrorist organization

Defendant Mohamed Mohamed Mohamud: Convicted of four counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, conspiracy to launder monetary instruments, and providing material support to foreign terrorist organization

Defendant Issa Doreh: Convicted of four counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, conspiracy to launder monetary instruments, and providing material support to foreign terrorist organization

Defendant Ahmed Nasir Taalil Mohamud: Convicted of threer counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, and conspiracy to launder monetary instruments

Sentencing was set for May 16 at 9 a.m. before U.S. District Judge Jeffrey T. Miller.

This case was prosecuted in federal court in San Diego by Assistant United States Attorneys William Cole and Caroline Han and Department of Justice Trial Attorney Steven Ward. This case was investigated by the San Diego Joint Terrorism Task Force; the Federal Bureau of Investigation; the Department of Homeland Security, Immigration and Customs Enforcement; and the Department of Homeland Security, Customs and Border Protection.

Criminal Case No. 10cr4246-JM DEFENDANTS   Criminal Case No. 10-CR-4246-JM Basaaly Saeed Moalin
Mohamed Mohamed Mohamud
Issa Doreh
Ahmed Nasir Taalil Mohamud       SUMMARY OF CHARGES

Count 1 (all defendants): Title 18, United States Code, Section 2339A(a) - Conspiracy to Provide Material Support to Terrorists; Maximum penalties: 15 years in prison and a $250,000 fine.

Count 2 (all defendants): Title 18, United States Code, Section 2339B(a)(1) - Conspiracy to Provide Material Support to Foreign Terrorist Organization; Maximum penalties: 15 years in prison and a $250,000 fine.

Count 3 (all defendants): Title 18, United States Code, Section 1956(h) - Conspiracy to Launder Monetary Instruments; Maximum penalties: 20 years in prison and a $500,000 fine.

Count 4 (Basaaly Moalin): Title 18, United States Code, Section 2339A(a) - Providing Material Support to Terrorists; Maximum penalties: 15 years in prison and a $250,000 fine. Count 5 (defendants Basaaly Moalin, Mohamed Mohamed Mohamud, and Issa Doreh): Title 18, United States Code, Section 2339B(a)(1) - Providing Material Support to Foreign Terrorist Organization; Maximum penalties: 15 years in prison and a $250,000 fine.

  PARTICIPATING AGENCIES

San Diego Joint Terrorism Task Force
Federal Bureau of Investigation Department of Homeland Security, Immigration and Customs Enforcement
Department of Homeland Security, Customs and Border Protection

Twelve suspected members of a methamphetamine and cocaine trafficking ring were arrested early Wednesday and today at the culmination of a yearlong investigation by the Drug Enforcement Administration and the Major Mexican Traffickers’ Strike Force. All but two of the defendants appeared in federal court this afternoon for arraignment on drug conspiracy charges.

These arrests are associated with the unsealing of a criminal complaint Wednesday charging 19 defendants with conspiracy to traffic methamphetamine and cocaine. The investigation, known as “Operation Crystal Haven,” focused on a long-term distribution ring which was importing methamphetamine and cocaine from Tijuana- and Guadalajara-based cartels into San Diego County, where it was then distributed in areas of northern San Diego County and elsewhere.

The task force is a multi-agency effort to focus on Mexico-based drug trafficking organizations with ties to the San Diego area. Its members include the DEA, FBI, IRS, and ICE, with assistance from other federal and local law enforcement agencies as well.

Including the previous arrest of another defendant in the case, as of today, a total of 13 defendants are in custody, charged with distributing methamphetamine and cocaine.

“We are relentlessly pursuing major trafficking organizations that operate in our neighborhoods and imperil our children,” said U.S. Attorney Laura Duffy. “It’s gratifying to wrap up a lengthy investigation like this one with many arrests and drug seizures, knowing the community is safer because of our efforts.”

“The conclusion of this investigation marks the end of a large scale methamphetamine transportation and distribution organization that has been operating in San Diego County,” says San Diego Drug Enforcement Administration Acting Special Agent in Charge William Sherman. “This organization was distributing multi-pound quantities of methamphetamine in our cities, and making a huge profit. Throughout the course of the investigation, DEA and its law enforcement partners seized large quantities of methamphetamine and arrested 13 people who will not be selling their product on our streets.”

N. Dawn Mertz, Acting Special Agent in Charge of IRS Criminal Investigation for the Los Angeles Field Office made the following comment on Operation Crystal Haven, “All drug trafficking organizations are motivated by profit and greed. By working closely with our law enforcement partners and using our financial expertise, IRS Criminal Investigation will continue to unravel the illicit financial networks created and used to launder the money generated by these narcotics organizations.”

Daphne Hearn, Special Agent in Charge, San Diego Field Office, said: “Through the combined efforts of local, state, and federal law enforcement, a significant methamphetamine criminal enterprise has been disrupted. The FBI will continue to work with our partners to make our communities a safer place.”

“ICE Homeland Security Investigations is committed to working together with our federal partners to combat dangerous drug trafficking that threatens public safety in our communities, “ said Derek Benner, special agent in charge for ICE Homeland Security in San Diego. “ Our mutual goal is to dismantle these distribution networks that are at the core of illicit drug sales in the U.S. There is no 3 better strategy to strengthen our law enforcement resources and achieve our goals than joint operations. ”

DEFENDANTS   Case Number: 13mj0608 JOSE ISIDRO RODRIGUEZ-LARA
DAVID AGUILAR
ALMA JAIME
MANUEL MARCIAL
FELIPE GARCIA-GALLEGOS
GUADALUPE NATALIE PEREZ
JOSE LUIS LOPEZ
ROSALIA LOURDES NIEVES
ALICIA REYNA MARIN
LEONARDO GARCIA-GAYTAN
NANCY BLANCAS-PENA
SYLVIA SANCHEZ-ZARATE
SYLVIA LARA
JULIO CESAR RODRIGUEZ-ZARATE
MIGUEL GUTIERREZ-MARANTES
JOSE JUAN MANCILLA-MONJE
EDSON SOLIS-VALDOVINOS
NATHAN KAHAKULANI YASSO
HERNAN SEBASTIAN BERNAL   Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/21/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
In state custody
Arrested 2/20/13
Arrested 2/20/13
Fugitive
Fugitive
Arrested 2/20/13
Fugitive
Fugitive
Fugitive
Fugitive
  SUMMARY OF CHARGES

Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million

  AGENCIES

Drug Enforcement Administration
Federal Bureau of Investigation
Internal Revenue Service
Department of Homeland Security, U.S. Immigration and Customs Enforcement, U.S. Customs and
Border Protection
San Diego County Sheriff's Department
Los Angeles County Sheriff's Department

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

United States Attorney Laura E. Duffy announced today that former U. S. Marine Sergeants Luis Gilbert Menchaca and Manuel Ramos Padilla have been indicted on bribery and fraud charges involving the filing of false travel and lodging claims at the Marine Corp Air Station (MCAS) Miramar.

The indictment alleges that from 2002 to 2011, Menchaca served in the U. S. Marine Corps reserves, and periodically received orders calling him onto active duty at MCAS Miramar. Ramos, a fellow Marine, worked in an administrative office at Miramar that processed lodging claims for reservists like Menchaca. The indictment alleges that Ramos and Menchaca conspired to defraud the Defense Department by submitting false monthly claims for lodging reimbursements for Menchaca, and by creating fake rental bills to substantiate those false claims. The address in San Diego that Menchaca claimed to be renting was, in fact, a nonexistent street number in Mission Valley.

According to the indictment, Ramos knowingly signed and approved dozens of false lodging claims for Menchaca and another reservist, a Staff Sergeant (identified only by initials in the indictment) who has been charged elsewhere. Each of the two reservists received tens of thousands of dollars in lodging payments as a result of the scheme. In exchange for facilitating the fraud, Ramos in turn demanded and received thousands of dollars of bribe payments from the reservists. Many of these bribes were paid by personal checks made payable to Ramos; other bribes were paid in cash.

The ten-count indictment charges both defendants with conspiracy to commit bribery and false claims in count one. Counts two through four charge Ramos with substantive counts of bribery. The remaining six counts charge the defendants with making false claims to the United States.

United States Attorney Duffy stated, “Investigating and prosecuting bribery is one of our top priorities. With our nation’s military budget being strained to the breaking point, public corruption that drains needed U. S. Marine Corps resources will not be tolerated.”

The Naval Criminal Investigative Service notes that fraud in the armed services is not a victimless crime; it squanders hard-earned tax dollars and erodes the confidence that citizens place in their military. Charles Warmuth, NCIS Special Agent in Charge for Marine Corps West Field Office, stated "The Department of the Navy is facing massive budget cuts in the near future so it is as important as ever that offenders are found and held accountable.”

Menchaca was arraigned today before U. S. Magistrate Judge Karen S. Crawford and Ramos was arraigned on January 24 before U.S. Magistrate Judge Barbara L. Major. Both defendants pled not guilty. The case has been assigned to U. S. District Judge Dana M. Sabraw. The next scheduled court appearance is March 1, 2013 for a motion hearing.

DEFENDANTS   Case Number: 12cr5099-DMS Manuel Ramos-Padilla
Luis Gilbert Menchaca       SUMMARY OF CHARGES

Count 1: Conspiracy to commit bribery and false claims, in violation of Title 18, United States Code, Section 371 (all defendants) - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.

Counts 2 to 4: Bribery, in violation of Title 18, United States Code, Section 201 (defendant Ramos) - Maximum penalties (per count): Fifteen years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.

Counts 5 to 7: False claims, in violation of Title 18, United States Code, Section 287 (defendants Ramos and Menchaca) - Maximum penalties (per count): Five years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.

Counts 8 to 10: False claims, in violation of Title 18, United States Code, Section 287 (defendant Ramos) - Maximum penalties (per count): Five years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.

  INVESTIGATING AGENCY

Naval Criminal Investigative Service

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

United States Attorney Laura E. Duffy announced that Robert Mercado, a high-ranking Mexican Mafia associate from San Diego, was sentenced today by United States District Judge Anthony J. Battaglia to 14 years in custody after Mercado pleaded guilty to Violent Crime in Aid of Racketeering, in violation of Title 18, United States Code, Section 1959. Mercado was one of thirty-six individuals arrested last year as part of "Operation Carnalismo," an investigation that targeted the Mexican Mafia's organized criminal activity. "Operation Carnalismo" was one of three similar investigations charged at the same time that focused on Mexican Mafia crime, which resulted in well over 100 arrests of local gang members and associates.

