FEDERAL DISTRICT ARCHIVE
Southern District of California
Press releases recorded for this federal judicial district.
Drug and Ghost Gun Trafficker Sentenced to 87 MonthsRead the Press Release
NEWS RELEASE SUMMARY – April 19, 2024
SAN DIEGO – Carlos Mendoza of San Diego was sentenced in federal court today to 87 months in prison following his admission that he trafficked in methamphetamine and ghost guns.
Mendoza pleaded guilty to selling methamphetamine to undercover federal agents in February of 2023. According to the plea agreement, Mendoza also admitted to illegally selling eight privately-made firearms, which are commonly referred to as “ghost guns.” Ghost guns are assembled from firearm parts and lack markings—or contain non-standard markings—which make them difficult to trace when recovered from a crime scene.
Mendoza’s arrest was part of the Privately Made Firearm Crime Reduction Project, which ran from February to May of 2023. The project was initiated to address gun violence and the proliferation of ghost guns in San Diego. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the San Diego Police Department (SDPD) used data analytics to determine areas where there was an increase in gun violence and where crime guns were being recovered. ATF and SDPD employed an intelligence-led policing effort throughout the 90-day initiative to determine where to place resources to have the greatest impact. The project resulted in the seizure of 165 ghost guns and the prosecution of 33 people, including Mendoza.
“Removing dangerous drugs and illegal guns from the street makes all of us safer,” said U.S. Attorney Tara McGrath. “Now we’ve removed a dealer from the equation, too.”
“Individuals who are engaged in the business of making firearms for livelihood or profit as opposed to personal use, must obtain a federal firearms license, and must comply with federal laws that require firearms to be serialized,” said ATF Los Angeles Field Division Special Agent in Charge Christopher Bombardiere. “ATF will continue to investigate criminal possession of ghost guns and those who traffick them with its local partners to make our communities safer.”
This case was prosecuted by Assistant U.S. Attorney Shital H. Thakkar.
DEFENDANT Case Number 23-cr-01436-RBM
Carlos Mendoza Age: 31 San Diego, CA
SUMMARY OF CHARGES
Distributing Methamphetamine – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Life in prison and $10 million fine
AGENCY
Bureau of Alcohol, Tobacco, Firearms and Explosives
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Man Charged in $1.49 Million Scam Involving Bitcoin ATM Deposits and Bulk Gold Purchases; Victim is Retiree who Lost Life SavingsRead the Press Release
NEWS RELEASE SUMMARY – April 18, 2024
SAN DIEGO – Xilin Sun made his first appearance in federal court today to face charges that he participated in a multinational fraud conspiracy that targeted a 70-year-old retiree from Carlsbad who was tricked into handing over $1.335 million.
According to the complaint, the San Diego Elder Justice Task Force learned of the fraud scheme after the victim reported to Carlsbad police that she was duped over a period of months by fraudsters posing as government, bank and tech-support employees. Specifically, she said she was using her computer when a pop-up window appeared, advising her to call for help because her computer had been hacked.
When she made the call, she was transferred through a series of co-conspirators pretending to work in tech support who told her to download software on her computer. She was also told her personal identifying and bank account information were compromised and was subsequently referred to co-conspirators posing as employees from her financial institutions. The victim was then told she needed to “secure” her assets. At the direction of someone posing as a bank employee, she deposited approximately $55,700 into Bitcoin ATMs located in North County San Diego.
The complaint further describes how once the scammers discovered the victim had substantial savings, they convinced her she could safeguard her funds by obtaining gold bars and sending them to the U.S. treasury, which would create a locker under her name. Over the course of two months, the victim sent approximately $1,335,000 via three separate wire transfers to a precious metal business located in San Marcos, California. Once each of the wire transfers were completed, the victim was instructed to pick up the purchased precious metals—consisting of mostly gold—and to package them. The victim was then directed to hand the package over to an individual under the false pretense that it was being “secured” for safekeeping. In reality, the victim was scammed out of her life savings.
According to the complaint, in February 2024, the scammers reached out to the victim yet again and instructed her to purchase $100,000 worth of additional gold. This time, however, the victim contacted the FBI, which set up a controlled delivery of a package made to look like it contained $100,000 in gold.
The complaint described how the victim met with one of the conspirators outside a bank in Carlsbad. After handing the package to the conspirator, task force agents followed the first conspirator, who traveled approximately two miles before handing the package to a second conspirator, later identified as defendant Xilin Sun.
Sun was stopped by the California Highway Patrol, the complaint said. In Sun’s vehicle, investigators located the fake gold package and the victim’s receipt. Agents also located additional evidence linking Sun to the victim, including photos of the fake gold the victim had sent to the conspirators over the phone, a copy of an invoice, and the receipt for the gold.
“If you think you may have been scammed, report it immediately,” said U.S. Attorney Tara McGrath. “These schemes are organized by sophisticated global networks with the ability to fool even the most savvy computer users. But if victims report quickly, we have a better chance of catching the scammers and retrieving stolen money.”
“Thousands of people fall victim to elder fraud every year. Many do not report the fraud because they are embarrassed or afraid; however, the best course of action is to report scams as early as possible,” said Acting Special Agent in Charge John Kim. “The San Diego Elder Justice Task Force is dedicated to relentlessly pursuing criminals who prey on innocent individuals for personal gain.”
This case was investigated by the San Diego Elder Justice Task Force and its member agencies, including the U.S. Attorney’s Office, Federal Bureau of Investigation, San Diego County District Attorney’s Office, Carlsbad Police Department, San Diego Police Department, and the California Highway Patrol.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available through the National Elder Fraud Hotline: 1-833 FRAUD-11 (1-833-372-8311). You can also report fraud to any local law enforcement agency or on the FBI’s Internet Crime Complaint Center at www.ic3.gov.
The FBI requests victims report:
- The name of the person or company that contacted you.
- Methods of communication used, including websites, emails, and telephone numbers.
- Any bank account number(s) to which you wired funds and the recipient name(s).
- The name and location of the metal dealer company and the account to which you wired funds, if you were instructed to buy precious metals.
This case is being prosecuted by Assistant U.S. Attorney Kevin Mokhtari.
DEFENDANT Case Number 24MJ1502-BLM
Xilin Sun Age: 35 Ontario, California
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud – Title 18, U.S.C., Section 1349
Criminal Forfeiture – Title 18, U.S.C., Sections 981(a)(1)(C), 982(a)(2)(A), and Title 28, U.S.C., Section 2461(c)
Maximum Penalties: Thirty years in prison; $1 million fine
AGENCIES
Federal Bureau of Investigation
San Diego Elder Justice Task Force
Carlsbad Police Department
California Highway Patrol
San Diego County District Attorney’s Office
San Diego Police Department*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Virginia-Based Defense Contractor Pleads Guilty to Bribery Conspiracy Involving Government Contracts Worth More Than $100 MillionRead the Press Release
NEWS RELEASE SUMMARY – April 16, 2024
SAN DIEGO – Cambridge International Systems, Inc., a defense contractor headquartered in Arlington, Virginia, pleaded guilty in federal court today, admitting that it participated in a bribery scheme with the company’s former Executive Vice President Russell Thurston, and former Naval Information Warfare Center employee James Soriano, among others.
According to Cambridge’s plea agreement, the company — acting through Thurston and an unnamed employee — gave various things of value to Soriano, including jobs for Soriano’s family and friends, meals, and a ticket to the 2018 MLB All Star Game held at Nationals Park in Washington D.C. One of the friends hired by Cambridge, Liberty Gutierrez, was giving Soriano $2,000 a month from her Cambridge salary, according to Gutierrez’s plea agreement.
In return, Soriano, acting in his position as a contracting officer’s representative at Naval Information Warfare Center ensured that Cambridge was awarded two large task orders. Soriano further ensured Cambridge was able to capture a steady stream of government funds by approving various projects on the task orders after they were awarded the contract, including more than 70 projects on one of the task orders. As a result of the conspiracy, the government obligated more than $32 million on one of the task orders and over $100 million on the other.
Soriano also allowed Cambridge employees to draft various procurement documents for him, even where the company was competing for the contract against other bidders. Thurston and Soriano worked together to remove document properties so other government employees would not know of Cambridge’s involvement in drafting the documents.
Cambridge admitted that the company made a total profit of $7,429,995.23 as a result of the conspiracy. Cambridge is next scheduled to appear before U.S. District Judge Todd W. Robinson for sentencing on July 3, 2024.
“Service members depend on the honesty and integrity of our nation’s defense contractors to be able to do their jobs,” said U.S. Attorney Tara McGrath. “A business model based on fraud is both illegal and undermines the fairness of the system.”
“The guilty plea of Cambridge International Systems, Inc. is a constructive step towards holding the company accountable for its active participation in an illegal scheme that corrupted the government’s acquisition processes,” said Bryan D. Denny, Special Agent in Charge of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Western Field Office. “Such illicit actions ultimately waste invaluable U.S. taxpayer money and degrade American warfighter readiness.”
“Cambridge International Systems, Inc. demonstrated a culture of complicity in undermining the defense contracting process,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “IRS:CI is committed to supporting investigations into activities that can harm national security, whether directly or indirectly, and to working with our law enforcement partners to ensure our warfighters are protected from this sort of corruption.”
“Bribery and procurement fraud within the Department of the Navy threatens warfighter safety and perpetuates unfair contracting practices that negatively affect honest businesses,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our partners remain committed to exposing those who abuse the procurement process for personal gain.”
Thurston and Soriano are separately charged with conspiracy to commit bribery and bribery in case number 24CR341-TWR.
DEFENDANTS Case Number 24-cr-759-TWR
Cambridge International Systems, Inc. Arlington, VA
SUMMARY OF CHARGES
Conspiracy to Commit Bribery - Title 18, U.S.C., Section 371
Maximum penalty: Five years corporate probation; a maximum $500,000 fine or twice the gross gain or loss resulting from the offense, whichever is greatest.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Small Business Administration – Office of Inspector General
Internal Revenue Service Criminal Investigation
Department of Health and Human Services – Office of Inspector General
If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.
United States Recovers More Than $2 Million in Aircraft Collision CaseRead the Press Release
NEWS RELEASE SUMMARY – April 16, 2024
SAN DIEGO – The United States has recovered $2,020,000 in a lawsuit it brought on behalf of the Department of the Navy for damages incurred as a result of a May 30, 2020, aircraft collision at Brown Field Municipal Airport in San Diego.
In 2023, the United States brought a lawsuit against defendants Christopher Sanders, Tac Air Ops, LLC, Tac Air California, Inc., Kapowsin Air Sports, Ltd., the City of San Diego, Brown Field Municipal Airport, Brown Field Aviation Ventures, Inc., and Lancair Corporation seeking damages as a result of the defendants’ negligent acts and/or omissions arising from the aircraft collision. The collision involved a parked United States Marine Corps MV-22 “Osprey” aircraft and a taxiing De Havilland DHC-6-100 “Twin Otter” aircraft, owned by Kapowsin, and leased and operated by the Tac Air defendants.
On April 15, 2024, the United States and defendants stipulated to dismiss the case with prejudice, after entering a global settlement agreement in which the United States recovered $2,020,000.
“This unfortunate incident caused an MV-22 to be stricken from service, which resulted in a significant loss to the United States and the Department of the Navy,” said U.S. Attorney Tara McGrath. “Securing an early resolution in this case achieved the right result,” said McGrath.
This case was handled by Assistant U.S. Attorney Mary Cile Glover-Rogers.
Case Number
United States of America v. Christopher Sanders et al., 23-cv-1000-W-DDL
SUMMARY OF CLAIMS
1. Negligence
2. Breach of Restrictive Covenants
AGENCY
The United States brought this lawsuit on behalf of the Department of the Navy
Final Defendants Sentenced in $65 Million TRICARE FraudRead the Press Release
NEWS RELEASE SUMMARY – April 12, 2024
SAN DIEGO – The final two members of a massive conspiracy to bilk TRICARE, the military’s healthcare program, out of more than $65 million have been sentenced in federal court.
Former U.S. Marine Joshua Morgan and former U.S. Navy Sailor Kyle Adams were sentenced to 21 months and 15 months, respectively, and ordered to pay millions in restitution and forfeit the fruits of their criminal activity.
Morgan and Adams have admitted that they recruited fellow servicemembers and their dependents to receive expensive prescription compounded drugs, while others in the conspiracy wrote bogus prescriptions and filled out duplicitous paperwork to process fraudulent insurance reimbursements, resulting in at least $65 million in losses to TRICARE.
Both the defendants were working for Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, who quarterbacked the scheme. Jimmy Collins received a 10-year prison sentence; Ashley Collins was sentenced to 18 months in home confinement. To account for all the fraud, the couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE. Other patient recruiters, including Daniel Castro, Jeremy Syto and Bradley White were previously sentenced to custody.
According to plea agreements, the servicemembers that Morgan and Adams recruited agreed to receive the pricey compounded medications in return for a monthly kickback of approximately $300. For young Sailors and Marines-turned-straw-beneficiaries, this money was equivalent to a significant portion of their monthly paycheck. Morgan noted that “it took very little work to sign people up to receive free money.”
For recruiting bogus patients, defendants Morgan and Adams were paid an illegal kickback of between 3 and 7 percent of the total TRICARE reimbursement paid to the pharmacy for the drugs sent to their recruits. By the time this fraud scheme was in full swing, the average cost for these compounded drugs was over $13,000 for a 30-day supply, peaking at around $25,000 for individual drugs.
Over the course of the conspiracy, those illegal kickbacks amounted to at least $2,633,942.69 for Morgan, which, in recognition of his role as the top-level recruiter in this multi-level marketing scheme, was more than twice as much as the next nearest patient recruiter. Meanwhile, Adams earned more than $1 million for his efforts.
To fund these kickbacks, based on false pretenses and representations, TRICARE paid at least $11,490,654.00 in insurance reimbursements for compounded medications prescribed to straw beneficiaries directly recruited by defendant Adams. During the same period, TRICARE paid at least $4,418,709 for compounded medications prescribed to straw beneficiaries directly recruited by defendant Morgan, although that amount underrepresents the severity of his criminal conduct due to his role as a top-level recruiter responsible in part for the losses to TRICARE caused by various sub-recruiters.
The doctors, Carl Lindblad and Susan Vergot, and a nurse practitioner, Candace Craven, who wrote the fraudulent prescriptions and filled out other duplicitous paperwork, were previously sentenced. The pharmacy that filled the fraudulent prescriptions, CFK, Inc., also previously pleaded guilty.
According to the pleadings, the sharp increase in the number of bogus prescriptions for compounded drugs was the result of multiple fraud schemes, including this one, that popped up around the country. As a result, the TRICARE program faced a $2 billion explosion in liability for compounded prescription drugs.
“Today’s sentencing closes the last chapter on this outrageous fraud scheme that almost put TRICARE into bankruptcy,” said U.S. Attorney Tara McGrath. “Our military members and taxpayers deserve so much better. The magnitude and significance of this case reflects our continued dedication to the well-being of the armed forces and their families, as well as our steadfast protection of the U.S. taxpayer.”
“NCIS will not stand by as individuals shamelessly attempt to disrupt the lives of those who have and continue to serve our country, and steal from what they rightfully earned,” said Director Omar Lopez, Naval Criminal Investigative Service. “This case highlights NCIS’ investigative capabilities and our commitment to collaborate with our law enforcement partners in detecting and dismantling these criminal acts of fraud.”
“Today’s sentencing demonstrates the Defense Criminal Investigative Service’s (DCIS) unwavering commitment to hold accountable those individuals who commit TRICARE fraud and imperil our military healthcare system,” said Kelly Mayo, Director DCIS. “The outstanding work of the investigative team ensured the perpetrators were held criminally accountable. I want to thank the U.S. Attorney’s Office and the Naval Criminal Investigative Service for their continuing dedication to the pursuit of justice.”
During the course of the investigation, authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud, including an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; cashier’s checks; dozens of pieces of farm equipment and tractor-trailers; and three pieces of Tennessee real estate.
This case was prosecuted by Assistant U.S. Attorney Mark W. Pletcher.
DEFENDANTS Case Number: 18-CR-1027-JLS
Joshua Morgan Age: 31 San Diego, CA
DEFENDANTS Case Number: 18-CR-0432-JLS
Kyle Adams Age: 36 Victoria, Texas
SUMMARY OF CHARGES
Joshua Morgan:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $4,418,709 to DHA/TRICARE
Kyle Adams:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $11,490,654 to DHA/TRICARE
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office
Woman Convicted by Federal Jury of Burning Down Local San Diego BusinessRead the Press Release
NEWS RELEASE SUMMARY – April 8, 2024
SAN DIEGO – A federal jury has convicted Carey Alice Hernandez, bookkeeper for Off Road Warehouse headquartered in Kearny Mesa, of intentionally setting fire to the business to cover up the disappearance of more than $700,000 while she was in charge of company finances.
After a four-day trial, jurors found Hernandez guilty of malicious destruction of a building by means of fire, witness tampering and making false statements.
In late 2018, the owner of Off Road Warehouse, also known as ORW, which sold and installed automotive parts and gear for off-roading, decided to sell the business located at 7915 Balboa Avenue. The purchaser began an audit of ORW. The audit revealed that during Hernandez’s tenure as bookkeeper and controller in charge of the company books and records, $744,621 went missing between January 2015 and March 2019.
The jury found that in the early morning hours of March 28, 2019, Hernandez started the fire at Off Road Warehouse, causing the building to burn to the ground.
According to evidence presented at trial, shortly before the fire, local surveillance video showed an SUV with dark wheel rims driving near the defendant’s house in Point Loma. Further video surveillance showed the defendant driving the same vehicle to the scene of the arson before she started the inferno. Surveillance also showed her driving back home after the fire, in the same dark-rimmed SUV.
The day after the fire, Hernandez sent misleading texts to ORW employees in an attempt to convince them her wheel rims were light, not dark. Specifically, after learning that law enforcement was searching for a dark- rimmed SUV, she tried to convince employees who had changed her vehicle’s distinctive rims before the fire that her vehicle had light rims during the time of the fire and thus, the SUV spotted on surveillance cameras could not be hers.
During a subsequent interview with special agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Hernandez lied about the distinctive rims on her vehicle. However, the lies to law enforcement and attempts to tamper with witnesses were contradicted by the video surveillance from the day after the fire, showing the defendant driving around San Diego in her dark-rimmed, not light-rimmed, SUV. These acts resulted in her convictions for witness tampering and false statements.
ATF’s National Response Team (NRT) investigated this case in conjunction with San Diego’s Metro Arson Strike Team (MAST). The NRT is ATF’s mobile, rapid response team which investigates the cause and origin of large fires, explosions and bombings at the request of local public safety agencies.
“While it is extremely fortunate that no one was physically hurt in this blaze, it was a devastating loss for the company,” said U.S. Attorney Tara McGrath. “This defendant used arson, tampering with witnesses, and deceit to put the community in danger, but the jury held her accountable.”
“ATF’s National Response Team responded to this multimillion-dollar loss within 24 hours determining the fire was deliberately set,” said ATF Los Angeles Field Division Special Agent in Charge Chris Bombardiere. “Arson crimes are not victimless fires. This criminal act devastated a business and the livelihood of several individuals and families. ATF stands willing and ready to partner with federal, state, and local public safety officials to keep our communities free from dangerous arsonists.”
Hernandez is scheduled to be sentenced July 12, 2024, at 9:30 a.m. before U.S. District Judge Jinsook Ohta.
This case is being prosecuted by Assistant U.S. Attorneys Matthew Brehm and Carl Brooker.
DEFENDANT Case Number 22cr145-JO
Carey Alice Hernandez Age: 46 Rathdrum, Idaho
SUMMARY OF CHARGES
Malicious Destruction of Building by Means of Fire – Title 18, U.S.C., Section 844(i)
Maximum penalty: No less than five years in prison and no more than 20 years and $250,000 fine
Witness Tampering – Title 18, U.S.C., Section 1512(b)(3)
Maximum penalty: Twenty years in prison and $250,000 fine
False Statements – Title 18, U.S.C., Section 1001(a)(2)
Maximum penalty: Five years in prison and $250,000 fine
INVESTIGATING AGENCY
Bureau of Alcohol, Tobacco, Firearms, and Explosives
Man Who Distributed Fentanyl that Resulted in Teenager’s Death Sentenced to More than 12 Years in PrisonRead the Press Release
NEWS RELEASE SUMMARY – April 5, 2024
SAN DIEGO – Jose Daniel Ramirez of San Diego was sentenced in federal court today to 151 months in prison for selling the fentanyl pills that resulted in the fatal overdose of 18-year-old Poway resident Kole William Pearson on January 3, 2023.