Court filings described the Mexican Mafia as a notorious, violent prison gang that controls a large portion of the criminal activity committed by Southern California Hispanic street-gang members. The Mexican Mafia controls the criminal activity of its subsidiary gangs through the extortionate collection of the proceeds from other criminal activity, such as drug trafficking. These extortion payments, commonly referred to as "taxes," are collected for the benefit of members by gang associates like Mercado. The Mexican Mafia and its associates engage in a variety of crime in order to maintain their presence in the criminal world, including murder, assault, kidnapping, extortion and drug trafficking.

As part of his plea, Mercado admitted that he carried out a variety of crimes in support of the Mexican Mafia, including assault with a dangerous weapon (stabbing), drug trafficking and extortion. Filings with the Court revealed that Mercado was a trusted lieutenant to convicted Mexican Mafia Member Salvador Colabella. Colabella had several independent methamphetamine-trafficking organizations under his command. Mercado and others took money and cars from a number of drug dealers through violence or the threat of violence. In one particular incident, Mercado admitted stabbing a drug dealer (and twisting the knife in order to maximize the damage) because he believed that the drug dealer was not properly paying taxes to Colabella. After the stabbing, Mercado and an associate sent a third member of their group to the hospital in order to prevent the injured drug dealer from speaking with the police. Adding insult to injury, Mercado and his associate further demanded that the drug dealer give them his car, which he did later that evening after being released from the hospital. As part of his plea, Mercado also admitted that he sold heroin that was provided to him by the same victim of his violent assault.

United States Attorney Duffy praised the members of the Federal Bureau of Investigation's Violent Crimes B Gang Group ("VCTF-GG"), which led this investigation, for their continued, outstanding work in pursuit of Mexican Mafia crime. The VCTF-GG is a federal task force comprised of investigators from the FBI, Bureau of Prisons, and the San Diego, Chula Vista, and National City Police Departments. Duffy added, " We will continue to work tirelessly in order to ensure that our neighborhoods remain safe from organized gang activity through the successful prosecutions of cases like this. Gang members must know that their actions have serious consequences under federal law."

DEFENDANT   Criminal Case No. 12CR290-AJB Robert Mercado       PROGRESS OF CASES CHARGED AS PART OF OPERATION CARNALISMO

Summary: As of February 15, 2013, 30 of 36 defendants have been convicted and 12 of those 30 have been sentenced.

12CR290-AJB - Convictions

Salvadore Colabella - RICO conspiracy
Jose Luis Mercado - RICO conspiracy
Robert Mercado - Violent Crime in Aid of Racketeering (168 months in custody)
Maria de Jesus Claudia Ochoa - RICO conspiracy
Silvano Hernandez - RICO conspiracy
Jose Briseno-Contreras - RICO conspiracy (46 months in custody)

12CR291-AJB - Convictions

Ramon Agredano - Conspiracy to distribute methamphetamine (84 months in custody) Ricardo Cornejo - Conspiracy to distribute methamphetamine (135 months in custody) David York - Conspiracy to distribute methamphetamine
Guillermo Chaidez - Conspiracy to distribute methamphetamine (120 months in custody) Adrian Dominguez - Conspiracy to distribute methamphetamine
Charles Smith - Conspiracy to distribute methamphetamine
Anna Sheneman - Conspiracy to distribute methamphetamine (93 months in custody) Esteban Rodriguez - Conspiracy to distribute methamphetamine (60 months in custody)

12CR292-AJB - Convictions

Juan Guerrero - Conspiracy to distribute methamphetamine (135 months in custody) Jorge Moreno - Conspiracy to distribute methamphetamine
Eduardo Moreno - Conspiracy to distribute methamphetamine (120 months in custody) Allen Mundell - Conspiracy to distribute methamphetamine
Brett Youkel - Conspiracy to distribute methamphetamine (120 months in custody)
Lacy McElroy - Conspiracy to distribute methamphetamine (100 months in custody)

12CR293-AJB - Convictions

Alfredo Bazurto - Conspiracy to distribute methamphetamine
Charles Monroe - Conspiracy to distribute methamphetamine
Jose Pedro Covarrubias - Conspiracy to distribute methamphetamine (120 months in custody)
George Chavez - Conspiracy to distribute methamphetamine
Jose Esparza - Conspiracy to distribute methamphetamine
John Atkinson - Conspiracy to distribute methamphetamine (120 months in custody) Annabel Vasquez - Conspiracy to distribute methamphetamine
Fantaja Deleal - Conspiracy to distribute methamphetamine (78 months in custody)

12CR294-MMA - Convicted

Carlos Lozano - Distribution of methamphetamine (57 months in custody)

  INVESTIGATING AGENCIES

Federal Bureau of Investigation
Chula Vista Police Department
San Diego County Sheriff's Department
National City Police Department
San Diego Police Department
San Diego County District Attorney's Office
U.S. Bureau of Prisons
California Department of Corrections and Rehabilitation
San Diego County Probation
Department, Immigration and Customs Enforcement's Homeland Security Investigations
Internal Revenue Service-Criminal Investigations

Former San Diego Mayor Maureen O'Connor entered a deferred prosecution agreement today in which she acknowledged misappropriating millions of dollars from her deceased husband's charitable foundation. As part of the agreement, O'Connor agreed to pay $2,088,000 in restitution to the foundation, settle any and all tax liability resulting from her receipt of these funds, and receive treatment for her gambling addiction.

According to documents filed in the proceeding, O'Connor was married to Robert O. Peterson (the Founder of the Jack in the Box restaurant chain) from 1977 until his death in 1994. Prior to his death, Peterson and others created the R.P. Foundation ("Foundation"). According to its Articles of Incorporation, "no part of the net earnings, properties, or assets shall enure to the benefit of any [Foundation] trustee . . . ." Defendant O'Connor was one of the three Trustees who were specifically prohibited from receiving a benefit from the Foundation. Prior to 2008, in accordance with its charter, the Foundation provided money to various charities, such as City of Hope, the Alzheimer's Association, Sharp Healthcare, Little Wishes Foundation, San Diego Hospice, and the John Burton Foundation.

As revealed in court documents, between 2000 and 2009, O'Connor won more than $1 billion while gambling in various casinos in Las Vegas, Atlantic City and San Diego. Despite these immense winnings, she suffered even larger gambling losses - resulting in a sizable net loss. Indeed, by early 2008, she incurred large, outstanding gambling debts at a number of different casinos. In order to stay afloat financially and continue her gambling spree, O'Connor liquidated her savings, sold numerous real estate holdings and auctioned valuable personal items. She also obtained second and third mortgages on her personal residence in La Jolla, California.

By September 2008, O'Connor had few, if any, assets that had not been mortgaged, sold off, or otherwise liquidated. At that point, she turned to the Foundation's assets to both pay her outstanding debts and continue her high-stakes gambling. Between September 2008 and March 2009, O'Connor misappropriated more than $2,088,000 from the foundation. Equally troubling, despite winning hundreds of thousands of dollars during that time period, she literally "threw good money after bad" by continuing gambling - rather than reimbursing the Foundation for the wrongfully taken funds.

As noted in Court, O'Connor's transfers from the Foundation to her personal bank account were contrary to the Foundation's explicit charitable purpose and its non-profit status with the IRS. Her misappropriation of funds deprived the Foundation of its remaining assets and left it completely bankrupt. As a result, the Foundation was forced to close its bank accounts in April 2009. Although O'Connor characterized the misappropriated funds as "loans" from the Foundation (and may have initially intended to repay the funds) her actions were nevertheless specifically prohibited - and constituted impermissible self-dealing in violation of her fiduciary responsibility to the Foundation.

Despite having limited, if any, assets other than the funds improperly taken from the Foundation, O'Connor continued her non-stop gambling. After March 2009, Defendant made payments to casinos in an attempt to satisfy outstanding gambling markers (or lines of credit), yet once again did not make any attempt to repay the Foundation or bring it out of bankruptcy. In doing so (as specified in the Government's charging documents), she improperly engaged in monetary transactions knowing that the transactions involved proceeds of her misappropriation of charitable funds.

According to court records, in 2011, surgeons operated on O'Connor to remove a large tumor from her brain. She subsequently suffered significant complications, including a pulmonary embolism and cognitive impairment. O'Connor's medical condition has resulted in a variety of continuing and serious health problems. While found competent to enter into this deferred prosecution agreement by Magistrate Judge David Bartick, all parties agree that her medical ailments render it highly improbable - if not impossible - that she could be brought to trial. If the defendant satisfies all the conditions of her deferred prosecution (including providing restitution), the government has agreed to dismiss the Information filed against her in two years.

United States Attorney Laura Duffy commented that despite the difficulties presented by this case, it was imperative to ensure that O'Connor, who was mayor from 1986 to 1992, not be allowed to simply pilfer the R.P. Foundation and avoid paying her appropriate tax obligations. "Maureen O'Connor was a selfless public official who contributed much to the well-being of San Diego," Duffy said. “However, no figure, regardless of how much good they've done or how much they've given to charity, can escape criminal liability with impunity."

N. Dawn Mertz, Acting Special Agent in Charge for IRS Criminal Investigation, Los Angeles Field Office commented: "Today, Maureen O'Connor, acknowledged that she embezzled over $2 Million from the R.P. Foundation, a charitable nonprofit organization. This embezzlement contributed to the demise of this organization. O'Connor characterized the misappropriated funds as "loans" from the R. P. Foundation to conceal her illegal activity, gambling addiction and to evade the payment of tax on her embezzled funds. O'Connor's guilty plea emphasizes that those who violate our nation's tax laws, regardless of their status, face investigation by IRS Criminal Investigation, prosecution for their crimes and remain liable for their tax liability."

U.S. Attorney Duffy praised the enforcement work by the IRS who diligently pieced together the full scope of the fraud.asdf

DEFENDANT   Criminal Case No. 13cr537BEN Maureen O'Connor       SUMMARY OF CHARGES

Offense: Title 18, United States Code, Section 1957 - Prohibited Financial Transaction
Maximum penalties: 10 years custody; $250,000 fine; 3 year supervised release.

  INVESTIGATING AGENCY

Internal Revenue Service, Criminal Investigation Division

A contingent of 150 federal, state and local law enforcement officials arrested 28 people and seized 19 firearms early yesterday – including fully-automatic and semi-automatic assault rifles, silencers and high-capacity magazines - in connection with a year-long investigation of major methamphetamine traffickers.

Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge David Bartick at 1:30 p.m. today. Prosecutors will be available for interviews after court.

The arrests – from Spring Valley, La Mesa and Jamul to National City, Chula Vista and San Diego - were based on three grand jury indictments of 33 suspected methamphetamine traffickers unsealed in federal court Tuesday. The charges include conspiracy to distribute controlled substances, distribution of methamphetamine and possession of methamphetamine with intent to distribute. Three defendants were still at large.

During the predawn raids, agents seized about 26 pounds of methamphetamine with an estimated $291,200 street value; a pound of cocaine with estimated $12,800 street value; $151,000 in cash; plus weapons that included an AR-15, a TEC 9, a Glock semi-automatic handgun, bolt action rifles and five silencers. Eight of the guns and the silencers were found at one home on Millar Ranch Road in Jamul. Authorities also discovered indoor marijuana grows with hundreds of plants in two apartment units in Spring Valley.

The investigation, dubbed “Red Menace,” involved federal wiretaps, undercover drug buys and extensive surveillance. Numerous defendants are documented members of gangs, including Skyline, Emerald Hills and Oriental Killer Boys. Rival criminal street gangs often cross gang affiliation for the purpose of facilitating drug distribution.

The arrests are the latest in a series of large-scale multi-agency crackdowns on street gang activity in San Diego County neighborhoods. Including yesterday’s action, more than 180 defendants have been charged in various federal gang prosecutions since January 2012, with more than 80 guilty pleas so far. Most charges are drug- and gun- related; Sentences have ranged from 10 to 21 years in federal prison.

“We are committed to keeping neighborhoods out of the clutches of gang members who deal in drugs and who stash deadly, high-powered automatic weapons in their homes, next door to unwitting neighbors,” said U.S. Attorney Laura Duffy.

U.S. Attorney Duffy praised the coordinated effort of the law enforcement agencies of the East County Regional Gang Task Force under the Organized Crime Drug Enforcement Task Force ("OCDETF") for the coordinated team effort culminating in the charges filed in these cases. The OCDETF program was created to consolidate and utilize all law enforcement resources in this country’s battle against major drug trafficking.

San Diego FBI Special Agent In Charge, Daphne Hearn, commented, “As our communities are faced with increasing threats of crime and violence, the FBI and our partners with the East County Regional Gang Task Force, will work together to confront these threats and make our communities safer.”

San Diego County Sheriff Bill Gore said, "This operation is on-going. It's a team effort that requires careful planning and persistent follow-through. Our aim is straightforward: take back communities for law abiding families and protect them from gang members and drug dealers who threaten their safety."

In the 1990s, San Diego County had the dubious distinction of being called the “Meth Capital” of the country, and East County was the hub of meth-related activity. Until recent years, methamphetamine was typically produced in small to medium quantities in local clandestine laboratories in homes, garages, storage units, apartments, and motel rooms.

Because of a law enforcement crackdown and policies that restrict access to ingredients needed to manufacture meth, San Diego County today has very few meth labs. But now, most of the methamphetamine available for sale here is linked to the sophisticated manufacturing and distribution operations of international drug cartels and local street gangs.

While law enforcement efforts have curtailed local manufacturing, methamphetamine use is still one of the biggest drug-related threats in the district - and the country.

And it’s coming across the border in significant quantities. While there has been a decline in the amount of marijuana and cocaine being smuggled through our district, there has been a significant increase in the amount of methamphetamine.

Border officials seized 427 loads of methamphetamine at San Diego ports of entry in FY 2012 compared to 364 in FY 2011. That’s a 17 percent increase. In Imperial County, the amount of methamphetamine seized jumped by almost 100 percent, from 745 kg to 1,442 kg.

DEFENDANTS           Case Number: 13cr0492-GPC Pedro Millan
Carlos Contreras Sanchez
Laura Millan
Princeton Beon Franks
Eduardo Sanchez
Gilberto Lamas
Adolfo Siordia
Rosita Eunice Corrales - Fugitive
Nicholas Oliveri
William Kilmer
Stephanie Cleveland
James Cheevers
Raymond Lopez
Jasmine Millan
Daniel Erique Millan-Aispuro
Ascarelli Lopez

Summary of Charges

Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Title 21, United States Code, Section 841(a)(1) - Possession of Methamphetamine With Intent To Distribute
Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million
Case Number: 13cr0491-GPC

Christopher Robles
Sarat Sek - Fugitive
Ronald Bonoan
Shannon White
Robert Duren
Joshua Wayne McGuire
Robert McKinney
Alfredo Barias
Robert Young
David Marinelli
Cory Evans
Keith Lusk
Pamela Miranda
Scott Smith

Summary of Charges
Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Title 21, United States Code, Section 841(a)(1) - Possession of Methamphetamine With Intent To Distribute
Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million
Case Number: 13cr0493-GPC
Roberto Carrillo Gonzalez
Cedric Gregory
Marcel Clady
Summary of Charges
Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Title 21, United States Code, Section 841(a)(1) - Possession of Methamphetamine With Intent To
Distribute Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million
AGENCIES
Federal Bureau of Investigation
San Diego County Sheriff’s Department
La Mesa Police Department
San Diego County District Attorney’s Office
San Diego County Probation Department
El Cajon Police Department
San Diego Police Department
Chula Vista Police Department
Bureau of Alcohol, Tobacco, Firearms and Explosives
U.S. Immigration and Customs Enforcement, Homeland Security Investigations
U.S. Customs and Border Protection
U.S. Marshals Service
U.S. Border Patrol
California Highway Patrol
Drug Enforcement Administration’s Narcotics Task Force
Bureau of Prisons
Internal Revenue Service

An indictment or complaint itself is not evidence that the defendants committed the crimes charged.

The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.

United States Attorney Laura E. Duffy announced today that a manager who supervises the Licensing Registration Examiners at the California Department of Motor Vehicles ("DMV") in El Cajon, CA, was charged in a criminal complaint for his involvement in a bribery conspiracy that resulted in the production of fraudulent driver licenses for applicants who had failed - or not taken - the required driver license tests. According to court documents, Jesse Mario Bryan supervised DMV officials responsible for conducting driving tests for driver license applicants, including Jim Lynn Bean and Jeffrey Bednarek who were charged in a criminal indictment in May 2012 in a related case (12CR1852-CAB). Agents with the Federal Bureau of Investigation (FBI) and DMV Investigations Division arrested the defendants earlier today.

The complaint also alleges that Alexander Gonzalez recruited applicants who would pay for fraudulently obtained driver licenses. The complaint further alleges that this entire conspiracy involved the payment of more $100,000 in bribes by applicants to recruiters.

According to the complaint, Frank Tom Attiq, Ali Al Nadawi, Saleh Almuzini, Matthew Allan Elliott, Mohamed Alali, James Lester Shaw and Hassan Hamad Althami are applicants who paid bribes to receive fraudulent driver licenses by paying recruiters who brokered the corrupt deals for fraudulent licenses by getting money from the applicants and paying the bribes to the DMV employees.

The complaint alleges that from December 2010 through April 2012, Bryan supervised employees at both at the El Cajon DMV office, located at 1450 Graves Avenue, El Cajon, California, and the Rancho San Diego DMV office, located at 1901 Jamacha Road, El Cajon, California, who falsely entered both "passing" written and "passing" driving test scores for applicants in exchange for bribes ranging from $75 to $600 per license. In May 2012, 21 defendants (four of whom were DMV officials) were charged in an indictment with conspiracy to commit bribery and to produce unauthorized identification documents (12CR1852-CAB).

The complaint unsealed today alleges that the corruption scheme involved the fraudulent production of both Class C (regular) and Commercial Class A driver licenses. The applicants paid recruiters approximately $400-$500 for each fraudulent Class C license, which the conspirators produced at the El Cajon DMV. The complaint alleges that the DMV employees accepted bribes paid by these applicants despite the obvious public safety risk posed. Applicants seeking Commercial Class A licenses (produced at the Rancho San Diego DMV) typically paid recruiters $2,500-$3,000. Commercial Class A driver licenses allow the licensee to drive commercial vehicles weighing more than 10,000 pounds, which can cause enormous harm to the public if operated incorrectly by an unqualified driver. Increasing the danger to the public, DMV employees entered false passing test scores that allowed applicants to fraudulently obtain additional certifications for the operation of the commercial vehicles, such as transporting hazardous materials or towing multiple trailers.

The defendants arrested in the Southern District of California are expected to make their initial appearances before United States Magistrate Judge David H. Bartick at 1:30 p.m. today. Two defendants arrested in the Central District of California are expected to make their initial appearance there and be transferred to the Southern District of California on a later date.

United States Attorney Duffy noted that this is a joint investigation by the FBI and DMV and if anyone in the community has information about corruption at the DMV, they are asked to contact the San Diego Division of the Federal Bureau of Investigation at 877-NO BRIBE (877-662-7423) or the DMV's Investigations Branch-Office of Internal Affairs at 626-851-0173.

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

DEFENDANTS   Magistrate Case No. 13MJ0475-DHB       Jesse Mario Bryan
Alexander Gonzalez
Frank Tom Attiq
Ali Al Nadawi
Saleh Almuzini
Matthew Allan Elliott
Mohamed Alali
James Lester Shaw
Hassan Hamad Althani SUMMARY OF CHARGES

All Defendants

Title 18, United States Code, Section 371 -- Conspiracy to Commit Bribery and to Produce Unauthorized Identification Documents -- statutory maximum sentence of 5 years in prison, a maximum fine of $250,000, and $100 special assessment.

Defendant: Jesse Mario Bryan

Title 18, United States Code, Section 666(a)(1)(B) -- Bribery -- statutory maximum sentence of 10 years in prison, a maximum fine of $250,000, and $100 special assessment.

Defendant: Alexander Gonzalez

Title 18, United States Code, Section 666(a)(2) – Bribery – statutory maximum of 10 years in prison, a maximum fine of $250,000, and $100 special assessment.

  INVESTIGATING AGENCIES

Federal Bureau of Investigation
Department of Motor Vehicles - Investigations Division

United States Attorney Laura E. Duffy announced that Randy Martell Ballard, also known as “Jazmin Davis,” was sentenced today by United States District Court Judge Roger T. Benitez to serve 150 months in federal prison, followed by 5 years of supervised release, pay a $1,000.00 fine and mandatory registration under the Sex Offender Registration and Notification Act. Ballard pled guilty in November 2012 to sex trafficking of children, in violation of Title 18, United States Code, Section 1591(a) and (b).