According to court documents, Ramirez sold “2 blues,” which were fentanyl pills disguised as oxycodone, to Pearson, who died of a fentanyl overdose after taking them. Ramirez learned of Pearson’s death and quickly changed his phone number, informed clients of his new number, and continued to sell fentanyl.
About a month later, law enforcement officers arrested Ramirez, secured a warrant and searched his residence, where they found approximately 2,600 blue pills containing fentanyl, other drugs including cocaine, plus two Glock handguns and over 250 rounds of various ammunition. One of the handguns was fully loaded with a round of ammunition in the chamber.
“The defendant knew his product had already taken one life, yet he continued to sell fentanyl pills from the same deadly batch,” said U.S. Attorney Tara McGrath. “There is nothing we can do to bring Kole Pearson back, but we join his family and friends in lifting up his memory and pledge to continue our relentless pursuit of those who value profit more than human lives.”
“HSI continues to work with our state, local and federal partners to identify, disrupt, and dismantle fentanyl trafficking networks through the HSI-led FAST task force,” said Christoper Davis, acting special agent in charge for HSI San Diego. “Members of FAST are fully committed to aggressively pursuing justice against the organizations and individuals who are responsible for dealing this deadly drug in San Diego and further into the United States.”
HSI San Diego FAST is a multiagency task force comprising state, local, and federal partners and was first established in August 2022 focusing on the disruption and dismantlement of criminal organizations that smuggle and distribute fentanyl within San Diego County. HSI’s FAST targets fentanyl smuggling and distribution networks to counter the rising overdose rate and decrease the availability and accessibility of fentanyl.
According to the government’s sentencing memo, which quoted victim impact statements, Pearson’s family described him as “a big guy with a huge personality and the biggest silly smile you’ve ever seen,” and a “very bright, thoughtful, and intelligent” guy who everyone liked. His sisters said they lost their “charming, funny, and goofy little brother.” His friends recognized his “kindness, funny antics, and genuine friendship.” Pearson worked at a Jersey Mike’s sandwich shop and planned to use his experience to attend culinary school or possibly a vocational program.
The sentencing memo noted that Pearson’s death has touched everyone in his life deeply and will be felt for a lifetime. Even Pearson’s high school teacher memorializes him by keeping an empty seat in the class.
This case is being prosecuted by Assistant U.S. Attorneys Sean Van Demark and Dylan M. Aste.
DEFENDANT Case Number 23cr00274-RBM
Jose Daniel Ramirez Age: 21 San Diego, CA
SUMMARY OF CHARGES
Distribution of Fentanyl – Title 18, United States Code, Section 841(a)(1)
Maximum penalty: Twenty years in prison
INVESTIGATING AGENCIES
Homeland Security Investigations
San Diego County Sheriff’s Department
U.S. Drug Enforcement Administration
Seven Charged in Theft of California Benefits for Low-Income FamiliesRead the Press Release
NEWS RELEASE SUMMARY – March 4, 2024
SAN DIEGO – Seven people were arrested and charged this week in connection with the theft of hundreds of thousands of dollars in public-assistance benefits from low-income families that need the funds to pay for food, housing and other necessities.
The defendants were taken into custody by a U.S. Secret Service-led task force as part of a three-day effort to crack down on this devastating and growing fraud in which California benefits are drained from recipients’ accounts almost immediately after the funds are dispersed by the state, typically early in the month. A simultaneous operation netted three arrests in the Northern District of California.
Marian Dogaru, Catalan Craciun, Vasile Ionita, Andrei Cristian Geangasau, Domitru Ducila Unguru, Roberto Calin and Razvan Iulian Gaspar are charged with stealing Electronic Benefit Transfer (EBT) account information and making fraudulent cash withdrawals at ATMs using that stolen EBT information.
According to the complaints, between June 2022 and February 2024, over $181 million has been stolen from EBT beneficiaries in California. Most of these stolen funds have come from unauthorized ATM withdrawals. The complaints also allege that victims of the scheme are largely low-income families who depend on EBT benefits to buy food and other household necessities.
“EBT fraud literally takes food out of the mouths of children,” said U.S. Attorney Tara McGrath. “Parents who don’t know they’ve been targeted get to the grocery checkout and discover their EBT cards have been wiped clean. We are taking proactive steps to prevent this appalling crime and punish those who take advantage of vulnerable people.”
“EBT fraud continues to be an issue in California and throughout the nation,” said Assistant Special Agent in Charge Michael Peck, U.S. Secret Service Office of Investigations. “The U.S. Secret Service will continue to investigate and arrest those responsible for EBT fraud as we seek to disrupt their networks and protect our most vulnerable communities.”
According to charging documents, here’s how the fraud works:
The Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP) is a federally funded assistance program designed to help low-income individuals and families purchase food. In California, SNAP public assistance benefits are distributed through CalFresh and loaded to an account that a qualified recipient can access by means of an access card, similar to a debit or credit card, called the California Advantage Electronic Benefit Transfer (EBT) Card.
The Department of Health and Human Services administers the Temporary Assistance to Needy Families (TANF) program, which provides states with money to support low-income families with children. In California, TANF grant funds are used to operate CalWORKS. Families that apply and qualify for ongoing CalWORKS assistance receive money each month to help pay for housing, food, and other necessary expenses. Like CalFresh, CalWORKS benefits are distributed through the California Advantage EBT card.
To access these benefits, recipient swipe their card through a point-of-sale terminal, or insert it into an ATM, and provide their Personal Identification Number (PIN).
According to the complaints, the U.S. Secret Service has gathered evidence indicating members of what appear to be one or more criminal enterprises are stealing California EBT account information by installing skimmers on point-of-sale terminals and inside ATMs, often in communities with higher concentrations of public benefit recipients. The skimmed data is then often re-encoded onto the magnetic strips of cards that members of the conspiracy use to make unauthorized withdrawals and purchases.
These re-encoded cards are sometimes referred to as “cloned” cards. Cloned cards can be a blank white plastic card, or another debit, credit, or gift card. Cloned cards may have names or numbers embossed on the physical face of the card. A common feature of cloned cards is that the account number encoded on the card’s magnetic strip will not match the number embossed on the card’s face. To facilitate the use of the stolen EBT benefits, members of the scheme will commonly put stickers bearing the account’s PIN on the physical cards, or access devices, that are swiped at a point-of-sale terminal, along with the account balance.
U.S. Attorney McGrath thanked the many law enforcement partners whose work and dedication made this operation a success: The U.S. Secret Service, California Highway Patrol, U.S. Department of Health and Human Services Office of Inspector General, Oceanside Police Department, California Department of Social Services, Homeland Security Investigations, San Diego District Attorney’s Office, San Diego Police Department, San Diego Sheriff’s Department, U.S. Department of Agriculture’s Office of Inspector General, Los Angeles District Attorney’s Office, and the United States Attorney’s Office for the Central District of California.
If you or someone you know has had your EBT benefits stolen, San Diego County’s Department of Health & Human Services Agency requires that the theft be reported within 10 days. More information for San Diego County victims is available at:
https://www.sandiegocounty.gov/content/sdc/hhsa/programs/ssp/ebt_fraud.html.
DEFENDANT Case Number Age Hometown
Marian Dogaru 24MJ1315 38 Barlad City, Romania
Catalan Craciun 24MJ1234 36 Barlad, Romania
Vasile Ionita 24 MJ1289 22 Bucharest, Romania
Andrei Cristian Geangasau 24 MJ1289 23 Bucharest, Romania
Domitru Ducila Unguru 24MJ1298 20 Craiova, Romania
Roberto Calin 24MJ1298 19 Rome, Italy
Razvan Iulian Gaspar 24MJ1345 33 Targu Mures City, Romania
SUMMARY OF CHARGES
Use of Unauthorized Access Devices – Title 18, U.S.C., Section 1029(a)(2) (All Defendants)
Maximum penalty: Ten years in prison and $250,000 fine
Possession of Access Device-Making Equipment – Title 18, U.S.C., Section 1029(a)(4) (Dogaru, Ionita, Geangasu, Unguru, Calin, Gaspar)
Maximum penalty: Fifteen years in prison and $250,000 fine
INVESTIGATING AGENCIES
U.S. Secret Service’s Southern California Cyber Fraud Task Force
San Diego District Attorney’s Office
California Highway Patrol
U.S. Department of Health and Human Services’ Office of Inspector General
California Department of Social Services
San Diego Police Department
San Diego Sheriff’s Department
U.S. Department of Agriculture’s Office of Inspector General
Homeland Security Investigations
Los Angeles District Attorney’s Office
United States Attorney’s Office for the Central District of California
United States Attorney’s Office for the Northern District of California
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Current and Former Minor League Baseball Players Indicted for Insider Trading in Del Taco StocksRead the Press Release
NEWS RELEASE SUMMARY – March 26, 2024
SAN DIEGO – An indictment was unsealed today charging current and former minor league baseball players Jordan Qsar, Grant Witherspoon and Austin Bernard with insider trading in Del Taco, Inc. stocks after they received advanced notice of the acquisition of Del Taco by Jack in the Box, Inc. on December 6, 2021.
According to the indictment, Qsar learned from a close friend who worked at Jack in the Box that the company was acquiring Del Taco. The friend was a senior associate in Jack in the Box’s strategic finance department who personally worked on the acquisition project. The disclosure was a violation of duties to Jack in the Box and its shareholders.
The indictment states that Qsar fraudulently shared the inside information with Witherspoon and Bernard, who were connected to Qsar through collegiate and minor league baseball teams at Pepperdine University and the Tampa Bay Rays.
In the following months, after learning the inside information, Qsar, Witherspoon, and Bernard purchased Del Taco stocks, discussed when and how many shares they were purchasing, and tipped others with the inside information.
According to the indictment, after Jack in the Box and Del Taco went public with the acquisition on December 6, 2021, Del Taco stocks jumped in price from $7.53 to $12.51 per share—representing a 66 percent increase from the prior trading day’s closing price. In the days following, Qsar, Witherspoon, and Bernard sold all their Del Taco stocks, earning them illegal profits of approximately $56,000, $41,800, and $64,600, respectively.
“The system has to be fair for everyone, or the market fails,” said U.S. Attorney Tara McGrath. “Those who seek to undermine this system for personal gain will face consequences.”
“Insider trading directly affects the integrity of our economy,” said FBI San Diego Special Agent in Charge Stacey Moy. “We will continue to work with our federal, state, and local law enforcement partners to ensure people who intentionally undermine and threaten our economy will be brought to justice.”
This case is being prosecuted by Assistant U.S. Attorney Ronald Sou.
DEFENDANTS Case Number: 24-CR-0385-DMS
Jordan Joseph Qsar Age: 28
Grant Lee Witherspoon Age: 27
Austin Lane Bernard Age: 28
SUMMARY OF CHARGES
Title 18 U.S.C. 371 – Conspiracy
Maximum Penalty: Five years in prison; $250,000 fine
Title 15 U.S.C. 78j(b), 78ff & Title 17 C.F.R. 240.10b-5 and 240.10b5-1 – Securities Fraud
Maximum Penalty: Twenty years in prison; $5 million fine
Title 18 USC 1343 – Wire Fraud & Title 18 USC 2 – Aiding and Abetting
Maximum Penalty: Twenty years in prison; $250,000 fine
Title 18 USC 981(a)(1)(C) and Title 28 USC 2461(c) – Criminal Forfeiture
INVESTIGATING AGENCY
Federal Bureau Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
International Trafficker of Counterfeit Apple Products Sentenced to PrisonRead the Press Release
NEWS RELEASE SUMMARY – March 25, 2024
SAN DIEGO – Zhiwei “Allen” Liao was sentenced in federal court today to 51 months in prison for his role as an organizer and leader of an international conspiracy to traffic in counterfeit Apple products. The defendant was also ordered to forfeit two residences along with $120,370 in U.S. currency and more than 200 Apple devices seized during the investigation.
According to court documents, Zhiwei Liao and his brothers, Zhimin Liao and Zhiting Liao, led an international exchange fraud scheme involving more than 10,000 counterfeit iPhones and iPads. The Liaos imported counterfeit iPhones and iPads from China that looked genuine and included identification numbers (IMEI and serial numbers) matching identification numbers on real iPhones and iPads that were under warranty and had been previously sold to customers in the United States and Canada. At the direction of the Liao brothers, co-conspirators traveled to hundreds of Apple Stores across the United States and Canada, and attempted to exchange counterfeit iPhones and iPads for genuine iPhones and iPads resulting in a loss of $6.1 million to Apple, Inc. Zhiwei Liao then sent the fraudulently obtained, but genuine Apple products primarily to China where they were sold at a premium.
In court today, U.S. District Judge Cynthia Ann Bashant said that a significant prison sentence was appropriate because Zhiwei Liao was the organizer and leader of an extensive international criminal organization that trafficked in counterfeit goods throughout North America for several years.
The scheme was sophisticated and dynamic, involving counterfeit devices imported from China that looked like genuine devices under warranty. Zhiwei Liao micromanaged the operations and created a moving target for law enforcement by directing counterfeit Apple products and criminal proceeds to be sent to different co-conspirators, companies, and family members throughout the scheme. Co-conspirators supported these efforts to avoid law enforcement by exchanging the counterfeit products using a variety of false names and email accounts.
The defendant’s brothers, Zhimin Liao and Zhiting Liao, who were also leaders of the conspiracy, were previously sentenced to 41 months in custody in October 2023.
This case is part of a multi-year investigation led primarily by the Federal Bureau of Investigation and the San Diego Police Department that resulted in 12 felony convictions, the forfeiture of five residences in San Diego with an estimated value of more than $4.1 million, over $250,000 in cash, and more than 200 Apple products that were either counterfeit, fraudulently obtained, or used during the criminal operations.
“This was a massive, sophisticated fraud that victimized not only Apple, Inc., but thousands of Apple product owners across North America,” said U.S. Attorney Tara McGrath. “Theft of intellectual property and the sale of counterfeit goods are growing global problems with serious economic implications.”
“Mr. Liao’s sentencing closes a major chapter in a multi-year investigation that exposed an international, elaborate scheme to sell counterfeit goods worldwide,” said FBI San Diego Special Agent in Charge Stacey Moy. “This investigation would not have been successful without the unwavering dedication and persistence of our law enforcement partners. We remain diligent in the pursuit of justice to help maintain the integrity of our economy.”
This case is being prosecuted by Assistant U.S. Attorney Timothy F. Salel.
DEFENDANTS Case Number 19cr4407-BAS
Zhiwei Liao, aka “Allen” San Diego, CA Age: 34
Zhimin Liao, aka “Jimmy” San Diego, CA Age: 36
Zhiting Liao, aka “Tim” San Diego, CA Age: 33
Dao Trieu La, aka “Selena” San Diego, CA Age: 32
Mengmeng Zhang, aka “Aria” San Diego, CA Age: 31
Tam Nguyen, aka “Kelly,” San Diego, CA Age: 39
Charley Hsu San Diego, CA Age: 41
Danny Tran Chan San Diego, CA Age: 32
Phillip Pak, aka “Teddy” San Diego, CA Age: 33
Deedee Zhu, aka “David,” San Diego, CA Age: 35
Jiaye Jiang, aka “joejoekong” San Diego, CA Age: 34
Hyo Yang, aka “Will” San Diego, CA Age: 33
SUMMARY OF CHARGES
Conspiracy to Traffic in Counterfeit Goods – Title 18, U.S.C., Section 2320
Maximum penalty: Ten years in prison, $2 million fine, mandatory restitution, and forfeiture.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Police Department
San Diego County Sheriff’s Department
U.S. Customs and Border Protection
Homeland Security Investigations
U.S. Marshals
Man Admits Smuggling Seven Unauthorized Immigrants Through Sewer Pipes between Mexico and the U.S.Read the Press Release
NEWS RELEASE SUMMARY – March 21, 2024
SAN DIEGO –Kevin Noe Campos Villa of Tijuana pleaded guilty in federal court today to human smuggling charges, admitting he guided seven unauthorized immigrants through sewer pipes during heavy rains. Several had to be rescued from the Tijuana River by San Diego lifeguards.
Campos is scheduled to be sentenced on June 17, 2024, at 10:00 a.m. before U.S. District Judge Linda Lopez.
Campos was arrested on January 22, 2024, after U.S. Border Patrol agents observed Campos directing the individuals from Mexico into the United States through the pipes about two miles west of the San Ysidro Port of Entry during heavy rains.
When confronted by Border Patrol agents, Campos and three of the immigrants he was guiding ran to avoid apprehension. While attempting to escape, they fell into the Tijuana River and had to be rescued by San Diego lifeguards.
According to court records, two of the unauthorized immigrants who were rescued stated that they feared for their lives when crossing the river because they did not know how to swim. One stated that he was swept away by the river’s current and was able to grab and hold onto a tree branch until his rescue.
Sewer tubes between the United States and Mexico have grates to prevent individuals from illegally entering the United States. During heavy rain, the grates are opened to let water flow through the sewer tubes without damaging the grates. Due to heavy rain that was occurring in the area at the time, the grates were open and Campos used the opportunity to smuggle the unauthorized immigrants into the United States.
Court documents established Campos agreed to guide the group in the January event, and in exchange he would have his own smuggling fee reduced to $6,000. Campos also admitted that he has been working for smugglers by building ladders to smuggle people across the U.S.-Mexico border fence.
“This case is yet another example of transnational smuggling organizations placing profits over safety,” said U.S. Attorney Tara McGrath. “Thankfully, due to law enforcement intervention and the assistance of local lifeguards, all lives were spared.”
“This is an important reminder that safety is of little concern to transnational criminal organizations,” said Chief Patrol Agent Patricia McGurk-Daniel. “U.S. Border Patrol agents will continue to target human smugglers and deliver consequences to those who violate the laws of our nation.”
This case is being prosecuted by Assistant U.S. Attorney Jessica Adeline Schulberg.
DEFENDANT Case Number 24CR0290-LL
Kevin Noe Campos Villa Age: 20 Tijuana, Mexico
SUMMARY OF CHARGES
Title 8, United States Code, §1324(a)(1)(A)(i) – Bringing in Illegal Aliens at a Place other than a Designated Port of Entry
Maximum penalty: Ten years in prison; $250,000 fine
AGENCY
United States Border Patrol
San Diego Lifeguards
Shipyard Contractor Pleads Guilty to Stealing Nearly $600,000 Worth of Computer Equipment from the U.S. NavyRead the Press Release
NEWS RELEASE SUMMARY – March 19, 2024
SAN DIEGO – Ernesto Saldivar, a civilian contractor at General Dynamics NASSCO who was part of the shipyards’ modernization efforts, pleaded guilty today to stealing nearly $600,000 worth of computer equipment from three U.S. Navy ships.
According to Saldivar’s plea agreement, from November 2022 to August 2023, he stole hundreds of items, such as hard drives and laptops, from declassified areas on ships undergoing maintenance. Saldivar was selling the stolen items, including two hard drives containing military communications, on eBay. The affected ships included the USS Pinckney, USS Curtis Wilbur and USS Spruance.
Saldivar admitted in his plea agreement that the total aggregate value of the stolen items was $596,997.53, almost all of which he will owe the United States government in restitution. The defendant also admitted to receiving $2,584.98 in payments from eBay sales of the stolen items.
“Stealing from our military doesn’t just hurt the taxpayer, it puts our national security and service members at risk,” said U.S. Attorney Tara McGrath. “The military relies heavily on civilian support, and we will do our part to ensure our service members can trust the civilians standing by their side.”
This case is being prosecuted by Assistant U.S. Attorneys Sarah Goldwasser and Michelle Wasserman.
DEFENDANT Case Number 24CR532-JAH
Ernesto Saldivar Age: 30 San Diego, CA
SUMMARY OF CHARGES
Theft of Government Property – Title 18, U.S.C., Section 641
Maximum penalty: Ten years in prison and $250,000 fine
INVESTIGATING AGENCY
Naval Criminal Investigative Service
If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.
GirlsDoPorn Owner Michael Pratt Extradited to Face Sex Trafficking ChargesRead the Press Release
SAN DIEGO – Michael Pratt, the alleged mastermind behind the GirlsDoPorn commercial sex trafficking ring, made his first appearance in federal court today following his extradition from Spain Monday night.
Pratt, who was the owner of the website GirlsDoPorn, was charged in October 2019 in the Southern District of California with sex trafficking crimes in connection with a scheme to deceive and coerce young women to appear in pornographic videos. Pratt was an international fugitive for more than three years before he was arrested in Spain in December 2022. Earlier in 2022, he was named to the FBI’s Top Ten Most Wanted list.
At today’s hearing, Pratt was arraigned and entered a not-guilty plea before U.S. Magistrate Judge Daniel E. Butcher. A detention hearing is scheduled for March 21 at 3 p.m. before Judge Butcher, followed by a motion hearing/trial setting on April 19 at 1:30 p.m. before U.S. District Judge Janis L. Sammartino.
“We cast a wide net in search of Mr. Pratt and now that he is in San Diego, we are prepared to bring him to justice,” said U.S. Attorney Tara K. McGrath. “We extend our deep appreciation to the government of Spain for its assistance in securing his arrest and extradition.”
“Michael Pratt’s initial appearance in San Diego is tangible proof that the pursuit of justice never stops, regardless of length of time or location,” said FBI San Diego Special Agent in Charge, Stacey Moy. “Pratt’s arrest and extradition back to the United States reflects a great collaboration among multiple agencies, both in the United States and Spain who were dedicated to seeking justice for the young women he allegedly victimized. This large, internationally coordinated effort could not have been successful without support from our law enforcement partners in Spain, the U.S. Marshals Service, U.S. Department of Justice, and Immigration and Customs Enforcement.”
According to public court filings, Pratt and his co-defendants used force, fraud, and coercion to recruit hundreds of young adult women – most in their late teens – and at least one minor victim, to appear in GirlsDoPorn videos.
Pratt is accused of recruiting the victims from throughout the United States and Canada using internet advertisements for clothed modeling jobs. Even after the victims were told the gig involved an adult video-shoot, Pratt and his co-defendants convinced the women that their videos would be provided solely to private collectors on DVD in foreign countries, that they would remain anonymous, and that the videos would not be posted on the internet – assurances that Pratt and his co-defendants knew to be false.
Most of the video shoots took place in San Diego – at local hotels and short-term rental units. Although the women were promised that the video shoots would be brief, they often took hours. Once the video productions began, some women were not permitted to leave the shooting locations until the videos were completed; some were threatened with lawsuits or cancelled flights home if they did not complete the videos; and others were allegedly forced to perform certain sex acts, which they had earlier declined to do.
After the victims returned home, still believing that they would remain anonymous, Pratt and his co-defendants posted clips of the videos on heavily trafficked adult film sites, like Pornhub, to funnel traffic to the full-length versions of the videos on his website, GirlsDoPorn. Pratt charged visitors to GirlsDoPorn a subscription fee. The site generated more than $17 million in revenue for Pratt.
Pratt faces 19 felony counts stemming from the operation of GirlsDoPorn. The charges include:
• Fifteen counts of sex trafficking by force, fraud, and coercion;
• Conspiracy to commit sex trafficking by force, fraud, and coercion;
• Production of child pornography;
• Sex trafficking of a minor by force, fraud, and coercion; and
• Conspiracy to commit money laundering.
The U.S. Attorney’s Office in the Southern District of California recognizes the outstanding efforts of the FBI in San Diego; the FBI Legal Attaché in Spain; the U.S. Marshals Service; Spain’s Ministry of Justice; and law enforcement officials in Spain and Portugal; as well as the Justice Department’s Office of International Affairs, for their substantial assistance in securing the arrest and extradition of Pratt.
DEFENDANTS Case Number 19cr4488
Michael James Pratt Age: 36 Unknown
Matthew Isaac Wolfe Age 37 San Diego, CA
Ruben Andre Garcia Age: 31 San Diego, CA
Theodore Gyi Age, 46 Solana Beach, CA
Valorie Moser Age: 37 San Diego, CA
SUMMARY OF CHARGES IN SUPERSEDING INDICTMENT
Count 1
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1594
Maximum Penalty: Life in prison, $250,000 fine.
Counts 2-16
Sex Trafficking by Force, Fraud and Coercion 18 U.S.C. §1591(a) and (b)(1)
Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine.
Count 17
Production of Child Pornography, 18 U.S.C. § 2251(a) and (e)
Minimum penalty: Fifteen years in prison; Maximum penalty: thirty years in prison, $250,000 fine.
Count 18
Sex Trafficking of a Minor and By Force, Fraud and Coercion, 18 U.S.C. § 1591(a)(1), (a)(2), and (c)
Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine.
Count 19
Conspiracy to Launder Monetary Instruments, 18 U.S.C. § 1956(a)(1)(A)(i) and 1956(h).
Civil penalty of the greater of (A) the value of the property, fund or monetary instruments involved in the transaction or (B) $10,000
INVESTIGATING AGENCIES
FBI – Southern District of California and Legal Attaché in Spain
U.S. Marshals Service
U.S. Department of Justice, Office of International Affairs
Spanish National Police
Spain’s Ministry of Justice
Spain’s Ministry of Interior
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Friend and Business Partner of GirlsDoPorn Owner Michael Pratt Sentenced to 14 Years in PrisonRead the Press Release
NEWS RELEASE SUMMARY – March 19, 2024
SAN DIEGO – Matthew Isaac Wolfe was sentenced in federal court today to 14 years in prison for his role in a conspiracy with Michael Pratt, owner of the website GirlsDoPorn, and others, to deceive and coerce young women into appearing in pornographic videos. A restitution hearing is scheduled for May 7, 2024 at 10 a.m.
The conspiracy included recruiting the victims from throughout the United States and Canada using internet advertisements for clothed modeling jobs. Even after the victims learned the gig involved an adult video-shoot, Wolfe admitted to persuading women to appear in the videos by telling them that the videos would never be posted online, that the videos would never be released in the United States, and that no one who knew the women would ever find out about the videos, representations he knew to be false. In truth, the videos were exclusively marketed and distributed on the internet. Not only did Wolfe lie to the women, he also instructed others to do so. Wolfe told co-defendant Theodore Gyi, the cameraman on hundreds of GirlsDoPorn video shoots, that if asked, he should lie to the women and tell them the videos would not be posted on the internet.
Most of the video shoots took place in San Diego – at local hotels and short-term rental units. Although the women were promised that the video shoots would be brief, they often took hours. Once the video productions began, some women were not permitted to leave the shooting locations until the videos were completed; some were threatened with lawsuits or cancelled flights home if they did not complete the videos; and others were allegedly forced to perform certain sex acts, which they had earlier declined to do.
After the victims returned home, still believing that they would remain anonymous, clips of the videos were posted on heavily trafficked adult film sites, like Pornhub, meant to funnel viewers to the full-length versions of the videos on Pratt’s website, GirlsDoPorn. Pratt charged visitors to GirlsDoPorn a subscription fee and generated more than $17 million in revenue.
Wolfe pleaded guilty to the conspiracy on July 26, 2022, admitting he moved to the United States from New Zealand in 2011 to work for Pratt and had a wide range of responsibilities. He filmed approximately 100 videos; uploaded finished videos onto the internet; oversaw the company’s financial books; and operated various business entities that were used to promote the business. Wolfe worked at GirlsDoPorn from 2011 until his arrest in October 2019.
During hearings today and on January 22, 2024, approximately 30 survivors asked a federal judge to impose a significant sentence, describing how the actions of Wolfe and his co-defendants destroyed their lives. Survivors, many of them college students at the time, described answering what they thought were legitimate modeling ads and flying to San Diego for paid modeling gigs, only to be forced to perform sexual acts on camera.
The women spoke of struggling with substance and alcohol abuse, anxiety and depression, suicidal thoughts and attempts, and post-traumatic stress syndrome in the aftermath of their videos going viral. Some spoke of lost relationships with friends and family; others dropped out of school; and others went into hiding.
One of the women said: “I was robbed of my privacy, my dignity, and my peace of mind… But worst of all, I was robbed of my identity. I was once viewed as a beautiful, fun-loving and strong woman who was known for her athleticism and ability to make just about anyone laugh. I was a caring friend and a daughter my parents were proud of. Mr. Wolfe shattered who I was…Today I'm taking my identity back. I am not a victim. I'm a survivor.”
One woman recalled the day she learned that her pornographic video received more than 300 million views on Pornhub, one of the most-visited websites in the world.
“That ad seemed harmless, but it wrecked my entire life. In an instant, the life I had was gone: My hopes gone, my relationships gone, everything was gone…The fall-out from the videos spread to every part of my life like cancer, and that cancer remains to this day, making it virtually impossible for me to start a new life. I lost my modeling career, my college years, my whole twenties, my name, my career path, my friends, and my family. Everything I had built was gone, and so too was my future. Doors that were once opened were slammed in my face…Matthew Wolfe stole my life, and it wasn't just my life. He stole hundreds of lives. What kind of price do you put on a life? Mr. Wolfe deserves a jail sentence that accounts for each and every life he has stolen.”
Another woman told the court: “It's been nearly 3,650 days of living in a tortuous purgatory, but today marks a major milestone in my recovery. Today there's a shift in the winds. Today is the day all the survivors get their voices back. Today is the day we get to be heard.”
Wolfe also admitted he was aware that personal identifying information and social media accounts for some women were being posted on pornwikileaks.com, a site controlled by Pratt and dedicated to “exposing” the true identities of individuals appearing in pornographic videos, causing the victims to be subjected to severe harassment. Even after Wolfe became aware of this, he and others continued to assure prospective models that no one would ever find out about their video shoot or learn their identity.
“We applaud all survivors who courageously speak out in pursuit of justice,” said U.S. Attorney Tara McGrath. “Their voices rang out in the courtroom today, and we stand beside them in holding Mr. Wolfe accountable for the incredible pain and suffering he caused.”
“Matthew Wolfe’s willingness to use deception, coercion and intimidation to exploit young women paints a sordid picture of the lengths some people will go just to make money,” said FBI San Diego Special Agent in Charge Stacey Moy. “Wolfe’s sentencing today, and any past or future sentencings related to this case, are small slivers of justice for the victims, but ultimately don’t fully heal the deep pain spawned by Mr. Wolfe and the other defendants.”
Co-defendant Michael Pratt made his first appearance today after being extradited from Spain following more than three years as an international fugitive. In 2022, Pratt was named to the FBI’s Top Ten Most Wanted list.
Ruben Andre Garcia, the recruiter and male model, was sentenced to 20 years in prison on June 14, 2021. Theodore Gyi was sentenced to four years in prison on November 9, 2022. Valorie Moser, the office manager, is set for sentencing on August 9, 2024.
DEFENDANTS Case Number 19cr4488
Michael James Pratt Age: 36 Unknown
Matthew Isaac Wolfe Age 37 San Diego, CA
Ruben Andre Garcia Age: 31 San Diego, CA
Theodore Gyi Age, 46 Solana Beach, CA
Valorie Moser Age: 37 San Diego, CA
CHARGES
Count 1
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1594
Maximum Penalty: Life in prison, $250,000 fine.
INVESTIGATING AGENCIES
FBI – Southern District of California
U.S. Marshals Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Man Sentenced to 40 months in prison for Stealing Chief Federal Judge’s Identity and Forging Court DocumentsRead the Press Release
Honolulu, Hawaii – Edmond Abordo of Honolulu was sentenced in federal court today to 40 months for forging the signature of a federal judge in order to trick an elderly woman into paying him thousands of dollars for bogus legal services.
The United States Attorney’s Office for the Southern District of California handled this case after the United States Attorney’s Office for the District of Hawaii was recused.
In November of 2023, Abordo was in the second day of his federal jury trial when he decided to plead guilty to forging the signature of the Chief Judge and using the seal of the United States District Court for the District of Hawaii to create a phony court order. Abordo then used the forged court order to convince the victim that he had used his legal expertise to prevent the foreclosure of her Ewa Beach, Hawaii home.
When Abordo first met the victim, he described himself to her as a “non-licensed attorney” who could help save her home. Abordo—who is not a lawyer and has no legal training—claimed he had expertise on several legal subjects, including mortgages and adverse possession. He convinced the victim to file a federal lawsuit challenging foreclosure of her home. Nearly each time Abordo met with the victim, he demanded a cash payment of $1,000 to $3,000 dollars.
According to the indictment, Abordo ultimately convinced the victim that the federal judge assigned to the lawsuit had awarded her possession of the home, but refused to hand over the court order unless she paid him additional money. In reality, the victim’s home had been lost to foreclosure and the federal lawsuit had been dismissed months earlier. The victim, believing Abordo had a real court order, paid him thousands of dollars in exchange for the forged court order.
Abordo assured the victim that the forged court order was a genuine court document, that the federal judge’s signature on the forged order was genuine, and that the forged court order gave legal possession of the Ewa Beach property to the elderly victim. However, as Abordo then well knew, the forged court order was not genuine, was never issued or signed by the judge, and did not confer any property rights to the victim.
During the hearing, Chief District Court Judge Derrick Watson told the sentencing judge that “nothing is as important to our society as the rule of law. Mr. Abordo’s crimes caused great damage to the integrity of the courts.”
“This defendant had the audacity to not just swindle an elderly victim in the midst of foreclosure, but to forge the signature of a federal judge,” said U.S. Attorney Tara McGrath of the Southern District of California, whose office is handling the recusal case. “The Department of Justice is committed to protecting the integrity of our judicial system.”
“The FBI finds it extremely disconcerting that the defendant preyed on an especially vulnerable kupuna going through personal financial distress involving the loss of their home,” said FBI Special Agent in Charge Steven Merrill. “This sentence shows that we will vigorously and thoroughly investigate cases that target our elderly community. We encourage the public to bring these to our attention by reporting it to ic3.gov.”
DEFENDANT Case Number 22cr00101-BLW-KJN
Edmund Abordo 68 Honolulu, HI
SUMMARY OF CHARGES
Wire Fraud – Title 18 U.S.C., Section 1343
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
Aggravated Identity Theft – Title 18 U.S.C., Section 1028A(a)(1)
Maximum Penalty: A mandatory minimum of two years in prison, consecutive to underlying count
AGENCIES
Federal Bureau of Investigation
Father and Son Duo Sentenced to Prison in $21 Million Dollar Medicare SchemeRead the Press Release
NEWS RELEASE SUMMARY – March 11, 2024
SAN DIEGO – Anthony Duane Bell Sr. and his son, Anthony Duane Bell Jr., were sentenced in federal court today to 65 months and 12 months and one day, respectively, for their roles in fraudulently receiving more than $21 million in Medicare payments and lying to cover it up.
The pair, along with others, conspired to commit Medicare fraud by billing for medically-unnecessary durable medical equipment such as knee, ankle, shoulder, wrist and back braces. Bell Sr. pleaded guilty to Medicare fraud while Bell Jr. pleaded guilty to making false statements to a federal officer.
U.S. District Court Judge William Q. Hayes also ordered Bell Sr. to pay $21,725,604.56 in restitution to Medicare and forfeit $806,375.12 and a luxury house in El Cajon. The forfeited property was purchased using money obtained from the fraud. In arriving at the sentence, Judge Hayes found that Bell Sr. intended to defraud Medicare of over $46 million dollars and received over $21 million dollars.
“This brazen scheme exploited elderly and disabled Medicare beneficiaries so these defendants could line their own pockets,” said U.S. Attorney Tara K. McGrath. “Together with our law enforcement partners, this office will continue to vigorously investigate and prosecute fraud that diverts Medicare funds from some of our nation’s most vulnerable citizens.”
“Those who game the system to take advantage of federal health care programs for personal financial gain do so at the expense of those who rely on these programs and American taxpayers,” said Special Agent in Charge Timothy B. DeFrancesca of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “Together with our law enforcement partners, HHS-OIG will continue working diligently to hold these individuals accountable.”
“The Bells using their business as a front to defraud the U.S. government and Medicare program is unacceptable,” said FBI San Diego Acting Special Agent in Charge Tom Ryan. “The FBI and its law enforcement partners will continue to dedicate their resources to make sure individuals who try to illegally profit from the U.S. government will be prosecuted.”
According to court records, the Bells created companies known as Universal Medical Solutions 1 and Universal Medical Solutions 2, which supplied durable medical equipment. In order to find customers for their businesses, the Bells entered into sham agreements with “marketing” companies that, instead of marketing, provided packets of information about Medicare beneficiaries for $125 to $350 each. These packets of information included a Medicare beneficiary’s personal information, medical history, Medicare number, and an audio recording between a call center and the patient, in which the patient supposedly agreed to accept a brace. The packet also included a signed prescription from a doctor, obtained via telemedicine, claiming that the brace was medically necessary for the patient – although in almost all cases the prescription was signed by a physician who had no previous doctor-patient relationship with the patient, was often in another state, and at most had conducted an audio call with the patient. In all cases the doctor had not conducted any kind of physical examination of the patient.
The Bells bought thousands of these patient packets, each time indirectly paying the telemedicine doctors through the “marketing” companies. The packets were referred to in the industry as “Doctor’s Orders” or “D.O.s.” The Bells purchased the “D.O.s” for a variety of braces, paying the most (up to $350) for a back brace prescription, the type of medical equipment for which Medicare offered the highest reimbursement. The Bells could then, after shipping the brace to the patient, bill Medicare around $1,359.89 for each back brace, through their companies. The Bells also bought other braces, including wrist, knee, and shoulder braces, and billed Medicare at much higher prices than they paid for them.
When Bell Jr. was interviewed by the FBI, he lied about his knowledge of the scheme.
The case is being prosecuted by Assistant U.S. Attorneys Valerie H. Chu and Christopher M. Alexander of the Southern District of California.
DEFENDANTS Criminal Case No. 20CR2887-WQ
Anthony Duane Bell Sr. Age: 55 El Cajon, California
Anthony Duane Bell Jr. Age: 33 El Cajon, California
SUMMARY OF CHARGE
Health Care Fraud, a felony, in violation of Title 18, United States Code, Section 1347.
Maximum Penalty: Ten years in custody; a fine of $250,000; a mandatory special assessment of $100; an order of restitution; and a three-year term of supervised release.
False Statement, a felony, in violation of Title 18, United States Code, Section 1001.
Maximum Penalty: Five years in custody; a fine of $250,000; a mandatory special assessment of $100; an order of restitution; and a three-year term of supervised release.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Department of Health and Human Services, Office of Inspector General
United States Marshal’s Service
Former Navy Civilian Employee and Former Executive Indicted in Bribery Scheme Involving over $100 Million in Government ContractsRead the Press Release
NEWS RELEASE SUMMARY – March 7, 2024
SAN DIEGO – A former civilian employee of San Diego-based Naval Information Warfare Center and a former executive with a South Carolina defense contractor were charged in an indictment unsealed today with participating in a bribery scheme to trade expensive meals, jobs and a ticket to a premiere sporting event for help obtaining more than $100 million in government contracts.
According to the indictment, James Soriano, of Las Vegas, Nevada, worked for the Naval Information Warfare Center, which provided contract administration services for the Navy. From 2006 to 2019, Soriano was an engineer, project leader and certified “Contracting Officer Representative” with technological expertise to help manage Department of Defense contracts. Soriano was supposed to act as liaison between the government and the contractor, including keeping contractor bid, proposal and selection information confidential, and protecting the integrity of the acquisition process by maintaining fairness in the government’s treatment of all bidders.
According to the indictment, Soriano instead used his considerable influence to steer lucrative contracts to Russell Thurston of Mt. Pleasant, South Carolina, who was an executive vice president of a company vying for defense contracts with locations in Arlington, Virginia, and Charleston, South Carolina. The company provided technical and consulting services in the information technology field.
The indictment said Thurston, and others working under him, gave Soriano various things of value including jobs for a family member and friends, free meals at various restaurants, as well as a ticket to the 2018 MLB All Star Game held at Nationals Park in Washington, D.C. One of the friends who was given a job at Soriano’s request gave Soriano half her salary every month—approximately $2,000 per month—in cash. The indictment indicates the friend was not actually performing the duties for which she was being paid.
In return, Soriano took official action to benefit the company, including allowing Thurston and other employees to draft procurement documents for various contracting efforts, even where the company was competing for the contract against other bidders. As a result of Soriano’s efforts, the company won a task order with a more than $300 million ceiling. Soriano then approved numerous projects on this task order, ultimately causing the government to obligate more than $100 million to the company.
To conceal their activities, Thurston, Soriano, and other employees at the company would intentionally delete document properties on procurement documents drafted by employees. Soriano also failed to disclose the gifts on his yearly required OGE Form 450.
“This indictment reveals callous greed at the cost of taxpayer dollars,” said U.S. Attorney Tara McGrath. “This office will vigorously investigate and prosecute fraud that threatens public trust in our institutions.”
“The indictment of James Soriano and Russell Thurston should be a deterrent for individuals and companies contemplating or attempting to misuse positions of public trust in order to enrich themselves financially or ensure future lucrative contracts,” said Bryan D. Denny, Special Agent-in-Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Western Field Office. “The alleged actions subvert the integrity of the government’s acquisition process, waste taxpayers’ money, and ultimately degrade the readiness of America’s warfighters.”