According to court documents, Ballard met a fourteen-year-old girl in El Paso, Texas and transported her to San Diego for the purpose of engaging her in prostitution. He purchased a bus ticket for her using a false name. Court documents further show that Ballard posted online prostitution ads on the Internet with a phone number that the minor had in her possession and provided the minor with false identification documents.

This case arises from an investigation by the National City Police Department and the Immigration and Customs Enforcement’s Homeland Security Investigations.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

DEFENDANT   Case Number: 12cr2259BEN Randy Martell Ballard       SUMMARY OF CHARGE

Title 18, United States Code, Sections 1591(a) and (b) - Sex Trafficking of Children

  INVESTIGATING AGENCIES

National City Police Department
Immigration and Customs Enforcement’s Homeland Security Investigations

United States Attorney Laura E. Duffy announced today that Martin Paul Bean, III, pled guilty before United States Magistrate Judge David Bartick to conspiring to import unapproved foreign oncology drugs and sell them to doctors throughout the United States.

As part of his guilty plea, Bean admitted that between 2005 and 2011, he operated a business from his residence in Boca Raton, Florida, that sold over $7 million of prescription oncology drugs (for the treatment of cancer) to doctors throughout the United States. Bean ordered the drugs from various foreign sources, including companies in Pakistan, Indian and Turkey, and directed the drugs to be shipped in bulk directly to Oberlin Medical Supply in San Diego.

In pleading guilty, Bean acknowledged that he did business as GlobalRxStore, and marketed the drugs via an Internet website and through "blast faxes" sent to doctors’' offices. GlobalRxStore operated a call center in Winnipeg, Canada, where orders from doctors in the United States were accepted by telephone, facsimile and electronic mail. Bean admitted that the GlobalRxStore website falsely stated that it was lawful to import the drugs from abroad and that such drugs could be sold and used in the United States. Bean further admitted that he falsely advised doctors that GlobalRxStore's association with Oberlin Medical Supply somehow made his conduct legitimate. The drugs sold by Bean and GlobalRxStore were prescription drugs, including drugs marketed in the United States under the names Gemzar7, Taxotere7, Eloxatin7, Zometa7 and Kytril7. As Bean acknowledged he was aware, such drugs were intended for sale in markets outside the United States, and could not be lawfully imported, marketed or used in the United States.

Bean admitted that over the course of the conspiracy, he received $865,000 in proceeds from the sale of the unapproved foreign oncology drugs. As part of the plea agreement, Bean forfeited a 2004 Jaguar XJ he purchased with proceeds received from the illegal sale of drugs through GlobalRxStore.

Bean further admitted that on June 20, 2011, he caused a package containing Zoldria to be delivered to a doctor in Lawndale, California. Zoldria is manufactured in India and sold in that country, and although its manufacturer represents that it contains the same active ingredient as Zometa7, it is not approved for use in the United States.

Bean’s guilty plea is subject to final acceptance by United States District Court Judge William Q. Hayes. Bean is scheduled to be sentenced on May 6, 2013 at 9:00 a.m. before Judge Hayes.

This case is related to United States v. Maher Idriss, Criminal Case No. 12cr1775-WQH. On March 8, 2012, Maher Idriss pled guilty to conspiring to import merchandise contrary to law. At the time of his plea, Idriss admitted that between May 1, 2006, and May 5, 2011, he operated Oberlin Medical Supply and conspired with the owners and operators of GlobalRxStore to import and distribute unapproved oncology drugs not intended for sale in the United States. Idriss admitted that he and the owners of Global were all aware that it was unlawful to import these drugs. For example, after unapproved drugs to be shipped to Oberlin were seized by federal authorities in transit, Idriss discussed the seizures and the unlawful nature of the importation with Bean and other owner of Global. Idriss is scheduled to be sentenced before Judge Hayes on May 20, 2013 at 9:00 a.m.

The Food, Drug & Cosmetic Act ("FDCA"), is intended to assure, among other things, that all drugs manufactured and distributed within the United States are safely manufactured, made from appropriate ingredients, and properly labeled. Pursuant to the terms of the FDCA, the U.S. Food and Drug Administration (" FDA") regulate the manufacture, processing, labeling, and distribution of all drugs shipped and received in interstate commerce, including the wholesale distribution of prescription drugs. Under the FDCA, anyone manufacturing, preparing, compounding, or processing prescription drugs for sale and use in the United States must annually register with the FDA as a drug establishment, and provide a list to the FDA of the drugs which they manufacture for commercial distribution, and a copy of all labeling. This registration requirement applies equally to drug establishments located outside of the United States that import their drugs into the United States. Under the FDCA, a drug is deemed misbranded if it was manufactured at any domestic or foreign establishment and that drug was not annually listed with the FDA by the establishment as one of the drugs which was manufactured for commercial distribution in the United States at that location.

Under the FDCA, no person may offer for sale in the United States any drug not approved by the FDA. The approval process addresses the chemical composition of the drug, the drug's safety and effectiveness, and elements of the drug's distribution, such as the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of the drug, as well as the labeling to be used for the drug. The approval process is specific to each manufacturer and each product and its labeling. Drugs manufactured outside the United States which are not intended for use in the United States do not go through this approval process and are considered unapproved drugs.

Any prescription drug whose labeling fails to bear the words "Rx only" is deemed to be misbranded. Moreover, all wording required by the FDCA to appear on drug labels and labeling sold in the continental U.S. must be in the English language. It is unlawful for anyone other than the manufacturer of a drug manufactured in the United States and exported to import that same drug back into the United States.

Criminal Case No. 12cr3734-WQH DEFENDANT     Martin Paul Bean, III       SUMMARY OF CHARGE

Conspiracy, in violation of Title 18, United States Code, Section 371
Maximum Penalties: 5 years in custody, $250,000 fine, restitution and forfeiture.

  Criminal Case No. 12cr1775-WQH DEFENDANT Maher Idriss   SUMMARY OF CHARGE Importation Contrary of Law, in violation of Title 18, United States Code, Section 545
Maximum Penalty: 20 years in custody and/or $250,000 fine   INVESTIGATING AGENCIES

Food and Drug Administration, Office of Criminal Investigations
Immigration and Customs Enforcement’s Homeland Security Investigations
Federal Bureau of Investigation
Postal Inspection Service

United States Attorney Laura E. Duffy announced that Donald E. Lopez was sentenced today in federal court in San Diego to serve 57 months in custody for tax evasion stemming from his willful failure to pay income taxes the more than $3.94 million in funds he received from convicted Ponzi-scheme operator Matthew La Madrid. U.S. District Judge Larry Alan Burns ordered Lopez immediately into custody, and directed him to pay $1,345,693.26 in restitution to the Internal Revenue Service for his crimes. Lopez had previously pled guilty to a one-count felony information charging him with willfully evaded income taxes on this $3.94 million in revenue, his concealment of his use of the money, and his false representations in court proceedings in San Diego in order to conceal the fact that he had received and spent the money for his own use and benefit.

As outlined in Lopez’s plea agreement and other court records, the funds Lopez concealed were part of a $10 million transfer La Madrid had made to Lopez’s company in November 2007, as part of La Madrid’s fraudulent investment, real estate, and mortgage fraud schemes. The money was identified in other proceedings as investor funds from La Madrid’s and related fraud schemes. La Madrid has already been sentenced to serve ten years in prison for orchestrating these schemes, which included sending these funds to Lopez without his client’s knowledge or consent.

In connection with his plea to tax evasion, Lopez admitted that, after taking these funds, he did not file tax returns for 2007 and 2008, and knowingly and willfully failed to report the funds as income for those years. As a result, the IRS lost more than $1.3 million in tax revenue.

Previously, on November 13, 2009, Lopez had pled guilty to a federal obstruction of justice charge based on his false representations in a civil case filed in the United States District Court for the Southern District of California, seeking to recover La Madrid investor funds. Lopez admitted in that proceeding that he sought to conceal from the Court and the IRS the true location, condition, and disposition of the $10 million wired by La Madrid to Lopez’s company in November 2007. Lopez had served a 15 month sentence on the obstruction of justice conviction before being charged last year with tax evasion.

DEFENDANT   Case Number: 12CR4033-LAB Donald E. Lopez       SUMMARY OF CHARGE

Income Tax Evasion, in violation of Title 26, United States Code, Section 7201

  INVESTIGATING AGENCY

Internal Revenue Service - Criminal Investigation

United States Attorney Laura E. Duffy announced today that San Diego-based Unico, Inc. (“Unico”) entered into a negotiated settlement in which it admitted that its former CEO, Mark Anthony Lopez, made a false statement to the Securities and Exchange Commission (“SEC”) when he mischaracterized funds received from a lender. Unico also agreed to pay a monetary penalty and to submit to at least three years of oversight by a corporate monitor approved by the United States Attorney’s Office.

As part of the negotiated settlement, Unico (on January 30, 2013) entered into a deferred prosecution agreement with the United States Attorney’s Office before the Honorable William McCurine, Jr. According to the terms of the agreement, the monitor (who is required to act as an independent thirdparty) will have the power to approve—as well as veto—various business and financial decisions that Unico attempts to make. In exchange for Unico’s concessions, the United States Attorney’s Office agreed to postpone its prosecution against Unico for charges related to securities fraud, false statements and obstruction of justice.

The deferred prosecution agreement comes after the January 17, 2013 arrest of Unico’s former CEO on charges of conspiracy to commit securities fraud and obstruction of justice. According to the indictment against Lopez, he conspired with New Jersey-based stock trader Mark Allen Lefkowitz (who previously pled guilty) to manipulate the share price and volume of Unico’s stock to benefit corporate insiders at the expense of shareholders. As a result of the fraud, the company issued approximately 9 billion new shares of its stock that it did not register with the SEC. These new, unregistered shares diluted existing shares, causing their value to drop by as much as $7 million. At the same time, Lefkowitz received free-trading shares from Unico worth more than $28 million, which he sold to unsuspecting buyers on the open market.

Also according to the indictment against Lopez, he tried to obstruct an SEC probe into his misconduct by refusing to turn over emails, which he printed and concealed in two manila folders marked “Files Deleted” and another marked “Not Released to SEC Subpoena (Delete).” The indictment further alleged that Lopez redacted portions of an email and tried to delete it from his computer, and later lied to the SEC under oath during deposition testimony.