“The DoD contracting process ensures our taxpayer dollars are spent appropriately to equip our warfighters with the tools necessary to fight and win in an ever-increasingly complex environment. Attempts to undermine that process ultimately put our warfighters at risk,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation. “This most recent indictment against Mr. Soriano and Mr. Thurston is demonstrative of IRS Criminal Investigation’s relentless commitment to supporting national security through partnering on corruption investigations while continuing to pursue those who intentionally evade paying their fair share in taxes, whether their income is legally or illegally obtained.”
“Using a position of public trust as a means to fraudulently grant access to federal programs for personal gain will not be tolerated,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “Our Office will remain relentless in the pursuit of fraudsters who seek to exploit SBA’s vital economic programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”
Soriano is also charged with three counts of filing false tax returns as result of failing to declare the cash that he was receiving from his friend as income.
DEFENDANTS Case Number 24cr0341-TWR
James Soriano Age: 63 Las Vegas, NV
Russell Thurston Age: 51 Mt. Pleasant, SC
SUMMARY OF CHARGES
Conspiracy to Commit Bribery - Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison; $250,000 fine
Bribery – Title 18, U.S.C., Section 201
Maximum penalty: Fifteen years in prison; $250,000 fine for an individual or $500,000 for an organization, or three times the monetary equivalent of the thing of value, whichever is greater.
Fraud and False Statement in Tax Return – Title 26, U.S.C., Section 7206(1)
Maximum penalty: Three years in prison; $100,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Small Business Administration – Office of Inspector General
IRS Criminal Investigation
Department of Health and Human Services – Office of Inspector General
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.
Two Men Charged with Murdering Witnesses and Burying Their Remains to Thwart Investigation of Drug Trafficking OrganizationRead the Press Release
NEWS RELEASE SUMMARY – March 5, 2024
SAN DIEGO – A superseding indictment was partially unsealed in the Southern District of California today charging Benjamin Madrigal-Birrueta, an alleged drug trafficker, with murdering two people to prevent them from testifying in drug trafficking prosecutions that were pending in federal court in San Diego.
The victims were identified as Cesar Armando Murillo, 44, and Maira Sofia Hernandez, 33, residents of Yakima, Washington. Court filings indicate Hernandez was six-months pregnant when she was killed, and the superseding indictment includes a separate count charging Madrigal-Birrueta with the death of her in utero child.
“These executions were an assault on our justice system, designed to silence witnesses and instill fear,” said U.S. Attorney Tara McGrath. “The obligation to protect witnesses is paramount and the United States will fully prosecute intimidation and violence designed to interfere with the justice system.”
“The cartels and drug trafficking organizations have reached beyond our borders, bringing their criminality to every city and small town in our interior,” said Special Agent in Charge Robert Hammer, who oversees HSI operations in the Pacific Northwest. “The murder of witnesses is an afront to our rule of law but HSI, along with our law enforcement partners, have the resources to uncover these horrible crimes and the dedication to dismantle the organizations harming our population, wherever they may be located.”
“HSI continues to tirelessly investigate criminal organizations who traffic dangerous drugs across our border and into the interior of the United States. In this pursuit we will ensure that anyone who is responsible for causing harm to a witness in one of our investigations is held accountable for these actions,” said HSI San Diego SAC Chad Plantz. “Fear or harm caused to those who report a crime or testify diminishes the public’s trust in the criminal justice system and erodes the foundation of the rule of law. HSI and its partners are committed to ensuring that anyone who tampers with witnesses or breaks the laws in place to protect them are brought to justice.”
The superseding indictment also charges Ricardo Orizaba with being an accessory after the fact to murder. Court filings indicate both victims were buried in a remote high-desert location near Yakima and that these charges follow a year-long search culminating in the discovery of their remains in September 2023. Hernandez is survived by her three minor children and Murillo is survived by two minor children.
The superseding indictment alleges Defendant Madrigal-Birrueta was a leader in a criminal enterprise that committed a series of felony violations of federal drug laws. According to court filings, the investigation originated with the seizure of drugs from vehicles using San Diego area ports of entry between August and October of 2021. The organization used late model stolen vehicles to smuggle drugs. The superseding indictment alleges that Madrigal-Birrueta is responsible for the importation of those drugs.
According to court filings, by August of 2022, the investigation led agents to a group of individuals operating out of Yakima. Special Agents with Homeland Security Investigations interviewed Murillo and Hernandez, and within days of those interviews, Murillo and Hernandez were murdered and their bodies were buried in the high desert. Court filings describe how these charges follow an exhaustive, year-long investigation that employed geophysicists, ground penetrating radar, aircraft, laser imaging, chemical testing of the soil, numerous cadaver dogs, and other law enforcement techniques to search for the victims’ remains. HSI Special Agents successfully recovered the remains on September 13, 2023, aided by a Washington State Police Crime Scene Investigations team.
Special Agents with Homeland Security Investigations working with Washington State Police to exhume remains on September 13, 2023.
Court filings further indicate that, based on autopsy reports, both victims died of multiple gunshot wounds to the head.
During the investigation agents seized methamphetamine, cocaine, fentanyl, multiple firearms — including a machine gun — and body armor from Madrigal-Birrueta’s drug trafficking organization. In addition to the homicides, the superseding indictment charges Madrigal-Birrueta with possessing a machine gun in furtherance of a drug trafficking crime.
Federal courts in California and Washington state have ordered that Madrigal-Birrueta and Orizaba be detained pending trial, and both are in custody.
Weapons seized during the investigation on September 8, 2022.
This case is being prosecuted by Assistant U.S. Attorneys Stephen H. Wong and Alicia P. Williams.
DEFENDANTS Case Number 23cr1684-RBM
Benjamin Madrigal-Birrueta Age: 22 Yakima, WA
Ricardo Orizaba Age: 21 Yakima, WA
SUMMARY OF CHARGES
Count 1:
Continuing Criminal Enterprise – Title 21, United States Code, Sections 848(a) and (b)(2)
Maximum penalty: Mandatory minimum twenty years and up to life in prison, $2 million fine
Count 2:
Conspiracy to Distribute Controlled Substances – Title 21, United States Code, Sections 841 and 846
Maximum penalty: Mandatory minimum ten years and up to life in prison, $2 million fine
Count 3:
Conspiracy to Import Controlled Substances – Title 21, United States Code, Sections 952, 960 and 963
Maximum penalty: Mandatory minimum ten years and up to life in prison, $2 million fine
Count 4:
Murder of Cesar Armando Murillo in Furtherance of a Drug Trafficking Conspiracy – Title 21, United States Code, Section 848(e)
Maximum penalty: Mandatory minimum sentence of twenty years and up to life, or death
Count 5:
Murder of Maira Sophia Hernandez in Furtherance of a Drug Trafficking Conspiracy – Title 21, United States Code, Section 848(e)
Maximum penalty: Mandatory minimum twenty years and up to life, or death
Count 6:
Conspiracy to Commit Witness Tampering: First Degree Murder – Title 18, United States Code, Sections 1512(a)(1)(A), (c), (2)(A), (3)(A), (c), (k), and 1111
Maximum penalty: Mandatory minimum term of life in prison or death, $250,000 fine
Count 7:
Witness Tampering: First Degree Murder of Cesar Armando Murillo – Title 18, United States Code, Sections 1512(a)(1)(A), (c), (3)(A), (c), (3)(A), and 1111
Maximum penalty: Mandatory minimum term of life in prison or death, $250,000 fine
Count 8:
Witness Tampering: First Degree Murder of Maira Sophia Hernandez – Title 18, United States Code, Sections 1512(a)(1)(A), (c), (3)(A), (c), (3)(A), and 1111
Maximum penalty: Mandatory minimum life in prison or death, $250,000 fine
Count 9:
Causing the Death of a Child in Utero – Title 18, United States Code, Sections 1841 and 1111.
Maximum penalty: Mandatory minimum life in prison or death, $250,000 fine
Count 10:
Witness Tampering: Threat of Force – Title 18, United States Code, Sections 1512(a)(2)(A), (C), (3)(A), and 1111
Maximum penalty: Up to twenty years in prison, $250,000 fine
Count 11:
Accessory After the Fact to Murder – Title 18 United States Code, Sections 3 and 1512(a)(1)(A) and Title 21, United States Code, Section 848(e), $250,000 fine
Count 12:
Possession, Brandishing, and Discharge of a Firearm in Furtherance of a Drug Trafficking Crime and a Crime of Violence – Title 18, United States Code, Sections 924(c)(1)(A)(iii) and 2, $250,000 fine
Count 13:
Possession and Brandishing of a Firearm in Furtherance of a Drug Trafficking Crime and a Crime of Violence – Title 18, United States Code, Sections 924(c)(1)(A)(iii) and 2, $250,000 fine
Count 14:
Possession, Brandishing, and Discharge of a Firearm in Furtherance of a Drug Trafficking Crime and a Crime of Violence – Title 18, United States Code, Sections 924(c)(1)(A)(iii) and 2, $250,000 fine
Count 15:
Possession of a Firearm in Furtherance of a Drug Trafficking Crime – Title 18, United States Code, Sections 924(c)(1)(A)(iii) and 2, $250,000 fine
Count 16:
Possession of a Machine Gun in Furtherance of a Drug Trafficking Crime – Title 18, United States Code, Sections 924(c)(1)(A)(i), (B)(ii), and 2 and Title 26, United States Code, Section 5845(b), $250,000 fine
Count 17:
Conspiracy to Commit Money Laundering – Title 18, United States Code, Section 1956(a)(1)(A)(i) and (h), $250,000 fine
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Federal Bureau of Investigation
Bureau of Alcohol, Tobacco, Firearms and Explosives
Washington State Police
California Highway Patrol
Yakima Police Department
Tulare County Sheriff’s Office
Visalia Police Department
Fresno Sheriff’s Office
Fresno Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Man is First in Nation to be Charged with Smuggling Potent Greenhouse Gases into the United StatesRead the Press Release
NEWS RELEASE SUMMARY – March 4, 2024
SAN DIEGO – Michael Hart of San Diego was arrested early today and charged with smuggling potent greenhouse gases into the United States from Mexico and then selling them for profit, in violation of regulations intended to curb the use of greenhouse gases and slow climate change. (Video short)
This is the first prosecution in the United States to include charges related to the American Innovation and Manufacturing Act of 2020 (AIM Act). The AIM Act prohibits the importation of hydrofluorocarbons (HFCs), commonly used as refrigerants, without allowances issued by the Environmental Protection Agency (EPA).
“This office is at the forefront of environmental prosecutions, and today is a significant milestone for our country,” said U.S. Attorney Tara McGrath. “This is the first time the Department of Justice is prosecuting someone for illegally importing greenhouse gases, and it will not be the last. We are using every means possible to protect our planet from the harm caused by toxic pollutants, including bringing criminal charges.”
“It is illegal to import certain refrigerants into the United States because of their documented and significantly greater contribution to climate change,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “We are committed to enforcing the AIM Act and other laws that seek to prevent environmental harm.”
“The illegal smuggling of hydrofluorocarbons, a highly potent greenhouse gas, undermines international efforts to combat climate change under the Kigali Amendment to the Montreal Protocol,” said David M. Uhlmann, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. “Anyone who seeks to profit from illegal actions that worsen climate change must be held accountable. This arrest highlights the significance of EPA’s climate enforcement initiative and our efforts to prevent refrigerants that are climate super pollutants from illegally entering the United States.”
“This case and subsequent arrest is a great example of multiple agencies collaborating to arrest an individual who allegedly smuggled illegal goods into the U.S. that harm our environment,” said Chad Plantz, special agent in charge for HSI San Diego. “We remain committed to keep these dangerous toxins from depleting our ozone.”
Hart made his first appearance in federal court this afternoon. The defendant was arraigned and entered a not-guilty plea. His next hearing is before U.S. District Judge Jeffrey T. Miller for motion hearing/trial setting on March 25, 2024, at 11 a.m.
According to the EPA, HFCs are potent greenhouse gases that cause climate change and are used in applications such as refrigeration, air-conditioning, building insulation, fire extinguishing systems, and aerosols. The global warming potential (GWP) of an HFC can be hundreds to thousands of times more potent than carbon dioxide. The use of HFCs has been rapidly increasing worldwide due to the global phaseout of ozone-depleting substances (ODS) and increased demand for refrigeration and air conditioning.
The indictment alleges that Hart purchased refrigerants in Mexico and smuggled them into the United States in his vehicle, concealed under a tarp and tools. According to the indictment, Hart posted the refrigerants for sale on OfferUp, Facebook Marketplace and other sites, and sold them for a profit. In addition to greenhouse gases, the indictment alleges Hart imported HCFC 22, an ozone-depleting substance regulated under the Clean Air Act.
The Montreal Protocol on Substances that Deplete the Ozone Layer (“Montreal Protocol”) is a treaty adopted in 1987 and ratified by virtually every country. The Montreal Protocol required the gradual phase out of ozone depleting substances, with different timetables for developed countries like the United States, and developing countries like Mexico. In the United States, the Montreal Protocol was implemented in 1990 by an addition to the Clean Air Act, which covers Stratospheric Ozone Protection. That addition identified HCFC 22 as a regulated ozone depleting substance. Before 2020, EPA regulations that governed ozone-depleting substances made it illegal for anyone to import a regulated ozone-depleting substance in an amount exceeding that individual’s consumption allowance, subject to certain exceptions. On January 1, 2020, consumption allowances for HCFC 22 were eliminated and it became illegal to import HCFC 22 for any purpose other than for use in a process resulting in their transformation or their destruction.
The Kigali Amendment to the Montreal Protocol is another international agreement designed to phase down the production and consumption of greenhouse gases such as HFCs, which are commonly used alternatives to ozone-depleting substances and are already controlled under the Montreal Protocol. The Kigali Amendment seeks to phase down the production and consumption of HFCs by 80 to 85 percent by 2047. The AIM Act authorized the EPA to phase down the production and consumption of HFCs in a stepwise manner. As part of the AIM Act, Congress added an additional list of regulated substances, which include HFC 32, HFC-125, HFC-134, HFC-134a, HFC 143 and HFC 143a. Refrigerants marketed as HFC 404a, 407a, 407c and 410a contain these regulated substances. The listed HFCs are some of the most commonly used HFCs and all are saturated, meaning they have only a single bond between their atoms and therefore have longer atmospheric lifetimes. Beginning on January 1, 2022, EPA regulations prohibit any person from importing bulk regulated HFCs, except by expending, at the time of import, a consumption or application-specific allowance issued by the EPA. No person may sell or distribute, or offer for sale or distribution, any regulated HFC that was imported illegally.
This case is being prosecuted by Assistant U.S. Attorney Melanie K. Pierson and Department of Justice Environmental Crimes Section Senior Trial Attorney Stephen DaPonte.
DEFENDANT Case Number 24cr0383
Michael Hart Age: 58 San Diego, CA
SUMMARY OF CHARGES
Count 1
Conspiracy – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
Counts 2-6
Importation Contrary to Law – Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
Counts 7-13
Sale of Merchandise Imported Contrary to Law – Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
Criminal Forfeiture – Title 18, U.S.C., Sections 545 and 982
INVESTIGATING AGENCIES
U.S. Environmental Protection Agency, Criminal Investigation Division;
Homeland Security Investigations
*The charges and allegations contained in an indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty
San Diego Man Sentenced to 41 months for Bank, Tax Fraud SchemesRead the Press Release
NEWS RELEASE SUMMARY – March 1, 2024
SAN DIEGO – Alvin Pates of San Diego was sentenced in federal court today to 41 months in prison for participating in a scheme to deceive banks by using straw borrowers and bogus financial information to obtain loans.
According to his plea agreement, beginning as early as July 2014 and continuing through at least April 2020, Pates admitted that he used the names, social security numbers, and credit of the straw borrowers to obtain loans and lines of credit that primarily benefited Pates.
At Pates’ behest, straw borrowers submitted false documentation provided by Pates showing they earned six-figure annual incomes from shell companies operated by Pates. Pates provided the straw borrowers with addresses and phone numbers for the shell companies, where Pates or others acting at his direction confirmed the false employment and income information when contacted by the financial institutions. Pates himself sometimes contacted the banks, pretending to be the straw borrowers, in order to ensure the straw borrowers could pass the security questions asked by the lenders.
Pates acknowledged in his plea agreement that he funneled the majority of the loan proceeds through the bank accounts of one of his shell companies to use for his personal benefit. For example, Pates admitted to using the funds for numerous personal transactions, cash withdrawals, personal living expenses for himself and his family, and to make payments to other credit unions. According to sentencing documents, during six years of the scheme, Pates supported his lifestyle, which included a penthouse apartment, a Corvette, a Mercedes, and a BMW, solely with the proceeds of his fraudulent schemes. In the midst of the scheme, Pates sent a message to one of his assistants, stating that “money is raining.”
According to sentencing documents, Pates recruited many of the straw borrowers from his church. The church members trusted Pates because he possessed an outward façade of morality and wealth. The straw borrowers believed they were starting a business with Pates, and willingly gave Pates 90 percent of the fraudulent loan proceeds as what they thought was their capital contribution. Pates promised the borrowers that he and his company would make all the loan payments. Pates did make the initial loan payments, using funds obtained from other fraudulent loans, only to default on the loans a few months later, ruining the credit and finances of the straw borrowers. Most of the borrowers were unable to pay off the loans; some filed for bankruptcy as a result.
After a number of church members had been financially damaged, Pates began attending another church, continuing the scheme using the name “Al Noble.” At today’s hearing, Pates was ordered to pay restitution of $45,500 to one individual who repaid the fraudulent loans.
In addition to the bank fraud, Pates also admitted to assisting in the preparation of false tax returns for two taxpayers for the calendar year 2015. The tax return for one of the taxpayers falsely stated that the individual received “Other Income” in the amount of $538,462 and paid federal income taxes of $543,643, thus entitling him to a refund of $376,260. Pates supplied false Forms 1099 to the taxpayer to support the return and accompanied the taxpayer to the IRS to submit the false return. The Internal Revenue Service issued a refund check to the taxpayer for $376,260, which was ultimately returned to the IRS.
“This case is especially egregious because Mr. Pates didn’t just rely on the faith of his fellow churchgoers, he preyed on it,” said U.S. Attorney Tara McGrath. “But the direct victims are not the only ones who were hurt; we all pay a price for bank and tax fraud when those costs are passed on.”
“Mr. Pates defrauded not only multiple financial institutions, but also his fellow Americans through these criminal schemes, for which he will now be held accountable,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Following the money is our specialty and, especially when we combine our expertise with our federal partners, our investigations lead to convictions.”
“This arrest and sentencing are the culmination of hard work by numerous local, state, and federal law enforcement agencies over the course of several years. The Secret Service will continue to investigate and pursue justice against those criminal networks who target the citizens of Southern California,” said Jason Reynolds, Special Agent in Charge with the San Diego Field Office of the United States Secret Service.
This case was prosecuted by Assistant U.S. Attorneys Melanie K. Pierson and Loren G. Rene.
DEFENDANT Case Number 20CR2204-CAB
Alvin Pates Age: 54 San Diego, CA
a.k.a. Al Noble
SUMMARY OF CHARGES
Bank Fraud – Title 18, U.S.C., Sections 1344(1) and 2
Maximum penalty: Thirty years in prison, $1 million fine, forfeiture and restitution
Aiding and Advising Preparation of a False Tax Return—Title 26, U.S.C., Section 7206(2)
Maximum penalty: Three years in prison, $250,000 fine, forfeiture and restitution
AGENCIES
U.S. Secret Service
IRS Criminal Investigation
Husband and Wife Sentenced for Defrauding TRICARE and Medicare out of $75 MillionRead the Press Release
NEWS RELEASE SUMMARY – March 1, 2024
SAN DIEGO – Charles Ronald Green Jr. and his wife, Melinda Elizabeth Green, were sentenced in federal court today to 27 months each for fraudulently billing government healthcare programs more than $125 million for medically unnecessary treatments.
According to court filings, the Greens engaged in a scheme to defraud two major federal health care programs: TRICARE, the medical benefits program for military servicemembers and their families, and Medicare, the program that provides benefits to elderly or disabled Americans.
Chief U.S. District Judge Dana M. Sabraw also ordered $4.5 million in restitution to TRICARE and $69,915,909.69 to Medicare.