According to United States Attorney Duffy, the Deferred Prosecution Agreement was an appropriate vehicle in this case as it did not further penalize Unico’s stockholders for criminal behavior undertaken by Lefkowitz and a former company executive. She added, though, that this remedy was available only because of the company’s cooperation in this investigation. The United States Attorney also stressed that the designation of a corporate monitor was another integral component of this agreement as it guards against Unico being involved in future stock fraud.

DEFENDANT Case Number: 13CR0355-JAH   Unico, Inc.       SUMMARY OF CHARGES

False Statement to a Government Agency, in violation of Title 18, United States Code, Section 1001(a)(2). Maximum penalties: 5 years in prison, 5years' supervised release, a $500,000 fine and a $400 special assessment.

  INVESTIGATING AGENCY

Federal Bureau of Investigation

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

United States Attorney Laura E. Duffy announced that a California medical doctor and the owner of the Oceanside Medical Supply in Long Beach, CA have both pled guilty to participating in a conspiracy to defraud the Medicare trust fund by submitting more than $1 million in fraudulent power wheelchair claims. Dr. Irving Schwartz and Jose Melendez entered their guilty pleas before Magistrate Judge Nita L. Stormes in federal court in San Diego, and pursuant to their plea agreements, the defendants are obligated to pay restitution to the Medicare trust fund for the losses caused by their scheme.

According to court papers and admissions by the defendants, the fraudulent conspiracy focused on the sale of bogus prescriptions, with the ultimate goal being to obtain reimbursements from Medicare for expensive power wheelchairs that patients did not need and, in some cases, did not want. Dr. Irving Schwartz admitted today during his guilty plea that in 2007-2008, he would travel to El Centro, California, in search of elderly Medicare patients. Dr. Schwartz would write prescriptions for power wheelchairs, even though the patients did not need the equipment and could walk without assistance. In exchange, Schwartz collected a $300 cash kickback for each fraudulent power wheelchair prescription. One of Schwartz’s co-conspirators would then sell the power wheelchair prescriptions to Melendez, a medical supply company owner, charging him $1,000 per fraudulent prescription.

According to court papers and admissions at today’s hearing, Melendez sold some of the power wheelchair prescriptions to other co-conspirators, charging them an additional mark-up on each fraudulent prescription. As the last step in the scheme, Melendez and other co-conspirators would submit the fraudulent prescriptions to Medicare for reimbursement, billing the government thousands more per wheelchair than it had cost them to purchase and deliver the equipment. Often the unneeded equipment would sit unused in patients’ homes for years.

Dr. Schwartz admitted today in open court that he wrote at least 186 fraudulent power wheelchair prescriptions for Medicare beneficiaries in exchange for more than $55,000 in bribes and kickbacks. Melendez, the owner and operator of Oceanside Medical Services, admitted that he purchased these 186 fraudulent prescriptions and used them to submit over $830,000 in false claims to Medicare.

In a related case, co-conspirators Aristeo and Laura Tavares have pled guilty and admitted to submitting more than $250,000 in false claims based on Dr. Schwartz’s fraudulent prescriptions. In total, the scheme resulted in more than $1 million in false claims to the Medicare trust fund.

United States Attorney Duffy said, “Combating health care fraud is a top priority of the Department of Justice. When Medicare dollars are wasted on expensive and unnecessary equipment, senior citizens run the risk of not being able to obtain the legitimate medical treatment they need. In this time of fiscal austerity, we must aggressively prosecute those who pilfer Medicare dollars to line their own pockets.”

“Health care fraud schemes involving false claims of durable medical equipment, cost U.S. taxpayers billions of dollars each year,” said Daphne Hearn, Special Agent in Charge of the San Diego FBI Office. “This prosecution should serve notice, that the FBI will aggressively pursue those individuals and criminal enterprises who would line their own pockets at the expense of U.S. taxpayers.”

“There can be no doubt that the federal government will crack down on physicians and other individuals defrauding the Medicare program," said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s Los Angeles region. “When business owners conspire with doctors to pay kickbacks and write phony prescriptions, they both should expect to be brought to justice."

The pleas are subject to final acceptance by United States District Judge Marilyn L. Huff. The defendants are scheduled to be sentenced by Judge Huff on May 6, 2013 at 9:00 a.m.

DEFENDANTS CRIMINAL CASE NO. 12cr2599-H   Irving J. Schwartz
Jose Melendez       SUMMARY OF CHARGES

Count 1: Conspiracy to Pay and Receive Health Care Kickbacks and Defraud -Title 18, United States Code, Section 371; Maximum Penalties: Five years in custody; $250,000 fine; 3 year of supervised release; and mandatory restitution

  INVESTIGATING AGENCY

Federal Bureau of Investigation
Department of Health and Human Services, Office of Inspector General

United States Attorney Laura E. Duffy announced that Ildiko Pinero, an owner and the Chief Financial Officer of Alpha Machining Products & Development Inc. (“Alpha”), pled guilty today before United States Magistrate Judge Nita L. Stormes to failing to pay over to the United States payroll taxes that she withheld from the paychecks of Alpha employees. At the time of the offense, Alpha was a San Diego defense contractor engaged in the machining of weapons parts and other products for the U.S. Department of Defense.

As an employer, Alpha was required to withhold employment taxes from the wages it paid to its workers, including federal income taxes and the employees’ share of Federal Insurance Contributions Act taxes (Social Security and Medicare taxes). These withheld employment taxes are commonly referred to as “trust fund taxes,” because an employer holds these funds in trust for its employees. After collecting these trust fund taxed, Alpha was required to pay them over to the Internal Revenue Service (“IRS”). In addition, Alpha was required to account for and pay over its own “employer’s share” of the Social Security and Medicare taxes resulting from employing these workers.

As Pinero admitted during her guilty plea this morning, from January 2006 through September 2008, she withheld payroll taxes from the paychecks of Alpha’s employees. These taxes included over $110,000 in withholdings for federal income tax, plus the employees’ share of Medicare and Social Security taxes. Despite withholding these sums from the employees’ paychecks, Pinero refused to pay the taxes to the Internal Revenue Service. Similarly, Pinero also failed to pay over Alpha’s share of Social Security and Medicare taxes, in the amount of approximately $57,000.

United States Attorney Duffy emphasized that, “When an employer withholds federal taxes from the paychecks of its hard-working employees, that money isn’t the employer’s to spend. Failing to pass along those withheld funds to the IRS amounts to stealing. This applies to defense contractors like Alpha, just like any other employer.” U.S. Attorney Duffy praised the efforts of agents from the IRS Criminal Investigation, the Defense Criminal Investigative Service, Immigration and Customs Enforcement, and Army Criminal Investigation Division for their collaborative work in this multi-agency investigation.

“Corporate executives have a continuing responsibility to collect and turn over all IRS payroll taxes,” said N. Dawn Mertz, IRS Criminal Investigation (CI) Acting Special Agent in Charge for the Los Angeles Field Office. “The failure to pay over withheld payroll taxes is a very serious offense. IRS CI intends to vigorously pursue those who fraudulently collect payroll taxes and fail to timely remit those taxes.”

The guilty plea is subject to final acceptance by United States District Judge Dana M. Sabraw. Sentencing in this case is currently scheduled for April 19, 2013, at 9:00 a.m., before Judge Sabraw.

DEFENDANT Case Number: 12cr3125DMS   Ildiko Pinero       SUMMARY OF CHARGES

Count 2: Willful failure to pay over tax, in violation of Title 26, United States Code, Section 7202 - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.

  INVESTIGATING AGENCY

Internal Revenue Service - Criminal Investigation
Defense Criminal Investigative Service
Immigration and Customs Enforcement’s Homeland Security Investigations
Army Criminal Investigation Division

United States Attorney Laura E. Duffy announced that three civilian contractors who worked at Camp Pendleton were arraigned today on an indictment charging them with stealing millions of dollars’ worth of medical equipment that was to have been shipped to combat commands throughout the world. Defendants Henry Bonilla, Richard Navarro and Michael Tuisee made their first court appearance today before Magistrate Judge William McCurine, Jr. The three were arraigned on a six-count indictment charging the Department of Defense contractors with Conspiracy, Theft of Government Property and Criminal Forfeiture.

According to the indictment, the three defendants worked in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard Camp Pendleton (the United States Marine Corps’ largest West Coast expeditionary force training facility). 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces. By virtue of their employment as defense contractors, the defendants had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses. Throughout 2012, the defendants repeatedly stole expensive medical equipment from 1st MEDLOG, transported it using their personal vehicles to other locations in Southern California, and sold the stolen items to medical equipment resellers. According to the indictment, exchanges with resellers often took place at night, in parking lots near commercial businesses. All told, the defendants are alleged to have stolen over $3 million worth of medical equipment needed by United States Marines.

At today’s hearing, Magistrate Judge McCurine set bond for the defendants, and ordered them to appear before District Judge Cathy A. Bencivengo on March 8, 2013. Each defendant faces a maximum penalty of 10 years in prison – as well as mandatory restitution to the U.S. military – if convicted of stealing government property.

United States Attorney Duffy advised that these charges are the result of an ongoing investigation into theft of valuable property aboard Camp Pendleton, and asked the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil if they have any information relevant to that investigation.

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

DEFENDANT Case Number: 13cr0338-CAB   Henry Bonilla
Richard Navarro
Michael Tuisee       SUMMARY OF CHARGES

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

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

Count 2: Theft of Government Property, Title 18, United States Code, Section 641 (Navarro)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

Count 3: Theft of Government Property, Title 18, United States Code, Section 641 (Tuisee)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

Count 4: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

Count 5: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

Count 6: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.

  INVESTIGATING AGENCY

Naval Criminal Investigative Service

SAN DIEGO - A man who created two medical marijuana dispensaries and a phony board of directors as a front for a multimillion-dollar drug trafficking operation was sentenced today to serve 100 months in federal prison. The defendant was immediately remanded into custody.

Joshua John Hester of San Diego pleaded guilty January 3, 2012, to eight felony charges, including conspiracy to distribute over 1,000 kilograms of marijuana, conspiracy to maintain drug-related premises, conspiracy to launder money, and criminal forfeiture. He was sentenced by United States District Judge Irma E. Gonzalez.

According to his plea agreement, Hester admitted that he was the silent owner of two marijuana dispensaries known as the “Downtown Kush Lounge” in downtown San Diego and the “Green Kross Collective” in Mission Beach, where he made millions of dollars in the retail sale of marijuana.

This is the most significant prosecution of a large-scale dispensary operator in the Southern District of California. And, this was the first time federal authorities used wiretaps in an investigation of medical marijuana dispensaries.

“Joshua Hester is the poster boy for the types of marijuana dispensary operations that the federal government is criminally targeting,” said U.S. Attorney Laura Duffy. “He wasn’t overseeing a non-profit collective that served sick people. He was a convicted drug trafficker making millions of dollars selling high-quality marijuana to recreational users and exploiting state laws that were meant to help the seriously ill.”

“The role of IRS Criminal Investigation (CI) in the investigation of Joshua Hester was to follow the money laundered as part of the conspiracy to distribute illegal marijuana,” said N. Dawn Mertz Acting Special Agent in Charge of IRS CI's Los Angeles Field Office. “IRS CI will continue to collaborate with our law enforcement partners to trace the proceeds in this highly lucrative industry and enforce our nation’s federal tax and money laundering laws.”

“This case illustrates the kind of criminal activity going on within medical marijuana dispensary operations,” said San Diego Drug Enforcement Administration Acting Special Agent in Charge William R. Sherman. “The proprietors of these operations are simply drug dealers who are hiding behind the guise of compassionate care, when in fact their only motivation is making money. We will continue to investigate these criminal enterprises that are not only violating the Federal Controlled Substances Act, but are also involved in a variety of other criminal activities.”

Since October 2011, the United States Attorney’s Office in coordination with the DEA, has issued cease and desist letters to approximately 253 marijuana dispensaries operating in the district. There has been a 95% self-closure rate in response to the letters, with less than 12 dispensaries remaining open.

In his plea agreement, Hester admitted to two types of trafficking in this case. First, he went the traditional route, using a supplier, distributing over 1,000 kilograms of high-quality marijuana known as “Canadian BC Bud,” and laundering millions of dollars of profits. When his supplier was arrested, Hester opened dispensaries and started selling and manufacturing his own marijuana and purchased bulk quantity from others.

Hester admitted that he set up a “sham” Board of Directors at the Green Kross Collective and Downtown Kush Lounge, which had no authority or control over the management of the cooperatives. Hester also admitted that he laundered over $2 million in connection with the purchase of a residence in Rancho Santa Fe, California, where he manufactured marijuana at that location. Hester also admitted selling the supposedly non-profit Green Kross Collective for $250,000 in cash.

Hester acknowledged that he was the true owner of the 37-acre Palomar Mountain Property, but placed the property in another name to conceal his ownership. And, he acknowledged that he intended to grow marijuana at that location. As part of his plea agreement, Hester agreed to forfeit over $575,000 in assets, including cash, vehicles, and jewelry.

An investigation of Hester by federal drug agents began in spring of 2008 in connection with marijuana trafficking in San Diego County that was unrelated to dispensaries. It was a chance encounter with police in Glendale, California, on December 8, 2008, that propelled Hester into the dispensary business.

Glendale police had been following a suspected small-time marijuana dealer to a storage locker in Calabasas, California. “The local officers were extremely surprised to find $843,000 in cash inside the locker as they accidentally stumbled into a multi-million dollar international drug operation,” according to Hester’s sentencing memorandum.

Hester came on the radar when he and his key marijuana supplier, Rajeev Kaushal, arrived at the locker to pick up the cash. Hester was detained but not charged. But Kaushal was taken into custody in Los Angeles and ultimately pleaded guilty in Los Angeles. Court documents said that in the two years leading up to Kaushal’s arrest in December 2008, Hester had purchased over 3,000 pounds of high-grade Canadian marijuana from Kaushal for almost $9 million, and distributed it throughout San Diego County.

With his key supplier in custody in December 2008, Hester “turned to medical marijuana dispensaries” in the spring of 2009, according to the sentencing memorandum.

In February of 2010, the investigation shifted to the dispensary operations and agents from the Internal Revenue Service and the DEA’s Narcotics Task Force obtained federal wiretaps, intercepting text messages for a 30-day period, then expanding for another 30 days to both text messages and phone conversations.

According to the Government’s sentencing memorandum, “These wiretaps demonstrated that defendant Joshua Hester, who was making millions of dollars in connection with these ‘medical marijuana dispensaries,’ was using these ‘dispensaries’ as retail marijuana outlets and distribution centers. He had assembled management teams and had a Board of Directors, who worked under his direction.” Hester has admitted the board was a sham, and directors had no power.

The wiretap revealed that the Green Kross Collective and the Downtown Kush Lounge were making between $5,000 -7,000 each day at each location on the average, the sentencing memorandum said. Assuming that together, both locations generated at least $10,000 each day, Hester was grossing approximately $3.5 million dollars annually. The California sales tax records for the collectives show far less reported income.

According to court documents, the products seized by federal agents included: Many plastic bottles of THC-laden soft drinks labeled “7 High,” “Dr. Feelgood,” “Laughing Lemonade,” “Rasta Berry Iced Tea,” “Danktopia,” “Orange Cush,” “Root Buzz,” and “Marijuana Dank.” There were cookies and brownies labeled “White Chip Hash Brownie,” “Reese’s Crumbled Hash Brownie,” “Cannabis Creation Brownie,” “Reefers Peanut Butter Cup,” “M&M Hash Brownies,” Reefers Peanut Butter Cup with Nuts,” “Cannabis Creation Sugar Free Cookies,” and “Cannabis Creation Cookies.” Agents also seized marijuana candy, including “Jolly Stones THC Medicated Hard Candies,” and “Stone Candy,” and different flavored lollipops, including strawberry, watermelon, bubble gum, cotton candy, orange, lemon, pina colada, and grape. The officers also seized “Bud Head Bubblegum.”

The office computer showed that Green Kross Collective had approximately 1,732 members - most of the members were between the ages of 18-22, court records said. The computerized records also showed that the Downtown Kush Lounge had 811 members. Judge Gonzalez ordered restitution in an amount to be determined at a later date.

Likewise, in a related development, the Court on January 14, 2013, ordered Hester’s realtor on the Rancho Santa Fe and Palomar Mountain properties, Marco Luis, to pay restitution in the amounts of $329,767 to CitiGroup and $615,935 to JP Morgan. Luis pleaded guilty in August to money laundering charges in connection with those properties and was sentenced to 48 months in prison.

DEFENDANT Criminal Case No. 10CR2967-IEG   Joshua John Hester       SUMMARY OF CHARGES

Title 21, United States Code, Sections 846 and 841(a)(1)[count 1] - Conspiracy to distribute over 1,000 kilograms of marijuana

Title 21, United States Code, Sections 856(a)(1) and 846 [counts 6, 7 and 8] - Conspiracy to maintain drug related premises Title 18, United States Code, Sections 1956(a)(1)(A)(I) and 1956(h) [count 15] - Conspiracy to launder money

Title 18, United States Code, Sections 1957 and 1956(h) [count 16] - Conspiracy to launder money

Title 18, United States Code, Sections 1957 and 1956(h) [count 25] - Conspiracy to launder money

Title 18, United States Code, Sections 1956(a)(1)(B)(I) and 1956(h) [count 33] - Conspiracy to launder money

  INVESTIGATING AGENCIES

This investigation was conducted by the Internal Revenue Service, Criminal Investigation, San Diego, and the San Diego Drug Enforcement Administration’s Narcotics Task Force. The lead prosecutor is Sherri Walker Hobson.

United States Attorney Laura E. Duffy announced that Lawson Hardrick, a retired United States Customs and Border Protection Officer was found guilty by a federal jury earlier today in San Diego of two counts of receipt of images of minors engaged in sexually explicit conduct, each a felony. The verdicts follow a one-day trial before United States District Judge Marilyn L. Huff.

According to the evidence presented at trial, agents with Immigration and Customs Enforcement’s Homeland Security Investigations conducted an investigation of persons using peer to peer file-sharing programs to make child pornography available to others. According to the forensic evidence introduced at trial, the defendant received videos of children as young as four and nine years old through a file-sharing program in 2008 through 2010. The indictment was handed up by a federal grand jury sitting in San Diego in July 2012.

The defendant is next scheduled to be in court on April 29, 2013 at 9:00 a.m., before Judge Huff for a sentencing hearing.

DEFENDANT Case Number: 12cr3061-H   Lawson Hardrick       SUMMARY OF CHARGES

Counts: 2
Receipt of Images of Minors Engaged in Sexually Explicit Conduct- Title 18, United States Code, Section 2252(a) (2)
Maximum Penalties: 20 years’ incarceration with a five year mandatory minimum sentence, $250,000 fine, a minimum of 5 years and up to a lifetime of supervised release and registration as a sex offender.

  INVESTIGATING AGENCY

Immigration and Customs Enforcement’s Homeland Security Investigations

SAN DIEGO - A prominent La Jolla oncologist and his corporate medical practice have pleaded guilty in connection with a scheme to import unapproved foreign cancer drugs at a deep discount, dispense them to unwitting patients, bill Medicare as if the drugs were legitimate, and pocket the profits.

In a hearing before U.S. Magistrate Judge Bernard Skomal on January 15, Dr. Joel I. Bernstein entered a guilty plea to a single count of introducing an unapproved drug into interstate commerce – in this case, a cancer drug called “Mabthera” intended for market in Turkey - and administering it to patients. The approved U.S. drug with the same active ingredient is Rituxan, which is used to treat lymphomas and leukemias such as non-Hodgkin lymphoma and chronic lymphocytic leukemia. Bernstein was released pending sentencing, which is scheduled for April 16 at 1:30 p.m. before Judge Skomal.

In addition, his medical practice, Dr. Joel I. Bernstein, M.D., Inc., also pleaded guilty at a hearing today before U.S. District Judge Cathy Ann Bencivengo to one count of Health Care fraud. According to the plea agreement with the corporation, employees of Dr. Joel I. Bernstein, M.D., Inc. purchased $3.4 million of foreign cancer drugs, knowing they had not been approved by the U.S. Food and Drug Administration for use in the United States. From 2007 to 2011, Bernstein’s office purchased these drugs for significantly less than market value in the U.S., and then submitted claims to Medicare at the full reimbursement price. To conceal the scheme, the office fraudulently used Medicare reimbursement codes for approved cancer drugs, as Medicare does not pay for unapproved drugs.