Between May 12, 2014, and June 29, 2015, the Greens conspired to submit false and fraudulent claims to TRICARE for expensive and medically unnecessary pain creams, scar creams and multi-vitamins (collectively, “compounded medications”), which were billed through various pharmacies. During this period, the Greens owned or were officers of several companies they used in furtherance of their scheme. The pharmacies paid these companies millions of dollars in illegal kickbacks and other remuneration in exchange for the referral of the false and fraudulent prescriptions for compounded medications to TRICARE beneficiaries.
In turn, the Greens and others paid a portion of their profits as kickbacks to so-called “marketing” organizations in exchange for more prescriptions for compounded medications. TRICARE and other payers often reimbursed compounding pharmacies thousands of dollars for a 30-day supply of a compounded pain or scar cream for one beneficiary. In just one example, on May 8, 2015, a false and fraudulent claim was submitted to TRICARE in the amount of $14,178 for Baclofen Powder.
In furtherance of the compounding fraud scheme, the Greens and others developed compounded medication formulations for the primary purpose of inflating the amount of money TRICARE would reimburse, and to correspondingly increase the amount of kickbacks and remuneration that affiliated marketers would receive.
The Greens’ knowing participation in the compounding fraud scheme resulted in the submission of false and fraudulent claims by one pharmacy in the approximate amount of $8,107,816, of which TRICARE paid at least $6,776,222.
Between June 1, 2018, and April 2019, the Greens also conspired to defraud Medicare by submitting false and fraudulent claims for expensive durable medical equipment, or “DME,” similarly induced through a system of illegal kickbacks. The Greens and others executed the DME fraud scheme by purchasing “completed doctors’ orders” from various “marketers” for Medicare beneficiaries, which included a prescription signed by a doctor certifying the beneficiary received an exam that met Medicare’s requirements and that the DME was medically necessary.
In an attempt to disguise the DME fraud scheme from detection, the Greens and their co-conspirators entered into sham “marketing” and other contracts that concealed the pay-per-order arrangement. For example, on March 14, 2019, Charles Ronald Green prepared and submitted an invoice from the Greens’ company, NHS Pharma, concealing that NHS Pharma was being paid a per-brace kickback for selling completed doctors’ orders, but claimed instead to be charging for a $35,000 “TV Campaign,” a quantity of 716 website “Landing Pages,” and $6,928.71 for processing hours.
In addition to purchasing doctors’ orders in furtherance of making false and fraudulent claims on behalf of DME companies they owned or controlled, in some instances the Greens brokered the doctors’ orders by re-selling them at a markup to other DME companies.
“Fraud schemes like this one drive up health care costs for everyone,” said U.S. Attorney Tara McGrath. “We will continue to investigate and bring to justice those who scam taxpayers and place their own financial interests ahead of patient care. Diverting resources from service members and the elderly is especially heinous.”
“The Greens’ greed cost American taxpayers tens of millions of dollars by defrauding federal healthcare programs, including the Department of Defense’s TRICARE program,” said Bryan D. Denny, Special Agent in Charge of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS and its partners will always aggressively investigate those who conspire to defraud TRICARE, because those deceptive actions ultimately harm those defending our country and their families.”
“It is disheartening when people like the Greens go to great lengths to plan elaborate schemes that ultimately have negative effects on innocent citizens,” said FBI San Diego Special Agent in Charge Stacey Moy. “The FBI and its law enforcement partners will ensure that those who defraud the United States Government will be thoroughly investigated and prosecuted for their actions.”
The Court set a hearing for May 24, 2024, to resolve additional claims for restitution.
This case is being prosecuted by Assistant U.S. Attorney Valerie H. Chu.
DEFENDANTS Case Number 20cr1566-DMS
Melinda Elizabeth Green Age: 63 Windermere, FL
Charles Ronald Green, Jr. Age: 67 Windermere, FL
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
Health Care Fraud – Title 18, U.S.C., Section 1347
Maximum penalty: Ten years in prison and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Health and Human Services Office of the Inspector General
Department of Defense Office of the Inspector General
Alleged Mastermind of $5 Million Unemployment Fraud Scheme Extradited from RomaniaRead the Press Release
NEWS RELEASE SUMMARY – February 23, 2024
SAN DIEGO – David Constantin, alleged mastermind of a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic, appeared in federal court today following his extradition Monday to the United States from Romania.
At today’s hearing, U.S. Magistrate Judge Michael S. Berg ordered Constantin detained pending trial. The next hearing is scheduled for April 1, 2024, at 1:30 p.m. before U.S. District Judge Larry A. Burns.
Constantin was indicted by a federal grand jury in October 2023 along with 13 others. In addition to the four counts of wire fraud conspiracy and wire fraud charges, the indictment also alleges that Constantin transmitted more than $128,000 in fraud proceeds to associates in Romania.
Constantin was apprehended by Romanian authorities at the request of the United States on November 14, 2023. The United States also seized valuable assets connected to Constantin, and co-Defendants in this case, Eduard Buse (D6), and Florentina Sima (D7).
The following agencies provided critical assistance in securing Constantin’s arrest and extradition: Directorate for Combating Organized Crime (DCCO) - Service for Countering of Organized Criminal Groups; Pitești Brigade for Combating Organized Crime (BCCO Pitesti); Teleorman County Service for Countering Organized Crime; Romanian Gendarmerie Battalion; Romanian Ministry of Justice; and Romanian Criminal Investigative Directorate - Fugitive Unit.
“We thank Romanian authorities for their assistance in securing Mr. Constantin’s arrest and for their continued efforts in support of this case.”, said U.S. Attorney Tara McGrath.
This case is being prosecuted by Assistant U.S. Attorneys Jessica Adeline Schulberg and Valerie Chu. The Justice Department’s Office of International Affairs provided substantial assistance to secure the arrest and extradition from Romania of Constantin.
DEFENDANT Case Number 23CR2090-LAB
David Constantin Age: 28 Arges County, Romania
aka Vlad Alexandru
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 — Conspiracy to Commit Wire Fraud
Title 18, U.S.C. § 1343 — Wire Fraud
Maximum penalty: Thirty years in prison, $1 million fine
Title 18 U.S.C. § 1956(a)(2)(A) — Laundering of Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
U.S. Department of Labor Office of Inspector General
U.S. Department of Homeland Security
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Santa Barbara Man Charged with Coordinating Maritime Smuggling Attempt Resulting in Three Drowning DeathsRead the Press Release
NEWS RELEASE SUMMARY – February 22, 2024
SAN DIEGO – Charges unsealed today against Faustino Romero De La Cruz allege that he organized the attempted smuggling of multiple unauthorized immigrants by boat on April 10, 2022, which resulted in the tragic drowning deaths of three passengers.
Romero was arrested on February 21, 2024, in Santa Barbara. He made his first appearance in federal court in San Diego this afternoon.
According to court records, on April 10, 2022, human smugglers attempted to transport more than 10 unauthorized immigrants from Mexico into the United States aboard a cuddy-style boat. As the vessel approached the shore near the Ocean Beach Pier, it capsized with all passengers aboard. Despite the best efforts of law enforcement and other emergency response personnel, three victims drowned.
According to court records, Homeland Security agents identified Romero as a U.S.-based coordinator who, working with others, arranged for unauthorized immigrants to be smuggled into the United States by land and sea, and then collected thousands of dollars in smuggling fees before transporting them on to Northern California and elsewhere.
“Too many precious lives are needlessly lost in catastrophic incidents like this one,” said U.S. Attorney Tara McGrath. “Case after case demonstrates that smugglers are more interested in maximizing profits than safety, which all too often leads to tragic results. Never trust your life to a smuggler.”
“Maritime human smuggling has proven time and time again to be incredibly dangerous and often results in senseless claimed lives,” said Chad Plantz, special agent in charge for HSI San Diego. “While transnational criminal organizations seek to enrich themselves using the tactic, HSI is committed to using all means at our disposal to investigate and hold accountable those placing human beings at substantial risk of injury and death.”
This case is being prosecuted by Assistant U.S. Attorney James Miao and Special Assistant U.S. Attorney Joel Doolin.
DEFENDANTS Case Number 23cr2458-JES
Faustino Romero De La Cruz Age: 40 Santa Barbara, CA
SUMMARY OF CHARGES
Count 1: Conspiracy to Bring in Certain Aliens Other Than at Designated Port of Entry Resulting in Death – Title 8, U.S.C., Sec. 1324(a)(1)(A)(i), (v)(I), (a)(1)(B)(iv)
Maximum penalty: Life in prison, and $250,000 fine
Counts 2-4, 6: Attempted Bringing in Aliens for Financial Gain – Title 8, U.S.C., Sec. 1324(a)(2)(B)(ii)
Maximum penalty: Ten years in prison, a $250,000 fine
Count 5: Conspiracy to Bring in Certain Aliens Other Than at
Designated Port of Entry – Title 8, U.S.C., Sec. 1324(a)(1)(A)(i), (v)(I), (a)(1)(B)(i)
Maximum penalty: Ten years in prison, a $250,000 fine
Count 7: Transportation of Certain Aliens – Title 8, U.S.C., Sec. 1324(a)(1)(A)(ii)
Maximum penalty: Five years in prison, a $250,000 fine
INVESTIGATING AGENCIES
Homeland Security Investigations – San Diego Marine Task Force
United States Border Patrol
United States Customs and Border Protection
United States Coast Guard
San Diego County Sheriff’s Department
San Diego Harbor Police Department
San Diego County Medical Examiner’s Office
Homeland Security Investigations
Santa Barbara County Sheriff’s Office
*The charges and allegations contained in an indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Man Arrested for Making Threat to Arizona Election OfficialRead the Press Release
NEWS RELEASE SUMMARY – February 22, 2024
SAN DIEGO – William Hyde of San Diego was arrested in San Diego today for allegedly leaving a voicemail containing a violent threat on the personal cell phone of an election official in the Maricopa County Recorder’s Office in Phoenix, Arizona.
Hyde, 52, is scheduled to make his initial appearance tomorrow at the federal courthouse in San Diego.
According to an indictment unsealed today, on or about November 29, 2022, Hyde allegedly left the following voicemail message on the personal cell phone of the victim election official: “Run, [expletive].” Approximately one minute later, Hyde allegedly left a second voicemail message for the same election official: “You wanna cheat our elections? You wanna screw Americans out of true votes? We’re coming, [expletive]. You’d better [expletive] hide.” This followed a Special Meeting held by the Maricopa County Board of Supervisors a day earlier to certify the election results in Maricopa County for the November 8, 2022, general elections for federal and state officeholders. The election official was present at this Special Meeting, which received nationwide media coverage.
“Intimidation of election officials strikes at the very heart of our democracy,” said United States Attorney for the Southern District of California Tara McGrath. “Even just one case can have a ripple effect. This Office will aggressively prosecute any attempt to intimidate, threaten, or frighten election officials as they engage in these critical duties.”
“As alleged in the indictment, the defendant left threatening messages on a Maricopa County election official’s personal cell phone the day after county officials certified the 2022 election results. The indictment alleges that the defendant accused the official of cheating the election and told the official to ‘run’ and ‘hide,’” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The Criminal Division is committed to aggressively investigating and prosecuting individuals who threaten election officials. We will not tolerate criminal intimidation of those who administer and safeguard our elections.”
“Election integrity starts with protecting those we entrust to administer elections,” said U.S. Attorney Gary M. Restaino for the District of Arizona. “We appreciate the admirable efforts of the Recorder’s Office and Elections Department in Maricopa County to efficiently register Arizonans as eligible voters, and to accurately and transparently tabulate their votes.”
“Individuals who work to ensure the integrity of our elections should not have to worry about their safety while working for the American people,” said Acting Special Agent in Charge TJ Holland of the FBI San Diego Field Office. “We will continue to collaborate with our local, state, and federal law enforcement partners to protect election officials and prosecute anyone who threatens to harm them.”
Hyde is charged with one count of communicating an interstate threat. If convicted, he faces a maximum penalty of five years in prison. The FBI San Diego Field Office investigated the case, with substantial assistance from the FBI Phoenix Field Office.
Assistant U.S. Attorney Seth Askins for the Southern District of California and Trial Attorney Tanya Senanayake of the National Security Division’s Counterterrorism Section are prosecuting the case, with substantial assistance from Assistant U.S. Attorney Mary Sue Feldmeier for the District of Arizona.
This case is part of the Justice Department’s Election Threats Task Force. Announced by Attorney General Merrick B. Garland and launched by Deputy Attorney General Lisa Monaco in June 2021, the task force has led the department’s efforts to address threats of violence against election workers, and to ensure that all election workers – whether elected, appointed, or volunteer – are able to do their jobs free from threats and intimidation. The task force engages with the election community and state and local law enforcement to assess allegations and reports of threats against election workers, and has investigated and prosecuted these matters where appropriate, in partnership with FBI Field Offices and U.S. Attorneys’ Offices throughout the country. A year after its formation, the task force is continuing this work and supporting the U.S. Attorneys’ Offices and FBI Field Offices nationwide as they carry on the critical work that the task force has begun.
Under the leadership of Deputy Attorney General Monaco, the task force is led by the Criminal Division’s Public Integrity Section and includes several other entities within the Justice Department, including the Criminal Division’s Computer Crime and Intellectual Property Section, Civil Rights Division, National Security Division, and FBI, as well as key interagency partners, such as the Department of Homeland Security and U.S. Postal Inspection Service. For more information regarding the Justice Department’s efforts to combat threats against election workers, read the Deputy Attorney General’s memo.
To report suspected threats or violent acts, contact your local FBI office and request to speak with the Election Crimes Coordinator. Contact information for every FBI field office may be found at www.fbi.gov/contact-us/field-offices/. You may also contact the FBI at 1-800-CALL-FBI (225-5324) or file an online complaint at www.tips.fbi.gov. Complaints submitted will be reviewed by the task force and referred for investigation or response accordingly. If someone is in imminent danger or risk of harm, contact 911 or your local police immediately.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
DEFENDANT Case Number 22cr0276-BAS
William Michael Hyde 52 San Diego
SUMMARY OF CHARGES
Interstate Threatening Communication – Title 18, U.S.C., Section 875(c)
Maximum penalty: Five years in prison and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Two Former U.S. Marines and Nurse Practitioner Sentenced in $65 Million TRICARE FraudRead the Press Release
SAN DIEGO – Three members of a massive conspiracy to bilk the military’s healthcare program known as TRICARE out of more than $65 million have been sentenced in federal court.
Former U.S. Marines, Daniel Castro and Jeremy Syto, were sentenced to 21 months and 15 months, respectively; Nurse Practitioner Candace Craven was sentenced to serve three months in home confinement. Castro and Syto recruited fellow Marines to receive expensive compounded drugs; Craven and others wrote bogus prescriptions and filled out fraudulent paperwork to process the insurance reimbursements. All told, tens of millions of dollars in false claims were submitted; everyone got kickbacks.
All of the defendants were working for Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, who quarterbacked the scheme. Two weeks ago, Jimmy Collins received a 10-year prison sentence; Ashley Collins was sentenced to 18 months in home confinement. To account for all the fraud, the couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE.
According to plea agreements, the Marines who Castro and Syto recruited agreed to receive the pricey compounded medications in return for a monthly kickback of approximately $300. For young Marines-turned-straw-beneficiaries, this money significantly augmented their monthly paycheck. One defendant noted “it took very little work to sign people up to receive free money.”
For recruiting bogus patients, Castro and Syto were paid a commission—somewhere between 3 to7 percent of the total TRICARE reimbursement paid to the pharmacy for the drugs sent to their recruits. By the time this fraud scheme was in full swing, the average cost for these compounded drugs was more than $13,000 for a 30-day supply, peaking at around $25,000 for certain individual drugs. Over the course of the conspiracy, the illegal kickbacks amounted to at least $1,013,450.36 for Castro and $264,000 for Syto.
In total, TRICARE paid at least $11,949,710.15 in insurance reimbursements for compounded medications prescribed to straw beneficiaries directly recruited by Castro. During the same period, TRICARE paid at least $8,620,215.83 for compounded medications prescribed to straw beneficiaries directly recruited by Syto.
Nurse Practitioner Craven admitted that her primary role was to write and process fraudulent prescriptions and fill out other fraudulent paperwork for compounded drugs for the straw beneficiaries.
According to the pleadings, the sharp increase in the number of bogus prescriptions for compounded drugs was the result of multiple fraud schemes, including this one, that popped up around the country. As a result, the TRICARE program faced a $2 billion explosion in liability for compounded prescription drugs.
“This outrageous scheme undermined health services for those who risk their lives to serve our country,” said U.S. Attorney Tara McGrath. “Our military members and taxpayers deserve so much better. This case reflects our dedication to the well-being of our armed forces and our steadfast protection of the U.S. taxpayer.”
During the course of the investigation, authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud: an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.
This case was prosecuted by Assistant U.S. Attorney Mark W. Pletcher.
DEFENDANTS Case Number: 18-CR-0432-JLS
Daniel Castro Age: 36 Oak Lawn, IL
Jeremy Syto Age: 30 Chula Vista, CA
DEFENDANTS Case Number: 18-CR-4209-JLS
Candace Michelle Craven Age: 57 Apison, TN
SUMMARY OF CHARGES
Daniel Castro:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $11,949,710.15 to DHA/TRICARE
Jeremy Syto:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $8,620,215.83 to DHA/TRICARE
Candace Craven:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $32,750.00 to DHA/TRICARE
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office
Professional Money Launderer Sentenced to 40 Months in Prison for Transmitting $42 MillionRead the Press Release
SAN DIEGO –Jesus Vazquez Padilla of Tijuana was sentenced in federal court today to 40 months in custody for the unlicensed transmission of more than $42 million of illicit proceeds derived from the sale of drugs across the United States.
According to court records, between January 4, 2016 and May 24, 2019, Vazquez Padilla led the operation of an illegal unlicensed money transmission business by using 22 shell corporations and 85 corporate bank accounts at various U.S. banks to launder drug sale proceeds. Using the corporate bank accounts, Vazquez Padilla and his co-conspirators offered money transmitting services to the public for a fee by performing tasks that included: (1) depositing cash at financial institutions throughout the United States; (2) transferring money by wire, checks, and inter-bank transfers, and (3) transferring money to Mexico on behalf of third parties.
“The complexity of this money laundering operation was remarkable but as it unraveled so did the string of drug proceeds into the coffers of the cartels,” said U.S. Attorney Tara McGrath. “The United States will prosecute not only the drug traffickers, but also the facilitators who cannot out-maneuver justice.”
“Mr. Vasquez Padilla knowingly and willingly subverted laws that protect our financial institutions from becoming unwitting pawns in funding transnational crime and terrorism,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Furthermore, by moving over $42 million in drug money, Mr. Vasquez Padilla and his co-conspirators’ put our sons and daughters at risk of becoming statistics in the drug crisis we face as a country. IRS Criminal Investigation is committed to following the money to bring criminals like Mr. Vasquez Padilla to justice.”
In total, Vazquez Padilla’s business deposited $42,276,668 into the U.S. financial system. Of those deposits, approximately 95 percent of those funds were transferred to third party bank accounts in Mexico. The remaining 5 percent constituted the business’ fee for transmitting the funds.
Under U.S. law, a money transmission business must register with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury; file Currency Transaction Reports and Suspicious Activity Reports; and maintain an effective anti-money laundering compliance program. Vazquez Padilla did not comply with any of these requirements.
On December 5, 2022, Vazquez-Padilla’s co-conspirator, Jose Gonzalez, was sentenced to 30 months’ custody for operating an unlicensed money transmission business and for assisting in the preparation of false tax returns related to the conspiracy. Gonzalez helped Vazquez Padilla open approximately 11 shell corporations and then, to create a veneer of legitimacy, Gonzalez filed federal tax returns on behalf of 10 of the shell corporations in tax years 2016 and 2017. In doing so, Gonzalez invented $19,615,192 in false and fictitious deductions so the shell corporations would not owe taxes.
On December 18, 2023, another co-conspirator, Juan Medina, was sentenced to 12 months and one day in custody for operating an unlicensed money transmission business. Despite knowing the laundered money represented illegal drug proceeds, Medina helped Vazquez Padilla open bank accounts for the shell corporations to enable the money laundering.
Vazquez Padilla’s sister and co-conspirator, Monica Vazquez, remains at large.
Assistant U.S. Attorneys Christopher Beeler and Carl Brooker of the Southern District of California are prosecuting the case.
DEFENDANT Case Number 22-CR-1551-RBM
Jesus Vazquez Padilla Age: 47 Tijuana, Mexico
DEFENDANT Case Number 22-CR-1472-W
Jose Gonzalez Age: 52 San Diego, California
DEFENDANT Case Number 22-CR-1473-RBM
Juan Medina Age: 42 San Diego, California
SUMMARY OF CHARGES
Conspiracy to Operate an Unlicensed Money Transmission Business – Title 18, U.S.C., Sections 371, 1960
Maximum penalty: Five years in prison, $250,000 fine; forfeiture and restitution
AGENCY
Internal Revenue Service Criminal Investigation
Husband and Wife Plead Guilty to $5 Million Unemployment Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – February 15, 2024
SAN DIEGO –Eduard Buse and Florentina Sima pleaded guilty in federal court today to fraud and money laundering charges, admitting they participated in a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic.
Buse and Sima were indicted by a federal grand jury in October 2023 along with 12 others. The indictment alleged that the fraud scheme involved helping hundreds of undeserving applicants apply for benefits using fraudulent documents. In their respective plea agreements, Buse and Sima admitted the fraud resulted in almost $5.2 million in bogus claims paid by the state of California.
“These covid relief funds were meant to provide critical financial relief during the pandemic. Instead, the money was used to buy luxury cars and jewelry,” said U.S. Attorney Tara McGrath. “We will not only continue to prosecute those who diverted money intended to serve as a lifeline, but we will pursue every avenue to recover and return that money to public use.”
“The Covid-19 pandemic placed an enormous financial strain on millions of Americans; however, some individuals decided to use other people’s pain as an opportunity for financial gain,” said FBI San Diego Special Agent in Charge Stacey Moy. “Our pursuit of justice for those affected by fraud during the pandemic will not stop until each and every person who took advantage of individuals during this critical time is prosecuted for defrauding the U.S. government and innocent people.”
“The defendants’ abuse of programs designed to help people in need during and in the wake of the Covid pandemic is particularly despicable,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Even worse, they took money intended to help people keep their heads above water and showered themselves with luxury items. IRS Criminal Investigation is committed to rooting out this sort of evil by following the money to bring people like these defendants to justice.”
According to Buse’s plea agreement, he not only collected $28,350 in undue EDD benefits for himself but also facilitated payouts of $244,050 to 14 co-conspirators, including Sima. Buse then sent $128,902.99 and Sima sent $58,881.53 of fraud proceeds to their associates in Romania through money service businesses.
Buse admitted that he purchased a 2020 BMW X6 for $105,044 in Glendale, California, with proceeds from the fraud and shipped it from San Diego to Romania on April 28, 2023.
On November 13, 2023, Romanian authorities served search warrants on addresses affiliated with Buse at the request of the United States. They seized the BMW with California license plates along with approximately $9,476.50 in U.S. currency; a Rolex Yacht Master II and a rose gold luxury men’s watch purchased for $15,550 U.S. dollars; a Rolex Sky Dweller watch; a Breitling 1884 men’s watch; and a Rolex Oyster Perpetual Date women’s watch.
As part of their plea agreements, Buse and Sima agreed to forfeit the BMW, cash and luxury watches, along with all other property seized in connection with the case.
Buse also agreed to forfeit $128,902.99 and agreed to pay restitution in the amount of $244,050 to the State of California Employment Development Department. Sima agreed to forfeit $58,881.53 and pay the same amount in restitution to the State of California Employment Development Department.
Buse and Sima are scheduled to be sentenced on May 20, 2024, at 9 a.m. before U.S. District Judge Larry A. Burns. This case is being prosecuted by Assistant U.S. Attorneys Jessica Adeline Schulberg and Valerie Chu.
DEFENDANTS Case Number 23CR2090-LAB
Eduard Buse Age: 30 Transient, Romanian
Florentina Sima Age: 29 Transient, Romanian
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 — Conspiracy to Commit Wire Fraud
Title 18, U.S.C. § 1343 — Wire Fraud
Maximum penalty: Thirty years in prison, $1 million fine
Title 18 U.S.C. § 1956(a)(2)(B)(i) — Laundering of Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater
AGENCY
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
U.S. Department of Labor Office of Inspector General
U.S. Department of Homeland Security
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Company and Owners Plead Guilty to Violating the Clean Water ActRead the Press Release
NEWS RELEASE SUMMARY – February 15, 2024
SAN DIEGO – Brothers Robert and Filip Sulc, along with their company Bio-Edge Inc., pleaded guilty in federal court today, admitting they discharged methanol-contaminated wastewater to the sewers at their San Diego-based facility in violation of the Clean Water Act in June of 2023.
Bio-Edge, a company located on Nancy Ridge Drive in San Diego, produced polymeric additives. The company used methanol, both as part of its manufacturing process and to clean glassware.
In violation of both federal pretreatment standards and Bio-Edge’s permit with the City of San Diego, Robert Sulc instructed Bio-Edge employees to collect their methanol-contaminated wastewater, treat it with salt to prevent drain clogs, dilute it with water, and dump the wastewater down the drain into the municipal sewage system.
According to the plea agreements, federal pretreatment standards (40 CFR 403.5(b)(1)) and the permit prohibit the discharge of wastewater that includes pollutants that create a fire or explosion hazard in municipal sewer systems, such as methanol. The federal pretreatment standards (40 CFR 403.6(d)) and the permit further prohibit the use of dilution as a substitute for approved treatment in order to achieve compliance.
Robert Sulc and Bio-Edge, Inc. each pleaded guilty to felony violations of the Clean Water Act. Filip Sulc pleaded guilty to a misdemeanor violation of the Clean Water Act, admitting he acted negligently with respect to the same wastewater discharge.
“Environmental regulations don’t just keep San Diego beautiful; they keep us safe.” said U.S. Attorney Tara McGrath. “We have one planet, and the United States Attorney’s Office will do everything in our power to protect it.”
“The deliberate and routine discharge of a toxic and ignitable chemical into the city of San Diego’s sewer system by Bio-edge, Robert Sulc, and Filip Sulc, posed a risk to the community and the company’s employees,” said Kimberly Bahney, Acting EPA-CID Special Agent in Charge. “Criminal neglect and disregard for Clean Water Act requirements are vigorously prosecuted to ensure protection of human health and the environment.”
Sentencing is scheduled to occur on May 6, 2024, before U.S. District Judge Marilyn L. Huff
This case is being prosecuted by Assistant United States Attorneys Carl Brooker and Melanie Pierson.
DEFENDANTS Case Number 24-cr-00242
Count 1
Robert Sulc Age: 46 San Diego, CA
Bio-Edge, Incorporated
Count 2
Filip Sulc Age: 48 San Diego, CA
SUMMARY OF CHARGES
Count 1: Violation of a Federal Pretreatment Standard – Title 33, U.S.C., Section 1317(d)/1319(c)(2)(A)
Count 1: Maximum penalty as to Robert Sulc: Three years in prison and a fine of not less than $5,000 nor more than $50,000 per day of violation.
Count 1: Maximum penalty as to Bio-Edge Inc.: Five years of probation and a fine of not less than $5,000 nor more than $50,000 per day of violation.
Count 2: Violation of a Federal Pretreatment Standard – Title 33, U.S.C., Section 1317(d)/1319(c)(1)(A)
Count 2: Maximum penalty: One year in prison and a fine of not less than $2,500 nor more than $25,000 per day of violation.
AGENCY
U.S. Environmental Protection Agency
Man Sentenced to 12 Years for Sex Trafficking a 15-Year-Old GirlRead the Press Release
NEWS RELEASE SUMMARY – February 12, 2024
SAN DIEGO – Gabriel Joseph Gonzalez of Pomona, California was sentenced in federal court today to 12 years in prison for sex trafficking a 15-year-old girl in early 2023.
Gonzalez pleaded guilty in July 2023 to one count of sex trafficking of a minor. The victim was a runaway living at a group home in Los Angeles County when Gonzalez began trafficking her. Gonzalez had known the victim since she was 13. He enticed her to leave the group home to engage in commercial sex work for Gonzalez’s financial benefit. He then transported the victim to San Diego and forced her to walk areas known for prostitution on Dalbergia Street in San Diego and Roosevelt Avenue in National City.
During January 2023, Gonzalez forced the victim to engage in commercial sex work every day for seven straight days– except for the victim’s 16th birthday. He allowed her to take that day “off.”
The victim escaped by calling 911. She was rescued by the San Diego Police Department on January 26, 2023, and the case was turned over to the San Diego Human Trafficking Task Force.
Even after entering a guilty plea in July 2023, Gonzalez attempted to continue to traffic the victim while in custody through jail calls. U.S. District Judge Larry Alan Burns pronounced the 12-year sentence, noting Gonzalez’s “absolute lack of remorse” in his conduct while in custody and his continued victimization of the minor.
“The victim’s courage to call 911 in this case was extraordinary,” said U.S. Attorney Tara McGrath. “Her trust in law enforcement demonstrated that when someone reports abuse, the public servants in this community are all hands on deck to bring abusers to justice.”
“Human trafficking and sexual exploitation of a minor is inexcusable,” said Attorney General Rob Bonta. “At the California Department of Justice, we are fighting to hold perpetrators accountable and help survivors get a fresh start. I’m thankful to all our partners for their collaboration in the California DOJ-led San Diego Human Trafficking Task Force. I’m proud of our office’s work to help uplift vulnerable Californians. When we work together, we get results.”
“The vital work being done by local and federal partners on the Human Trafficking Task Force to combat sex trafficking cannot be quantified,” said FBI San Diego Special Agent in Charge Stacey Moy. “The violence or coercion that is committed against sex trafficking victims can have a lasting negative impact on the victim, their families, and the community for years to come.”
If you are living or working under threat of violence or extortion, or you suspect someone else may be, call the National Human Trafficking Resource Center toll free, 24/7 Hotline: CALL: (888) 373-7888 or TEXT BeFree or 233733.
This case was prosecuted by Assistant U.S. Attorney Derek Ko and Lyndzie M. Carter.
DEFENDANTS Case Number 23-cr-0513-LAB
Gabriel Joseph Gonzalez Age: 20 Pomona, CA
SUMMARY OF CHARGES
Sex Trafficking of a Minor – Title 18, U.S.C., Section 1591(a) and (b)(1)
Maximum penalty: Up to life in prison and $250,000 fine; Ten-year mandatory minimum sentence
AGENCY
San Diego Police Department
National City Police Department
Federal Bureau of Investigation, San Diego
San Diego Human Trafficking Task Force
Guatemalan Leader of Multi-Ton Cocaine Trafficking Organization Sentenced to Almost 22 Years in PrisonRead the Press Release
SAN DIEGO – Josue Adan Lemus-Lara, aka “Fenix,” was sentenced in federal court today to 260 months in prison. His sentence follows his conviction after a week-long jury trial in November 2023 where he was convicted on all charges in a maritime cocaine trafficking conspiracy.
During a multi-year wiretap investigation led by agents from Homeland Security Investigations and the Drug Enforcement Administration, Josue Lemus-Lara and his brother and co-conspirator, Willian Lemus-Lara, aka “Humilde,” were identified as leaders of a transnational criminal organization. The organization moved multi-ton quantities of cocaine at sea from South America to Guatemala and ultimately over land to Mexican counterparts, including members of the Sinaloa Cartel, for importation to the United States.
At trial, prosecutors presented evidence from 13 rounds of court-authorized wiretaps demonstrating that in 2017 Josue Lemus-Lara traveled from Guatemala to Colombia to oversee the Lemus-Lara Organization’s cocaine trafficking operation and to establish new cocaine supply lines. As Josue Lemus-Lara told a co-conspirator, “We either make money or we get thrown in jail or we get killed.”
In January 2018, U.S. Coast Guard officers seized a vessel sent by the
organization with cocaine concealed within fuel barrels.Prosecutors presented evidence at trial showing Lemus-Lara’s role as head of South American operations for the organization, including extensive wiretap transcripts, pictures Lemus-Lara sent of bespoke cocaine brands the group was procuring, and over a dozen photos of a cocaine laboratory in the Ecuadorian jungle. As prosecutors outlined at trial, in just a five-day span in May 2017, the organization dispatched four vessels, each carrying over 750 kilograms of cocaine from South America to Guatemala. Interdiction efforts by the United States Coast Guard stymied two of those loads, including 781-kilograms seized from the vessel below.
Josue Lemus-Lara, a Guatemalan national, was initially apprehended by Colombian authorities in February 2019. He was extradited to the United States from Colombia on December 2, 2020, upon request by the United States government.
This was a “highly sophisticated” and “spectacular conspiracy in its scope and depth,” said Chief U.S. District Judge Dana M. Sabraw. “It’s hard to put into words how sophisticated and involved it was.”
“This prosecution sends a shot across the bow to maritime traffickers moving narcotics across the Americas and into the United States,” said U.S. Attorney Tara McGrath. “Coordinated efforts of U.S. government agencies continue to identify, dismantle, and prosecute these operators inside our borders and beyond.”
“This significant sentencing reflects HSI, the United States Attorney’s Office, and our partner law enforcement agencies’ commitment to holding international drug traffickers responsible for their illicit activity,” said Chad Plantz, special agent in charge for HSI San Diego. “This complex multi-year investigation demonstrates HSI’s ability to disrupt and dismantle transnational criminal organizations and our commitment to protecting our communities and the people of the United States of America.”
“Drug traffickers drive addiction and destroy communities,” said DEA Acting Special Agent in Charge Paul Abosamra. “As such, the DEA and its partners will continue to pursue these traffickers in every corner of the globe and bring them to justice.”
“The members of the U.S. Coast Guard remain dedicated to helping dismantle the transnational criminal organizations that continue to threaten the lives within our community and country,” said Rear Admiral Andrew Sugimoto, commander, Coast Guard District 11. “As a service, we will continue to work with our international, federal and local partners to put an end to their illegal and dangerous operations and ensure these individuals are held accountable.”
This case was prosecuted by Assistant U.S. Attorney P. Kevin Mokhtari and Special Assistant U.S. Attorney Allison B. Murray.
DEFENDANT Case Number 18cr0390-DMS
Josue Adan Lemus-Lara Age: 39 Esquipulas, Guatemala
SUMMARY OF CHARGES
Conspiracy to Possess with Intent to Distribute Cocaine on Board a Vessel – Title 46, U.S.C., Sections 70503 and 70506(b)
Conspiracy to Distribute Cocaine Intended for Unlawful Importation into the United States – Title 21, U.S.C., Sections 959, 960 and 963
Maximum Penalties: Life in prison; $10 million fine
AGENCIES
Homeland Security Investigations (HSI)
Drug Enforcement Administration (DEA)
Customs and Border Protection (CBP)
U.S. Coast Guard
HSI Attaché Guatemala City, Guatemala
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)
Joint Interagency Task Force-South (JIATF-S)
San Diego Restaurant Owner Charged with Tax and COVID-Relief Fraud SchemesRead the Press Release
A federal grand jury in San Diego returned a superseding indictment on Feb. 2, charging a California man with wire fraud, conspiracy to commit wire fraud, tax evasion, filing false tax returns, conspiracy to defraud the United States, conspiracy to commit money laundering and failing to file tax returns.
According to the indictment, Leronce Suel was the majority owner of Rockstar Dough LLC and Chicken Feed LLC, both of which operated restaurants in the San Diego area. He allegedly conspired with his business partner to underreport over $1.7 million in gross receipts on Rockstar Dough LLC’s 2020 corporate tax return filed with the IRS. The indictment alleges that from March 2020 to June 2022, Suel and the business partner then used this false corporate tax return to qualify for the COVID-19-related Paycheck Protection Program and Restaurant Revitalization Funding loans. Suel also allegedly falsely certified on loan forgiveness applications that he spent the money his restaurants received from these programs only for payroll. The indictment charges that Suel and his co-conspirator made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. As part of the conspiracy, Suel and his co-conspirator allegedly concealed more than $2.4 million in cash at their residence.
The indictment further charges that Suel failed to report income he received from his businesses, including millions of dollars in cash and personal expenses paid for by the businesses, such as the rent for his home. In 2023, Suel also allegedly filed original and amended tax returns for prior tax years that included false depreciable assets and business losses.
If convicted, Suel faces a maximum penalty of 30 years in prison for each count of wire fraud and conspiracy to commit wire fraud, 10 years in prison for each count of conspiracy to commit money laundering, five years in prison for tax evasion and conspiracy to defraud the United States, three years in prison for each count of filing false tax returns and one year in prison for each count of failing to file tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Tara K. McGrath for the Southern District of California made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorney Julia Rugg of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Beeler for the Southern District of California are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
San Diego Drug Dealer Sentenced to Eight Years in Fatal Fentanyl OverdoseRead the Press Release
NEWS RELEASE SUMMARY—February 5, 2024
SAN DIEGO— Derek Neal Turfler of San Diego was sentenced in federal court today to 97 months in prison for his role in selling fentanyl pills to a 27-year-old woman who fatally overdosed on May 9, 2022.
According to his plea agreement, Turfler arranged a meeting to deliver fentanyl to the victim, Faithe Sioban Thogode, who died later that morning after using the fentanyl he provided. According to the government’s sentencing memorandum, the defendant was addicted to fentanyl, knew how deadly the drug was, and knew the consequences for selling the drug and causing another’s death, yet he sold her the drug anyway.
Turfler also knew that the victim worked at a drug and alcohol treatment center, had just celebrated five years of sobriety, and was going through a drug relapse when he sold her the deadly pills.
According to the sentencing memo, this was not the first time the defendant had seriously hurt someone due to fentanyl. In 2019, he was convicted in California state court of driving under the influence of fentanyl and causing great bodily harm and was on formal probation for that felony conviction at the time he sold the deadly pills to Thogode.
“Faithe Thogode is not a statistic. She was a loving daughter and a devoted friend to dozens of people who appeared in court today to show their lasting appreciation for her infectious laugh and kind heart,” said U.S. Attorney Tara McGrath. “The U.S. Attorney’s office is committed to our partnership with the DEA and the Overdose Response Team to hold accountable dealers—like this defendant—who deliver a fatal overdose.”
“Fentanyl kills and those who sell this lethal drug must be brought to justice,” said DEA Acting Special Agent in Charge Paul Abosamra.
Special Agents and Task Force Officers with the Drug Enforcement Administration’s Overdose Response Team (formerly known as Team 10) led the investigation into Thogode’s death. This case is the result of ongoing efforts by the U.S. Attorney’s Office, the Drug Enforcement Administration, the San Diego Police Department and the California Department of Health Care Services to investigate and prosecute the distribution of illegal drugs—fentanyl in particular—that results in overdose deaths. The Drug Enforcement Administration created the Overdose Response Team as a response to the increase in overdose deaths in San Diego County.
This case was prosecuted by Assistant U.S. Attorney Patrick C. Swan.
DEFENDANT Case Number: 23-cr-175-LL
Derek Neal Turfler Age: 29 San Diego, CA
SUMMARY OF CHARGES
Distribution of Fentanyl – Title 18, United States Code, Section 841(a)(1)
Maximum penalty: Twenty years in prison
AGENCIES
Drug Enforcement Administration
San Diego Police Department
State of California Department of Health Care Services
San Diego Restaurant Owner Charged with Tax Fraud and COVID-Relief FraudRead the Press Release
SAN DIEGO – San Diego restaurant owner Leronce Suel was indicted by a federal grand jury today on charges that he provided bogus information in applications for COVID relief programs and failed to report more than $1.7 million in revenue to the IRS.
According to the indictment, Leronce Suel was the majority owner of Rockstar Dough LLC and Chicken Feed LLC, both of which operated a series of restaurants in the San Diego area. He allegedly conspired with his business partner to underreport the $1.7 million in gross receipts on Rockstar Dough LLC’s 2020 corporate tax return (Form 1120-S) filed with the IRS.
The indictment alleges that from March 2020 to June 2022, Suel and his business partner conspired to use the false corporate tax return for tax year 2020 to qualify for the COVID-related Paycheck Protection Program and Restaurant Revitalization Funding loans. Suel also made materially false certifications on loan applications regarding the use of the money. The indictment charges that Suel and his business partner made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. As part of the conspiracy, Suel and his business partner allegedly concealed more than $2.4 million in cash at their residence.
The indictment further alleges that Suel also failed to report personal income he received from his businesses, including millions of dollars in cash and personal expenses paid by his businesses. Suel allegedly failed to timely file his individual tax returns for tax year 2018 and 2019 and evaded his individual income taxes for tax year 2020. The indictment alleges that in 2023, Suel filed original and amended tax returns that included false depreciable assets and business losses.
Assistant U.S. Attorney Christopher Beeler of the Southern District of California and Trial Attorney Julia Rugg of the Justice Department’s Tax Division are prosecuting the case.