The plea agreement for the corporation also calls for $1.7 million in restitution to Medicare, plus forfeiture of $1.2 million in profits. The corporate medical practice is scheduled to be sentenced on May 17, 2013, before Unites States District Judge Cathy Ann Bencivengo.

In addition, the government has also filed a False Claims Act lawsuit in District Court against Dr. Bernstein and his medical corporation for submitting false claims to the Medicare Program for these unapproved drugs. According to this civil complaint, the Medicare Program was defrauded of over $1.7 million, and under the False Claims Act, the United States can recover triple the amount of damages plus monetary penalties.

The cases involving Dr. Bernstein and his practice are the latest example of an alarming nationwide trend that potentially puts patients at risk by exposing them to foreign drugs – particularly injectable chemotherapy drugs - that are not vetted by the FDA. Agency officials have described the trend as an “epidemic of unapproved and counterfeit drugs.”

The FDA’s Office of Criminal Investigations (OCI) currently has over 200 investigations nationwide involving schemes in which medical practices purchase foreign, unapproved drugs and dispense them to unsuspecting patients for personal financial gain.

This practice is particularly disturbing because, unlike traditional prescription drugs which are dispensed to the patient by a pharmacy, oncology drugs are typically infused into a patient without the patient ever seeing the box it came in, or any of the related labeling.

“This isn’t just about the greed of one doctor, but about the welfare of many patients,” said U.S. Attorney Laura Duffy. “In a worst-case scenario, chemotherapy drugs that have not been approved by the FDA may be fake, ineffective, unsafe and dangerous. This is what motivates the Department of Justice and the FDA to be more aggressive in stopping those who would corrupt the integrity of the pharmaceutical supply chain with no regard for the well-being of patients.”

John Roth, director of the FDA’s Office of Criminal Investigations, the lead agency on the case, said, "When medical professionals decide that patient safety is less important than finding a great deal on pharmaceutical products from foreign countries and unknown suppliers our nation’s pharmaceutical supply chain is at risk and patients are vulnerable. FDA’s Office of Criminal Investigations will continue to investigate these cases and work closely with our regulatory counterparts in FDA and our law enforcement partners who share the same commitment to address this problem. We hope this message is heard loud and clear within the medical community-you will face criminal prosecution if you engage in this type of illegal activity."

Daphne Hearn, Special Agent in Charge of the San Diego FBI, said, “Health care fraud costs the country billions of dollars each year and undermines the security of the Medicare program. The FBI will continue to work with our law enforcement partners and prosecutors to ensure the safety of the public and ensure the Medicare program will be there for those who need it most.”

Derek Benner, Special Agent in Charge of Immigration and Customs Enforcement’s Homeland Security Investigations, said, “As part of this case, HSI agents and our law enforcement partners uncovered an intricate network involved in the illicit distribution and importation of unapproved drugs that were sold to doctors in the U.S. It’s disturbing to see licensed, trusted medical professionals who are willing to put their own financial gain over public health and safety. We owe it to consumers to aggressively pursue pharmaceutical fraud given the significant risk to public health.”

According to the corporation’s plea agreement, Bernstein’s employees knowingly purchased foreign drugs containing the same active ingredient as drugs sold in the United States as Abraxane, Alimta, Aloxi, Boniva, Eloxatin, Gemzar, Neulasta, Rituxan, Taxotere, Venofer and Zometa, but were intended for use in markets outside the United States and had not been approved for sale in the United States.

The medical practice, in pleading guilty, admitted that it was aware that the drugs were not approved by the FDA in part because the practice had received a Notice from the FDA in October, 2008, that a shipment of drugs had been detained because the drugs were not approved for use in the United States by the FDA. Despite this warning, Bernstein’s medical practice continued to purchase unapproved cancer drugs and inject them into patients.

The FDA regulates the introduction of pharmaceuticals into commerce. This regulation helps ensure that drugs are safely manufactured, made from appropriate ingredients and properly labeled. The approval process addresses the chemical composition of the drug, the drug’s safety and effectiveness, and the elements of the drug’s distribution, such as the methods used in the manufacture, processing and packing of the drug, as well as the labeling to be used for the drug.

Only drugs that comply with vigorous U.S. standards should be given to patients in this country. Drugs manufactured outside the United States which are not intended for use in the United States do not go through this approval process and are considered unapproved, and therefore potentially unsafe.

In the Bernstein case, investigators found no evidence the illegal drugs involved were counterfeit. The unapproved foreign medications that were seized during the investigation were tested and found to contain the appropriate level of active ingredients. Although it’s difficult to determine whether a decline in a patient’s health should be attributed to unapproved drugs or to cancer, the investigation uncovered no evidence to indicate that Bernstein’s patients were harmed by the foreign drugs he administered.

There have been numerous similar cases of illegal importation and distribution of foreign unapproved drugs in San Diego and around the United States in recent years.

In cases related to Bernstein, a Florida-based cancer-drug supplier, Martin Paul Bean III, was indicted by a federal grand jury in San Diego in September 2012 for allegedly selling more than $7 million of misbranded and unapproved prescription oncology drugs to U.S. doctors. Please see 12-cr-03734-WQH USA.

The indictment alleged that from 2005 to 2011, Bean, doing business as GlobalRxStore, ordered the misbranded and unapproved drugs from foreign countries, including Turkey, India and Pakistan, and sold them to the doctors throughout the U.S. at substantially discounted prices via a wholesale pharmacy in San Diego.

That pharmacy - Oberlin Medical Supply and Service Corp. - was owned and operated by Maher Idriss, who pleaded guilty March 8, 2012, to conspiring with Bean to supply the unapproved drugs. Idriss acknowledged that U.S. doctors paid him over $7 million for foreign-sourced unapproved oncology drugs from May 2006 to May 2011. Idriss faces up to five years in prison and restitution and has already forfeited approximately $54,000 of profits. He is scheduled for sentencing May 20, 2013. Please see 12- cr-01775-WQH.

According to the plea agreement for the Bernstein medical practice, employees ordered drugs from Oberlin, among other suppliers.

Idriss admitted that after receiving payments from the doctors, he transferred the funds to the foreign suppliers and to the GlobalRXStore owner's bank account in Canada, keeping a portion for himself.

In another related case with a San Diego connection, James Newcomb of La Jolla was sentenced in August 2012 to 24 months in prison for conspiring to distribute adulterated prescription drugs to physicians in the United States.

Newcomb admitted that he distributed unapproved prescription drugs from foreign countries to physicians located in the United States, with the assistance of persons in Canada and the United Kingdom. Please see 12-cr-00009-RWS-1. Newcomb and others marketed these illegal drugs to U.S. doctors by offering them at up to 60% off the average wholesale price of the legitimate drugs in the United States.

According to the plea agreement of Bernstein’s medical practice, employees of his office purchased unapproved oncology drugs from Newcomb’s businesses, which included Medication Brokers, Pricing Logix, Richard’s Services, Ban Dune Marketing and Warwick Healthcare Solutions. Newcomb based his operations in offices in La Jolla. La Jolla resident Sandra Behe and Dr. Abid Nisar of St. Louis, Missouri, were also convicted in the same investigation.

Elsewhere in the country, doctors, office staff and drug suppliers in Maryland, Missouri, Tennessee and California were indicted in similar schemes in 2011 and 2012. They were accused of importing misbranded cancer drugs at significantly cheaper prices, providing them to patients without disclosing the source of the drugs, and then submitting claims for reimbursement from healthcare programs.

It was the FDA’s discovery of two counterfeit drugs - Avastin, the approved blockbuster cancer drug for treatment of colorectal, lung, kidney and brain cancer, and Altuzan, the unapproved Turkish version of Avastin - that brought national media attention to the problem. The Altuzan was found to contain no active ingredient at all, and thus would provide no benefit whatsoever to patients.

The FDA, recognizing the seriousness of this illegal activity and the discovery of the counterfeit Avastin and Altuzan, took the unprecedented regulatory action of issuing letters to numerous medical practices and physicians around the country, including many that purchased unapproved cancer drugs. To date over 500 letters have been issued.

Dr. Bernstein was among those who received a letter from the FDA prior to being charged with federal crimes.

The letter to Bernstein said, in part: “Purchasing prescription drug products, such as injectable cancer medications, from foreign or unlicensed suppliers puts patients at risk of exposure to drugs that may be fake, contaminated, improperly stored and transported, ineffective, and dangerous. In virtually all cases, purchasing unapproved prescription drugs from foreign sources violates the Federal Food, Drug, and Cosmetic Act and is illegal.”

The letter warned of the risks of purchasing medications from foreign, unfamiliar or unlicensed suppliers and selling unapproved versions of injectable cancer medications, noting that “patients were unknowingly placed at risk when they received medications of uncertain purity, storage, handling, identity and sourcing.”

The letter also noted that importing these medications from foreign sources is a violation of the Federal Food, Drug and Cosmetic Act.

“In an effort to protect the health of patients, health care providers should use only FDA-approved versions of these cancer medications,” the letter said. “Health care providers should be aware that purchasing medications from direct-to-clinic promotions that are from non-verified sources might increase the risk of receiving a potentially unsafe and ineffective product, since the products offered for sale may be unapproved, not manufactured with the quality attributes of FDA-approved products, or counterfeit.”

DEFENDANT Criminal Case No. 13cr0120-BGS   Joel I. Bernstein       SUMMARY OF CHARGES

Title 21, United States Code, Section 331(d), 333(a) (1) and 355(a), a misdemeanor – Introducing or causing to be introduced into interstate commerce an unapproved new drug

  MAXIMUM PENALTIES

One year in prison; $100,000 fine, one year supervised release; restitution.

DEFENDANT Criminal Case No. 13cr0119-CAB   Dr. Joel I. Bernstein, M.D., Inc.       SUMMARY OF CHARGES

Title 18, United States Code, Section 1347 – Medicare Fraud

  MAXIMUM PENALTIES

Five years’ supervised release; $500,000 fine; mandatory restitution.

INVESTIGATING AGENCIES

The U.S. Food and Drug Administration’s Office of Criminal Investigations was the lead investigative agency in this case. Other agencies involved were the Federal Bureau of Investigation and Immigration and Customs Enforcement’s Homeland Security Investigations. The lead prosecutor is Melanie Pierson.

United States Attorney Laura E. Duffy announced today the unsealing of an indictment charging Mark Anthony Lopez – the former President and CEO of Unico, Inc. (“Unico”) – with one count of conspiracy to commit securities fraud and two counts of obstructing justice. Unico is a San Diego-based mining company whose stock is publically traded. Lopez was arrested on January 17, 2013, by Special Agents of the FBI.

According to the indictment, Lopez conspired with New Jersey-based stock trader Mark Allen Lefkowitz (who previously pled guilty) to manipulate the share price and volume of Unico’s stock to benefit corporate insiders at the expense of shareholders. As a result of the fraud, the company issued approximately 9 billion new shares of its stock that it did not register with the Securities and Exchange Commission ("SEC"). These new, unregistered shares diluted existing shares, causing their value to drop by as much as $7 million. At the same time, Lefkowitz received free-trading shares from Unico worth more than $28 million, which he sold to unsuspecting buyers on the open market.

To carry out the fraud, Lopez and Lefkowitz exploited Section 3(a)(10) of the Securities Act of 1933 C a little-known provision that allows companies to issue unregistered shares of stock to settle "bona fide" debts. Lopez, on behalf of Unico, would enter into purported loan agreements with various shell corporations owned by Lefkowitz, most of which were based in the Turks and Caicos Islands. It was understood by the conspirators that Unico would purposefully default on the loan agreements so that Lefkowitz’s companies could initiate sham lawsuits against Unico.

Each and every one of these sham lawsuits would be brought by Florida-based lawyers in a Sarasota, Florida court. The Florida attorneys, even though they represented opposite sides in the lawsuits, would obtain their pleadings from a single Manhattan-based law firm that oversaw the sham lawsuits. Very soon after each lawsuit was filed C and typically within the very same week C Lopez and Lefkowitz would draft a written settlement agreement. The terms of the written settlement agreement would be extremely favorable to Lefkowitz. In short, Lopez would agree to settle Unico’s debt by issuing unregistered shares of stock worth on average seven times the debt that Unico actually owed. According to a secret side-agreement with Lopez, Lefkowitz would sell the shares on the open market to unsuspecting buyers and kick back a portion of the proceeds to Unico. This kickback would take the form of a new loan C which would have the added benefit of continuing the fraud scheme.

According to the indictment, Lopez also tried to obstruct an SEC probe into his misconduct by refusing to turn over emails, which he printed and concealed in two manila folders marked “Files Deleted” and another marked “Not Released to SEC Subpoena (Delete).” The indictment also alleged that Lopez redacted portions of an email and tried to delete it from his computer, and later lied to the SEC under oath during deposition testimony.

Lopez faces up to a total of 65 years in prison and $750,000 in fines. According to public filings, Lopez resigned his positions as CEO and President of Unico on June 9, 2012.

United States Attorney Duffy emphasized that this type of fraud attacks the very heart of our financial system. "The leaders of corporations—including and especially CEOs—owe a special duty to their shareholders. When these corporate leaders ignore that duty and use their positions to enrich insiders, it not only harms shareholders, but also threatens to undermine confidence in our financial markets and slows our country’s ongoing economic recovery." Duffy added that this investigation was initiated by special agents of the Federal Bureau of Investigation.

Lopez is expected to appear in court before the Honorable Barbara L. Major on January 23, 2013 at 9:30 a.m. for a bond hearing, and before the Honorable Irma E. Gonzalez, United States District Court Judge on February 22, 2013 at 2:00 p.m., for a motion hearing.

DEFENDANT Case Number: 12CR5236-IEG   Mark Anthony Lopez       SUMMARY OF CHARGES

Conspiracy to Commit Securities Fraud, in violation of Title 18, United States Code, Section 1349. Maximum penalties: 25 years in prison, 5 years= supervised release, a $250,000 fine and a $100 special assessment.

Destruction, Alteration and Falsification of Records, in violation of Title 18, United States Code, Section 1519. Maximum penalties: 20 years in prison, 5 years’ supervised release, a $250,000 fine and a $100 special assessment

  INVESTIGATING AGENCY

Federal Bureau of Investigation

An indictment itself is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the United States meets its burden in court of proving guilty beyond a reasonable doubt.

United States Attorney Laura E. Duffy announced that former Customs and Border Protection Officer Thomas P. Silva was sentenced today by United States District Judge Anthony J. Battaglia to serve eight months in custody after Silva pled guilty to concealing a person from arrest, in violation of Title 18, United States Code, Section 1071, and wire fraud, in violation of Title 18, United States Code, Section 1343. As part of the sentence, Judge Battaglia ordered Silva to forfeit over $16,000 in illegal proceeds from his criminal activity and pay $8, 129.37 in restitution to Farmers Insurance, the victim of his wire fraud scheme.

Silva previously admitted to concealing a wanted fugitive from arrest while on duty at the San Ysidro Port-of-Entry. In particular, Silva admitted allowing the fugitive to enter the United States from Mexico without inspection - despite verifying the fugitive's status using CBP's computer systems. Silva 2 further assisted the fugitive by purposefully entering inaccurate information related to the fugitive's car in CBP's computer system in an effort to help the fugitive elude arrest.

Silva also admitted in his plea agreement to engaging in a separate scheme to defraud Farmers Insurance of over $7,000 by falsely reporting that his Nissan Titan pickup truck had been stolen from a local San Diego community. Silva admitted, however, that he had in fact taken the truck to Mexico prior to reporting it stolen in furtherance of his fraudulent scheme. Thereafter, Silva filed the false claim with Farmers Insurance, which the insurance company then paid based on his misrepresentations.

In handing down the judgment, Judge Battaglia told Silva that his conduct was "an abomination" and that he had "brought shame" to the United States by carrying out these criminal activities while working as a CBP officer.

United States Attorney Duffy praised the members of the Border Corruption Task Force, a federal task force comprised of law enforcement officials from the Federal Bureau of Investigation, CBP-Internal Affairs, CBP-Field Operations, the Transportation Security Administration, and the Drug Enforcement Administration for their outstanding work to uncover Silva's criminal activity. Duffy added that her Office had a "zero tolerance" policy for government employees who thought they were above the laws that they were sworn to enforce.

DEFENDANT   Criminal Case No. 12CR4050-AJB Thomas P. Silva       SUMMARY OF CHARGES Count 1: Title 18, United States Code, Section 1343 B Wire Fraud

Count 2: Title 18, United States Code, Section 1071 B Concealing Person From Arrest   INVESTIGATING AGENCIES

Federal Bureau of Investigation
Transportation Security Administration
Customs and Border Protection
Drug Enforcement Administration

*Indictments and complaints are not evidence that the defendant committed the crime charged.  All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.    

United States Attorney Laura E. Duffy announced today that United States District Judge Marilyn L. Huff sentenced former United States Border Patrol (USBP) agent Rodolfo Zuniga to serve 37 months in prison and five years of supervised release, and to pay $9,937.71 in restitution to the United States based on his conviction of three federal crimes: (1) possession of images of minors engaged in sexually explicit conduct, in violation of Title 18, United States Code, Section 2252(a)(4)(B); (2) theft of government property, in violation of Title 18, United States Code, Section 641; and (3) interstate transportation of stolen goods, in violation of Title 18, United States Code, Section 2314. Judge Huff also ordered Zuniga to comply with all federal, state, and local laws, including to register as a sex offender.

According to information included in Zuniga’s written plea agreement and discussed at his sentencing, during the period between November 2009 and March 2010, Zuniga was a USBP agent 2 employed by U.S. Customs and Border Protection (CBP), U.S. Department of Homeland Security (DHS). He was assigned to the Imperial Beach Border Patrol Station, San Diego Sector, located in Imperial Beach, California.

While assigned to the Imperial Beach USBP station, Zuniga served as an Explorer Scout Advisor, and while serving in that capacity he had access to equipment owned by the USBP/CPB. The equipment included night vision goggles (NVGs) and global positioning system (GPS) units. From time to time, Explorer Scouts under Zuniga's supervision used that equipment as part of their training. While assigned to the Imperial Beach USBP station, Zuniga stole four sets of NVGs and one GPS unit, and thereafter sold them on the Internet auction and shopping website, eBay, Inc. Zuniga received payments for the stolen property through PayPal, Inc., from an individual located in China. The total amount of money Zuniga received for the NVGs, which were not recovered, was $9,937.71. The GPS unit was sold to a couple in New Jersey, for $77.73. Agents recovered the GPS unit.

On June 29, 2012, agents served a federal search warrant at Zuniga’s Chula Vista apartment. Zuniga's desktop computer and an external hard drive were seized. Later forensic analysis revealed the computer and external hard drive contained 384 visual depictions of minors engaged in sexually explicit conduct (89 images were discovered on the desktop computer; the external hard drive contained 220 images and one video).

Zuniga was arrested by Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the DHS Office of Inspector General (OIG). Zuniga resigned from the USBP on July 16, 2012.

DEFENDANT   Case Number: 12CR3759-H Rodolfo Zuniga       SUMMARY OF CHARGES

Count 1 - Title 18, United States Code, Section 641 (Theft of Government Property) Count 2 - Title 18, United States Code, Section 2314 (Interstate Transportation of Stolen Goods)
Count 3 - Title 18, United States Code, Section 2252(a)(4)(B) (Possession of Child Pornography)

  INVESTIGATING AGENCIES

Immigration and Customs Enforcement's Homeland Security Investigations
Department of Homeland Security Office of Inspector General

An indictment charging San Diego resident Nima Ali Yusuf, 24, with conspiracy to provide material support to terrorists, conspiracy to provide material support to al-Shabaab and making false statements to a government agency in a matter involving international terrorism, was unsealed today, Laura E. Duffy, U.S. Attorney for the Southern District of California, announced.

With the assistance of Customs and Border Protection, special agents of the FBI arrested Yusuf on Nov. 12, 2010. On Nov. 15, 2010, U.S. Magistrate Judge Nita L. Stormes arraigned Yusuf on the indictment. Yusuf will be held without bail pending a detention hearing scheduled for Nov. 18, 2010.

According to U.S. Attorney Duffy, the arrest arises from an investigation by the San Diego Joint Terrorism Task Force.

The charge of conspiracy to provide material support to terrorists carries a maximum penalty of 15 years in prison and a $250,000 fine. The charge of conspiracy to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. The charge of making false statements to a government agency in a matter involving international terrorism carries a maximum penalty of eight years in prison and a $250,000 fine.

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