*An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
DEFENDANT Case Number 23-CR-965-RBM
Leronce Suel Age: 47 San Diego, CA
SUMMARY OF CHARGES
Wire Fraud Conspiracy – Title 18, U.S.C., Section 1349
Maximum penalty: Thirty years in prison; $1 million fine; forfeiture and restitution
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Thirty years in prison; $1 million fine; forfeiture and restitution
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison; $500,000 fine, and forfeiture
Conspiracy to Defraud the United States – 18 U.S.C., Section 371
Maximum Penalty: Five years in prison and $250,000 fine
Tax Evasion – 26 U.S.C., Section 7201
Maximum penalty: Five years in prison; $100,000 fine; and restitution
Filing a False Tax Return – 26 U.S.C., Section 7206(1)
Maximum penalty: Three years in prison; $100,000 fine; and restitution
Failure to File a Tax Return – 26 U.S.C., Section 7203
Maximum Penalty: Five years in prison; $25,000 fine; and restitution
AGENCY
Internal Revenue Service – Criminal Investigation
Former U.S. Border Patrol Agent Pleads Guilty to Attempting to Distribute Methamphetamine and Receiving BribesRead the Press Release
SAN DIEGO – Former U.S. Border Patrol Agent Hector Hernandez pleaded guilty in federal court today, admitting that he used his official position to smuggle unauthorized immigrants and illegal drugs across the border in exchange for money.
According to his plea agreement, Hernandez admitted to using his official position to open border fences and allowing undocumented immigrants and controlled substances to enter the United States from Mexico. Hernandez also admitted to moving the drugs from the Southern District of California to other locations within the United States.
“Agent Hernandez betrayed his badge and his country,” said U.S. Attorney Tara McGrath. “Instead of providing protection from smugglers and drug traffickers, he joined them.”
“Border Patrol Agent Hernandez broke the public’s trust and abandoned his oath,” said DEA Special Agent in Charge Shelly Howe. “Law enforcement officers are required to uphold the law, not break it.”
“It’s always disheartening when individuals misuse their positions of trust within our government for nefarious activities,” said FBI San Diego Special Agent in Charge Stacey Moy. “Let this be a clear message, that we are absolutely resolved with our partners to rigorously investigate and pursue justice in all cases---even when they involve one of our own.”
“Department of Homeland Security Office of the Inspector General is grateful for the continued collaboration with our law enforcement partners as we root out corruption and crime along the Southwest Border. Today’s plea agreement sends a clear message that federal employees will be held accountable for their actions,” said the DHS Inspector General, Dr. Joseph V. Cuffari.
Hernandez admitted to taking Mexico-based smugglers on a tour of the US/Mexico border, identifying the best locations to sneak unauthorized immigrants into the United States, and sharing the locations of monitoring devices and cameras near the border to help them evade detection. Hernandez also admitted to opening restricted border fences on at least five occasions and allowing immigrants to enter the United States for cash payments of $5,000 each time.
On May 9, 2023, Hernandez met with someone he believed to be a drug trafficker but who was, in fact, an undercover federal agent. During this meeting, Hernandez agreed to pick up a bag full of narcotics that would be hidden near the border fence and bring it to the undercover agent in exchange for $20,000. Undercover agents loaded the bag with 10 kilograms of fake methamphetamine, one pound of real methamphetamine, and a tracking device, before placing the bag in a storm drain near the border fence.
Later that evening and while on duty, Hernandez drove his official vehicle to the storm drain and retrieved the bag. He drove the bag to his residence in Chula Vista and left it there for the remainder of his work shift. On May 10, 2023, after his shift was over, Hernandez returned home, retrieved the bag, and drove to meet with the undercover agent. He was arrested at that meeting. Upon arrest, investigators confirmed the bag still contained both the fake and real methamphetamine.
After Hernandez was arrested, agents searched his residence and found close to $140,000 in cash and 9 grams of cocaine. By Hernandez’s own admission, at least $110,000 of the seized cash represented proceeds from narcotics trafficking and bribery.
As part of his plea agreement, Hernandez forfeited his personal vehicle used to bring the drugs to the undercover agent; $110,000 of the seized cash; and his interest in the residence where the drugs were maintained.
This case is being prosecuted by Assistant U.S. Attorneys Sean Van Demark and Lawrence A. Casper.
Hernandez is scheduled to be sentenced on April 19, 2024 at 9 a.m. before U.S. District Judge Janis L. Sammartino.
DEFENDANTS Case Number 23cr1114-JLS
Hector Hernandez Age: 55 Chula Vista, CA
SUMMARY OF CHARGES
Attempted Distribution of Methamphetamine – 21 U.S.C., Sections 841(a)(1) and 846
Maximum penalty: Life imprisonment with a 10-year mandatory minimum
Receiving Bribe by Public Official – 18 U.S.C., Section 201(b)(2)
Maximum penalty: Fifteen years in prison
INVESTIGATING AGENCIES
Department of Homeland Security, Office of the Inspector General
Drug Enforcement Administration
Federal Bureau of Investigation
IRS Criminal Investigation
Attorney General Garland Honors U.S. Department of Justice Employees and Others for their Service at Annual Awards CeremonyRead the Press Release
SAN DIEGO – Attorney General Merrick B. Garland today announced the recipients of the annual Attorney General’s Awards recognizing extraordinary work of Justice Department employees and others. Recipients included several San Diego-based federal prosecutors and San Diego County District Attorney Summer Stephan.
“Each of today’s recipients has served with distinction, and in so doing, they have enabled the Justice Department to advance its work on behalf of the American people,” said Attorney General Garland. “Their exceptional leadership, heroism, and dedication have benefited people and communities across the country.”
San Diego recipients include:
- Chief of National Security and Cybercrimes John Parmley; Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve; FBI Special Agents Amy Poling, Adam James, Marina Shalfeyeva, Nicholas Arico, and Udell Hardy; and FBI Supervisory Special Agent Edison Constante. They received the Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security, which recognizes outstanding achievements and contributions toward protecting U.S. national security. They were singled out for their work on an espionage case. Please see https://www.justice.gov/usao-sdca/pr/four-chinese-nationals-working-ministry-state-security-charged-global-computer.
"This extraordinary team identified and exposed a worldwide computer-hacking campaign,” said U.S. Attorney Tara McGrath. “Their perseverance and dedication disrupted China’s efforts to steal trade secrets and sensitive data from universities, companies, and governmental organizations around the globe.”
- First Assistant U.S. Attorney Peter Ko, second-in-command of the U.S. Attorney’s Office, was recognized for exemplary leadership over the course of his DOJ career. “Mr. Ko has demonstrated outstanding professionalism and commitment to justice for more than two decades,” McGrath said. “I can’t think of anyone more deserving of this recognition.”
- San Diego County District Attorney Summer Stephan received the Attorney General’s Award for Meritorious Public Service. Each year the DOJ gives out just one award for meritorious public service nationwide. The award is designed to recognize significant contributions of citizens and organizations that have assisted the Department in accomplishing its mission and objectives.
“During Summer Stephan’s tenure as DA, San Diego has remained one of the safest large cities in America,” McGrath said. “Collaborative law enforcement relationships have been a hallmark of DA Stephan’s leadership. Her work with Department of Justice partners has resulted in dozens of high-impact cases, from fentanyl trafficking and elder fraud to illegal firearms and violent crime.”
For a comprehensive list of all award winners, please see https://www.justice.gov/opa/pr/attorney-general-merrick-b-garland-honors-justice-department-employees-and-partners-70th-and.
- Chief of National Security and Cybercrimes John Parmley; Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve; FBI Special Agents Amy Poling, Adam James, Marina Shalfeyeva, Nicholas Arico, and Udell Hardy; and FBI Supervisory Special Agent Edison Constante. They received the Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security, which recognizes outstanding achievements and contributions toward protecting U.S. national security. They were singled out for their work on an espionage case. Please see https://www.justice.gov/usao-sdca/pr/four-chinese-nationals-working-ministry-state-security-charged-global-computer.
Imperial County Dentist Sentenced to over Three Years in Prison and Nearly $8.5 Million in Restitution for Medicare FraudRead the Press Release
NEWS RELEASE SUMMARY – January 26, 2024
SAN DIEGO – Imperial County dentist Javad Aghaloo was sentenced in federal court today to 37 months in prison for defrauding Medicare and then covering it up. His former billing manager, Melissa Rosas, was sentenced to three years of probation with one year of home confinement for obstructing Medicare’s efforts to audit Aghaloo’s dental offices by providing false information.
The pair, along with others, conspired to commit health care fraud by billing Medicare for procedures that were not covered, not performed, or otherwise not necessary. Aghaloo pleaded guilty on October 2, 2023 to conspiracy to commit health care fraud; Rosas pleaded guilty on October 13, 2023 to obstructing a federal audit.
“Doctors should treat patients, not exploit them,” said U.S. Attorney Tara McGrath. “This office is committed to protecting vulnerable patients from doctors who take advantage of them, particularly when they do so with no regard for patient safety.”
U.S. District Judge Jinsook Ohta also ordered Aghaloo to forfeit more than $1 million in property purchased with money obtained from the fraud and pay restitution to Medicare in the amount of $8,476,466.23.
According to court records, Aghaloo and others recruited Medicare beneficiaries to get dental work done at one of Aghaloo’s two dental offices in Imperial County. To recruit Medicare patients, Aghaloo and his employees marketed their dental services as being covered by Medicare. Aghaloo and his employees knew this was untrue since Medicare does not cover dental services.
Once a Medicare beneficiary was in one of Aghaloo’s offices, Aghaloo and others performed some type of procedure (usually a tooth extraction) and submitted false claims to Medicare for the dental work using the person’s Medicare beneficiary number. Since tooth extractions are not covered by Medicare, Aghaloo’s offices submitted false claims for procedures like bone grafts that were never performed.
Between March 1, 2016 and October 18, 2018, Aghaloo’s dental offices submitted more than 7,000 false claims totaling over $18 million to Medicare, for which Aghaloo’s offices received $8,476,466.23.
To conceal the fraud, between April of 2017 and October of 2018, Rosas and Theresa Flores, Aghaloo’s office manager, submitted false documents to Noridian Healthcare Solutions, LLC., a Federal auditor for the Medicare program. Flores, who also pleaded guilty to obstructing an audit, is scheduled to be sentenced on Friday, March 8, 2024.
This case is being prosecuted by Assistant U.S. Attorney Christopher Alexander.
DEFENDANT Case Numbers 23cr0616-JO; 23cr2127-JO
Javad Aghaloo Age: 50 Indio, CA
Melissa Rosas Age: 42 Calexico, CA
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud, a felony, in violation of Title 18, United States Code, Section 371.
Maximum Penalty: Five years in prison and a fine of $250,000.
Obstructing a Federal Audit, a felony, in violation of Title 18, United States Code, Section 1516.
Maximum Penalty: Five years in prison and a fine of $250,000.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
U.S. Department of Health and Human Services, Office of Inspector General
Alleged Drug Trafficker Wilder Emilio Sanchez Farfan Extradited from ColombiaRead the Press Release
NEWS RELEASE SUMMARY – January 26, 2024
SAN DIEGO – Wilder Emilio Sanchez Farfan, aka Gato, an Ecuadorian national and alleged drug trafficker, made his first appearance in federal court today following his extradition to the United States from Colombia yesterday.
At the hearing, Sanchez Farfan entered a not guilty plea. U.S. Magistrate Judge Barbara L. Major ordered him detained pending trial. The next hearing is scheduled for March 4, 2024, at 1:30 p.m. before U.S. District Judge Gonzalo P. Curiel.
On October 30, 2019, a federal grand jury in the Southern District of California returned an indictment charging Sanchez Farfan with participating in a transnational conspiracy to traffic substantial quantities of cocaine from Colombia, through Ecuador, and into the United States. Sanchez Farfan’s organization is alleged to have been a major source of supply for the Sinaloa Cartel and the New Generation Jalisco Cartel in Mexico.
Sanchez Farfan was apprehended by Colombian authorities at the request of the United States in February 2023 while traveling in Colombia.
“We thank Colombian and Ecuadorian law enforcement authorities for their significant assistance,” said U.S. Attorney Tara K. McGrath.
The Justice Department’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Judicial Attaché’s office at the U.S. Embassy in Bogota provided critical assistance in securing the arrest and extradition of Sanchez Farfan.
This case is being prosecuted by Assistant U.S. Attorneys Kyle Martin and Ashley Goff.
DEFENDANT Case 19cr1610-GPC
Wilder Emilio Sanchez Farfan Age: 43 Ecuador
SUMMARY OF CHARGES
International Conspiracy to Distribute Controlled Substances– Title 18, U.S.C., Section 959, 960, and 963
Maximum penalty: Life in prison with a mandatory minimum of ten years in prison
INVESTIGATING AGENCIES
Drug Enforcement Administration
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigations
U.S. Marshals Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Husband and Wife Sentenced for $65 Million TRICARE FraudRead the Press Release
NEWS RELEASE SUMMARY – January 25, 2024
SAN DIEGO - Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, were sentenced in federal court today for orchestrating a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of more than $65 million.
Jimmy Collins received a 10-year prison sentence and was immediately taken into custody; Ashley Collins was sentenced to 18 months home confinement. The couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE.
The couple pleaded guilty in July 2023, admitting they worked with others to recruit sham TRICARE beneficiaries, mainly Marines from southern California who agreed to receive expensive, compounded medications in return for a kickback of approximately $300. Doctors and a nurse practitioner at Choice MD, a Tennessee medical clinic owned and operated by the Collinses, then wrote prescriptions for the sham TRICARE beneficiaries, despite never examining the patients.
Choice MD sent the prescriptions to The Medicine Shoppe, a small pharmacy in Bountiful, Utah, which filled the prescriptions and later received reimbursement from TRICARE. At the peak of the conspiracy, The Medicine Shoppe billed TRICARE over $10,000 (and at times upwards of $20,000) per fraudulent compounded prescription.
Between December 2014 and May 9, 2015 – the day TRICARE stopped reimbursing for compounded medications – the conspirators wrote thousands of fraudulent prescriptions amounting to $65,679,512 in fraudulent reimbursements.
The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on a percentage of the TRICARE reimbursement. Between approximately February and July 2015, these kickback payments to the Collinses totaled at least $45.7 million dollars. The Collinses, in turn, kicked back a small percentage of that money (approximately 10 percent) to recruiters working as part of their network, including defendants Josh Morgan, Kyle Adams, and Daniel Castro.
Authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud: an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.
The Collinses are the latest members of the conspiracy to be sentenced. The doctors who prescribed the compounded creams, and the corporate owner of the pharmacy that filled these prescriptions, were previously sentenced for their roles in the conspiracy to commit healthcare fraud. The patient recruiters and the nurse practitioner who facilitated the conspiracy await sentencing.
“Access to medical care is not a benefit for the service member, it’s a benefit to the rest of America to have a healthy and well cared for military force,” said U.S. Attorney Tara McGrath. “Today, defendants who defrauded millions of tax dollars intended for the care of our nation’s service members were held accountable for their crimes. Yachts and Aston Martins are a fantasy now, and prison is the reality.”
“Today’s sentencing demonstrates the commitment of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), and our law enforcement partners, to aggressively pursue illegal actions that pilfer taxpayer funds and degrade our military healthcare system,” said Acting Special Agent-in-Charge Gregory Shilling, DCIS Southwest Field Office. “DCIS will continue to diligently investigate these schemes in order to protect our service members and their families.”
“TRICARE fraud is not a victimless crime; it is theft of taxpayer dollars that would be directly used in support of the health and readiness of our warfighters,” said Special Agent-in-Charge Greg Gross of the NCIS Economic Crimes Field Office, “Today’s sentencing demonstrates NCIS’ and our law enforcement partners’ dedication to ensure the integrity of our government programs for the sake of the U.S. military and taxpaying public.”
DEFENDANTS Case Number: 18-CR-0432-JLS
Jimmy Collins Age: 59 Birchwood, TN
Ashley Collins Age: 37 Birchwood, TN
SUMMARY OF CHARGES
Jimmy Collins:
Receipt of Illegal Remuneration, in violation of 42 U.S.C. §1320(a)-7b(b)(1)(A)
Maximum penalty: Ten years in prison and $100,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $65,679,512.71 to DHA/TRICARE
Ashley Collins:
Conspiracy, in violation of 18 U.S.C. § 371
Maximum penalty: Five years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $65,679,512.71 to DHA/TRICARE
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office
Man Who Plundered Investors’ Money in $8.1 Million Ponzi Scheme Sentenced to 90 Months in PrisonRead the Press Release
NEWS RELEASE SUMMARY – January 22, 2024
SAN DIEGO – Richard Lee Ramirez was sentenced in federal court today to seven-and-a-half years in prison for running a Ponzi scheme that resulted in millions of dollars in losses to investors.
Between 2018 and 2022, Ramirez and his company, JMJ Capital Group (JMJ), obtained more than $8.1 million from dozens of investors and caused more than $5.4 million in losses through his scheme and misrepresentations.
Ramirez was indicted by a federal grand jury in September 2022 and pleaded guilty to securities fraud and money laundering charges in August 2023. In addition to Ramirez’s prison sentence, the court ordered forfeiture of $8,188,928 and restitution to 34 victims totaling $5,440,192.50.
The defendant solicited investments by lying to investors. Ramirez made several different misrepresentations, telling various investors, for instance: JMJ purchased and resold personal protective equipment (PPE); factored accounts receivable; sold furniture to major home improvement retailers; and contracted with a cruise line to rebuild and refurbish ships’ air conditioning units. JMJ did no such business.
Ramirez promised investors high short-term and medium-term returns on their money—between 10 and 30 percent—but they never received those returns. Ramirez also falsely told investors they could withdraw their money at any time, and sent them fake funding agreements and falsified account statements to carry out the scheme.
Rather than using investors’ money as promised, Ramirez used it to pay for his own personal expenses and to make Ponzi-style payments to other investors. He spent hundreds of thousands of dollars on travel, lodging, clothing, jewelry, and entertainment, and he spent over a half million dollars of investor funds on luxury cars including a Rolls Royce and Cadillac Escalade. Ramirez also used the money to take luxury vacations, to charter private jets and yachts, and to make an escrow payment on a property in San Diego County.
“Fraud and greed don’t pay unless you are in the market for a lengthy prison sentence. We hope this outcome provides some relief to the 34 victims, many of whom suffered devastating losses,” said U.S. Attorney Tara McGrath.
“The lasting effects of financial crimes on unsuspecting victims can be devasting both personally and economically,” said FBI San Diego Special Agent in Charge Stacey Moy. “The FBI and its law enforcement partners will continue to seek justice for individuals and businesses who are victimized by criminals who seek to defraud others for personal gain.”
This case is being prosecuted by Assistant U.S. Attorneys Peter Horn and Kevin Mokhtari.
DEFENDANT Case Number 22cr2264-BAS
Richard Lee Ramirez Age: 54 Encinitas, CA
SUMMARY OF CHARGES
Securities Fraud – Title 18, U.S.C., Sections 78j(b), 78ff, and Title 17, C.F.R., Section 240.10b-5
Money Laundering – Title 18, U.S.C., Section 1957
Criminal Forfeiture – Title 18, U.S.C., Sections 981(a)(1)(C), 982(a)(1), 982(b), and Title 28, U.S.C., Section 2461(c)
Maximum penalty: Twenty years in prison and $5 million fine
AGENCIES
Federal Bureau of Investigation
Securities and Exchange Commission
U.S. Attorney’s Office Collects $30.7 Million in Civil and Criminal Actions in Fiscal Year 2023Read the Press Release
NEWS RELEASE SUMMARY – January 19, 2023
SAN DIEGO – The U.S. Attorney’s Office for the Southern District of California collected $30,730,539.87 in criminal and civil actions in Fiscal Year 2023. Of this amount, $27,973,011.98 came from criminal actions and $2,757,527.89 from civil actions.
Additionally, the Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect $845,298.42 in cases pursued jointly by these offices.
“We pursue every possible means to compensate victims for loss and trauma suffered as a result of criminal acts,” said U.S. Attorney Tara McGrath. “Over the past year we joined forces with investigators and victim rights advocates to maximize restitution and return assets as quickly and efficiently as possible.”
For example, in United States v. Glenn Arcaro, 21CR2542-TWR, the government recovered and subsequently sold bitcoin controlled by the defendant, resulting in $17,647,813 in restitution paid directly to the victims of his criminal activity. The U.S. Attorneys’ Office also secured an additional $1,003,900.17 in forfeited funds for victims. Please see https://www.justice.gov/usao-sdca/pr/victims-bitconnect-scheme-receive-more-17-million-compensate-losses.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s Office in the Southern District of California, working with partner agencies and divisions, collected $9,072,677 in asset forfeiture actions in Fiscal Year 2023. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
San Diego County Veterinary Clinic Pays $125,000 for Mishandling Controlled SubstancesRead the Press Release
NEWS RELEASE SUMMARY – January 17, 2024
SAN DIEGO – Best Veterinary Care, a veterinary clinic in Valley Center, has paid $125,000 to resolve alleged Controlled Substances Act violations for diversion of controlled substances and failure to properly keep records necessary to account for controlled substances.
The settlement arises from a U.S. Drug Enforcement Administration investigation into suspected illegal activity at Best Veterinary Care d/b/a Valley Center Veterinary Clinic. Based on an inventory audit conducted by the DEA and other investigative activity, the Government concluded that Best Veterinary Care committed multiple violations of the Controlled Substances Act from 2020 through 2022. The alleged violations include failing to control the clinic’s inventory of controlled substances, failing to maintain a complete record of controlled substances, and failing to maintain effective controls to guard against theft and diversion of controlled substances. Best Veterinary Care’s failure to control inventory included unaccounted-for pills, including benzodiazepines alprazolam (e.g., Xanax) and diazepam and tramadol, an opioid.
In addition to paying $125,000 to resolve the government’s claims, Best Veterinary Care entered into a Memorandum of Agreement with the DEA requiring Best Veterinary Care to undertake additional measures to handle controlled substances properly and safely.
“Veterinarians have a responsibility to keep opioids and other dangerous drugs out of the wrong hands,” said U.S. Attorney Tara McGrath. “Failure to do so is not only reckless but is illegal and contributes to the raging opioid epidemic in this country.”
“Veterinarians, like all registrants, must dispense controlled substances in a lawful manner and provide effective controls to prevent the diversion of controlled substances,” said DEA Special Agent in Charge Shelly Howe. “DEA will continue to ensure registrants are upholding these policies and procedures.”
This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of California and the Drug Enforcement Administration.
To report a tip directly to a DEA representative regarding medical personnel writing suspicious opioid prescriptions and pharmacies dispensing large amounts of opioids, call (571) 324-6499, or visit the DEA’s website (https://www.deadiversion.usdoj.gov/) and click on “Report Illicit Pharmaceutical Activities.”
This case was prosecuted by Assistant U.S. Attorney Dylan M. Aste.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Mexican Mafia Associates Sentenced to Lengthy Prison TermsRead the Press Release
NEWS RELEASE SUMMARY – January 16, 2024
SAN DIEGO – Marquella Marshall and Marsha Delacruz were sentenced in federal court today to 180 months and 48 months in prison, respectively, for their parts in a methamphetamine distribution conspiracy that operated in San Diego jails.
According to court records, Marshall, a Texas resident who previously lived in San Diego, is an Eastside San Diego street gang member and a “facilitator” and “secretary” for the Mexican Mafia. In that role she was tasked by high-ranking Mexican Mafia members to communicate on their behalf, collect and launder money, handle drug transactions, and direct street operations on the Mafia’s behalf.
At today’s hearing, U.S. District Judge Larry Alan Burns described Marshall as “a conduit” for the Mexican Mafia and further described the distribution conspiracy as “an assault on the integrity of the prison system.”
U.S. Attorney Tara McGrath said: “Drug smuggling and use in prisons result in overdose, violence, and power struggles. These significant sentences are a strike against the prison drug culture which puts guards and staff at risk and exists in large part because of dangerous gangs like the Mexican Mafia.”
“Our focus is and always will be on protecting our communities from violent gang activity and the distribution of dangerous narcotics," said FBI San Diego Acting Special Agent in Charge John Kim. "This was a collective effort, and we thank our partners that make up the Violent Crime Task Force – Gang Group for their coordination in disrupting the illegal activities of the Mexican Mafia and ensuring Marshall and Delacruz suffer the consequences of their actions.”
Delacruz, of Lemon Grove, who also is an Eastside San Diego street gang member, worked at the direction of Marshall. As part of the conspiracy, Marshall, Delacruz, and others mailed methamphetamine to various locations, including jails and prisons in Southern California. Marshall and Delacruz disguised some of the narcotics-laden packages as legal mail to avoid detection by law enforcement and prison/jail officials.
Marshall, Delacruz, and several other Mexican Mafia associates were apprehended after an investigation by the FBI Violent Crimes Task Force - Gang Group.
DEFENDANTS Case Number 23-cr-00373-LAB
Marquella Marshall Age: 41 Houston, TX
Marsha Delacruz Age: 47 Lemon Grove, CA
SUMMARY OF CHARGES
Conspiracy to Distribute of Methamphetamine – Title 21, U.S.C., Sections 846 and 841(a)(1)
Maximum penalty: Life in prison, with a mandatory minimum of ten years (Marshall only), and $10 million fine
AGENCY
Federal Bureau of Investigation, Violent Crimes Task Force – Gang Group (VCTF-GG), which included investigators from the following agencies:
- Federal Bureau of Investigation
- San Diego Police Department
- Homeland Security Investigations
- Bureau of Alcohol, Tobacco, Firearms and Explosives
- California Department of Corrections
- San Diego County Sheriff’s Department
- Chula Vista Police Department
- National City Police Department
- Bureau of Prisons
- U.S. Postal Inspection Service
- San Diego District Attorney’s Office Investigations
Sinaloa Cartel Associate Sentenced After Decades of Cocaine TraffickingRead the Press Release
A Mexican national was sentenced today to 21 years and 10 months in prison and ordered to forfeit $280 million for his role in an international conspiracy to transport tens of thousands of kilograms of cocaine into the United States over the span of four decades.
In March 2023, Raul Flores-Hernandez, 71, pleaded guilty in the U.S. District Court for the District of Columbia to international cocaine trafficking conspiracy.
“For more than three decades, Raul Flores-Hernandez worked with the leaders of the world’s largest, most violent cartels, including El Chapo of the Sinaloa Cartel, to traffic deadly drugs into the United States,” said Attorney General Merrick B. Garland. “The Justice Department has held him accountable for his crimes, and he has been sentenced to more than 20 years in prison. Anyone who profits from the violence and devastation of the illegal drug trade at the expense of the American people should be prepared to face the full force of the Justice Department.”
“It may be impossible to quantify the destruction wrought by this defendant channeling vast quantities of cocaine across the globe,” said U.S. Attorney Tara McGrath for the Southern District of California. “One thing is certain—the world is far safer with this sentence.”
According to court documents, Flores-Hernandez was the leader of a drug trafficking organization responsible for trafficking hundreds of millions of dollars’ worth of cocaine from South America through Mexico and into the United States. For example, in 2003, Flores-Hernandez and his partners used oil tanks to smuggle more than two tons of cocaine into Mexico every week, at least half of which was imported into the United States. In 2007 and 2008, Flores-Hernandez sent tens of millions of dollars in U.S. currency to Colombia to purchase cocaine. During his time as a narcotrafficker Flores-Hernandez was closely aligned with the leaders of some of the most violent drug cartels, including Joaquin “El Chapo” Guzman of the Sinaloa Cartel and Hector Beltran of the Beltran Leyva Organization.
“Raul Flores Hernandez spent decades working closely with El Chapo and others to transport hundreds of kilograms of cocaine from South America, through Mexico, into the United States, knowing it would devastate American communities,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “He will now spend decades in prison. I commend DEA’s Los Angeles Field Division and San Ysidro District Office and our law enforcement partners for their work bringing Flores Hernandez to justice.”
“Today’s sentencing is the result of the close cooperation and dedication of HSI’s domestic and international law enforcement partners,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “HSI is dedicated to working with our partners to investigate, disrupt, and dismantle those transnational criminal organizations that threaten national security and the safety of our communities.”
The DEA Los Angeles Field Division and San Ysidro Office, as well as HSI San Diego, investigated the case, with assistance from the U.S. Marshals Service’s Investigative Operations Division.
Acting Assistant Deputy Chief Melanie L. Alsworth and Trial Attorneys Kirk Handrich and Jonathan Hornok of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorney Kyle Martin for the Southern District of California represented the United States during Flores-Hernandez’s sentencing.
The Justice Department’s Office of International Affairs worked with Mexican authorities to secure the arrest and extradition of Flores-Hernandez.
Prolific Drug Trafficker Sentenced to Almost 22 Years in Prison and Ordered to Forfeit $280 millionRead the Press Release
SAN DIEGO –Narcotrafficker Raul Flores Hernandez was sentenced in federal court today to 262 months in prison for moving hundreds of millions of dollars worth of cocaine into the United States over more than three decades. He was also ordered to forfeit $280 million in drug proceeds.
According to court documents, Flores Hernandez was a leader of a prolific drug trafficking organization that worked closely with Joaquin “El Chapo” Guzman of the Sinaloa Cartel and Hector Beltran of the Beltran Leyva Organization. He utilized his connections with suppliers in South America and corrupt government employees to transport hundreds of millions of dollars’ worth of cocaine into Mexico for importation into the United States.
“It may be impossible to quantify the destruction wrought by this defendant channeling vast quantities of cocaine across the globe,” said U.S. Attorney Tara McGrath. “One thing is certain - the world is far safer with this sentence.”“DEA and our partners will continue to hold drug traffickers, like Mr. Flores, responsible for their actions,” said DEA Special Agent in Charge Shelly Howe. We are steadfast in our commitment to reduce addiction, prosecute criminals, and make our communities safer.”
“Today’s sentencing is the culmination of years of relentless work by Homeland Security Investigations (HSI) and its partners targeting the Sinaloa Cartel,” said HSI San Diego Special Agent in Charge Chad Plantz. “This investigation highlights HSI’s dedication to go after cartel members importing dangerous drugs into our communities. This substantial sentence not only holds Mr. Hernandez accountable but also sends a resounding message that transnational criminal organizations are being continuously investigated and their leaders will be brought to justice.”
During more than three decades as a narcotrafficker, Flores was closely aligned with the leaders of some of the most violent drug cartels, including. In addition to leveraging his relationships with cartel bosses, Flores benefited from corrupt government employees who facilitated Flores’s drug trafficking activities in exchange for bribes.
This prosecution was a joint effort between the Southern District of California and the Department of Justice Criminal Division Narcotics and Dangerous Drugs Section.
Assistant U.S. Attorney Kyle Martin for the Southern District of California, Acting Assistant Deputy Chief Melanie L. Alsworth and Trial Attorneys Kirk Handrich and Jonathan Hornok of the Criminal Division’s Narcotic and Dangerous Drug Section prosecuted the case.
DEFENDANTS Case Number 17-CR-51 (BAH) (District of D.C.)
Raul Flores Hernandez Age: 74 MexicoSUMMARY OF CHARGES
International Conspiracy to Distribute Cocaine, 21 U.S.C. §§ 959, 960, 963
Maximum penalty: Life in PrisonAGENCY
Homeland Security Investigations
Drug Enforcement Administration
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.Former U.S. Navy Doctor Sentenced for Perpetrating a $2 Million Insurance Fraud SchemeRead the Press Release
SAN DIEGO – Dr. Michael Villarroel, who at the time of his crimes was a doctor in the U.S. Navy, was sentenced in federal court today to one year and one day in custody after admitting that he and others participated in a scheme to file false claims to obtain unearned benefits from an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty. He was also ordered to pay $180,000 as criminal forfeiture. A restitution hearing is scheduled on April 2.
Villarroels’ sentence followed his guilty plea to conspiracy to commit wire fraud. According to his plea agreement, participants in the scheme obtained approximately $2 million in payments from fraudulent claims submitted to the insurance program - Traumatic Servicemembers Group Life Insurance Program, or TSGLI.
Villarroel admitted that from 2012 to at least December 2015, he conspired with other members of the Navy to obtain money from the United States by making claims for life insurance payments based on exaggerated or fake injuries and disabilities. Villarroel certified that he reviewed the records and determined the injuries were legitimate when in fact he knew they were fake or exaggerated. At times Villarroel falsely stated that he interviewed the claimant and provided others service members actual medical records to be used in fabricating claims. Villarroel knew the claims were false but he signed off on them to receive kickbacks once the fake injuries resulted in insurance payouts.
“As fraudulent schemes go, this one was egregious,” said U.S. Attorney Tara McGrath. “Today the defendant found out there is a high price to be paid for pocketing money intended for injured and traumatized servicemembers.”
“Fraudulent activities compromise the integrity of government programs and services and divert compensation from deserving recipients,” said Special Agent in Charge Rebeccalynn Staples with the Department of Veterans Affairs Office of Inspector General’s Western Field Office. “This sentence holds the defendant accountable for his dishonest actions, and the VA OIG will continue to work tirelessly with our law enforcement partners to ensure schemes like this are uncovered, investigated, and prosecuted to the fullest extent of the law.”
“Michael Villaroel’s blatant abuse of his position of trust within the United States military is unscrupulous and this sentencing proves that such actions will not be tolerated,” said FBI San Diego Acting Special Agent in Charge John Kim. “The FBI and its law enforcement partners remain committed to aggressively disrupt, and, ultimately, bring to justice anyone who defrauds the United States government.”
“Dr. Villarroel betrayed his oath to the Navy and has been held to account for his role in a scheme that diverted more than $2 million in critical resources away from wounded service members recovering from traumatic injuries,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our partners are committed to rooting out corruption that threatens the safety and wellbeing of our service members and their families.”
The Traumatic Servicemembers Group Life Insurance (TSGLI) program was administered by Prudential for the Navy and funded by servicemembers and the Department of the Navy. TSGLI provided financial assistance to servicemembers recovering from traumatic injuries.
According to court records, Villarroel’s co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU One”) based in Coronado, California.
Assistant U.S. Attorneys Peter Ko and Mark Conover for the Southern District of California are prosecuting the case.
DEFENDANT 18CR1674-JLS
Michael Villarroel 51 Coronado, CaliforniaRELATED CASES
Kelene Meyer 18CR1674-JLS Jacksonville, FL
Christopher Toups 18CR1674-JLS White, GA
Paul Craig 18CR1674-JLS Austin, TX
Richard Cote 18CR1674-JLS Oceanside, CA
Earnest Thompson 18CR1674-JLS Murrieta, CA
Ronald Olmsted 20CR0659-JLS Mobile, AL
Anthony Coco 20CR0197-JLS San Diego, CA
Stephen Mulholland 20CR0052-JLS Panama City Beach, FLSUMMARY OF CHARGES
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
Others: 18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
18 U.S.C. § 1343, Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
18 U.S.C. § 287, Making a False Claim
Maximum Penalty: Five years in prison, $250,000 fineAGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
Department of Veterans Affairs - Office of Inspector GeneralNational City Man Sentenced for Transporting Teens for ProstitutionRead the Press Release
NEWS RELEASE SUMMARY – January 5, 2024
SAN DIEGO – Kenneth Tenorio of National City was sentenced in federal court today to 106 months in prison for transporting two female teens from San Diego to Phoenix, Arizona and El Paso, Texas, for the purpose of prostitution.
U.S. District Court Judge Cathy Bencivengo admonished the defendant for his treatment of victims, saying: “You just took advantage of their vulnerabilities to put money in your pocket.” She noted the maximum sentence of 120 months was appropriate but gave Tenorio credit for the time he spent in custody in Texas on local charges prior to the federal proceedings.
According to court records, Tenorio’s conduct spanned multiple states and involved multiple victims, including juveniles. The defendant exploited women and minors who had been removed from their homes and placed in the foster care system as part of his overall scheme to profit from their commercial sex work.
Tenorio pleaded guilty on August 8, 2023, admitting that he transported two of his victims from California to Arizona and Texas for the purpose of offering them for commercial sex for his own financial gain. The defendant used his Megapersonals account – a dating website that is frequently used to solicit prostitution – to post commercial sex advertisements featuring the two victims wearing lingerie. The defendant expected his victims to provide him with a portion of the proceeds they earned from engaging in commercial sex acts in these various locations.
According to his plea agreement, beginning in September 2020, the defendant also trafficked a 15-year-old minor identified as JF1. The defendant knew JF1 was a minor and nonetheless sent text messages to JF1 for the purpose of recruiting and enticing her to engage in prostitution.
The plea agreement reflects that in October 2020, JF1 stayed with the defendant at his residence in National City, California, and he used a false California identification to post online commercial sex advertisements featuring her. He also instructed her on how to engage in prostitution on “the blade” – a slang term that refers to an area of town where prostitutes/sex workers solicit sex-buyers – and informed her that he would provide protection for a fee. The defendant admitted that JF1 worked “the blade” for him a number of times in October 2020, and each time, he drove her there and picked her up, collecting a portion of the illicit proceeds she earned.
“Sex trafficking is a deplorable crime that impacts victims for a lifetime,” said U.S. Attorney Tara McGrath. “This sentence brings justice to the victims and the community is safer with this defendant off the streets. People being exploited are often overlooked and isolated. If you suspect someone is in an unsafe situation or they are being controlled by a “pimp,” romantic partner, manager or employer, or anyone who monitors their movements, their spending and/or their communications, please report it to law enforcement. If we know about it, we can offer help.”
“This lengthy sentence serves as an appropriate punishment for the defendant’s role in exploiting multiple victims for the sole purpose of financial gain, including preying upon a minor,” said Chad Plantz, special agent in charge for HSI San Diego. “Now behind bars, this man cannot participate in the lowest form of humanity – placing our most vulnerable population in harm’s way. HSI and our partnered agencies are committed to aggressively targeting those who continually victimize people for profit.”
“Predators like Mr. Tenorio take advantage of vulnerable people and underage victims. They alternate locations, thinking law enforcement won’t catch on. But that’s not true, and the results of this case as well as this substantial sentence should be a warning to other criminals,” said Chula Vista Police Chief Roxana Kennedy. “I’m proud of our detectives for playing a key role in the initiation and follow up of this investigation. The Chula Vista Police Department remains dedicated to working with all of our law enforcement partners and community organizations to combat sex trafficking and hold those who participate in these unconscionable acts accountable.”
January is National Human Trafficking Prevention Month, a time to raise awareness and educate the public about how to identify and prevent this crime. Indicators that someone is being trafficked include frequent running away; sudden separation or isolation from friends and loved ones; changes in behavior, appearance, and attire; new friend groups; unexplained new or multiple cell phones; and secrecy with phones and social media.
If you believe you may know someone who is in trouble, held in a forced work situation, or being exploited, please contact Homeland Security Investigations at 1-866-347-2423, the FBI, your local police department, the sheriff, or the National Human Trafficking Hotline at 1-888-373-7888.
“We can all do our part to protect the most vulnerable among us,” McGrath said. “Working together, we can find more of the people in need, offer them support, and deliver justice to those who would trade freedom for profit.”
This case is being prosecuted by Assistant U.S. Attorney Jill S. Streja.
DEFENDANTS Case Number 22cr2746-CAB
Kenneth Tenorio 54 National City, CA
SUMMARY OF CHARGES
Transportation for Purposes of Prostitution – Title 18, U.S.C., Section 2421
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
The investigation was led by Homeland Security Investigations, the Chula Vista Police Department, and the San Diego Human Trafficking Task Force, a regional, multi-agency effort led by the California Department of Justice dedicated to supporting survivors and holding traffickers accountable. The task force is comprised of numerous federal, state, and local agencies, as well as the Southwest Border High Intensity Drug Trafficking Area program. The investigation was also supported by the San Diego District Attorney’s Office.
Anyone who has information about human trafficking should report that information to the National Human Trafficking Hotline toll-free at 1-888-373-7888, which is available 24 hours a day, seven days a week. For more information about human trafficking, please visit www.humantraffickinghotline.org.
Fugitive Leonard Francis Back in San Diego; Appears in Federal CourtRead the Press Release
NEWS RELEASE SUMMARY – January 4, 2024
SAN DIEGO – Leonard Glenn Francis, the infamous fugitive who presided over a massive decade-long conspiracy involving scores of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and gifts, appeared in federal court today for the first time since he cut off his electronic monitoring bracelet and absconded from house arrest in San Diego in September 2022.
At the hearing, the government asked U.S. District Judge Janis L. Sammartino to set a new sentencing date immediately to avoid delays, but the judge postponed a decision based on a request by Francis’ legal team to withdraw from the case in the aftermath of his disappearance. The judge set a status hearing for February 8, 2024, at 9 a.m.
Francis, who fled the United States before he could be sentenced, was returned to the United States from Venezuela as part of a prisoner swap on December 20, 2023. From Venezuela, he arrived in the Southern District of Florida and appeared in federal court the next day in Miami, where he was ordered removed to the Southern District of California. Francis arrived in San Diego on January 3.
Francis, the owner and chief executive of Glenn Defense Marine Asia, which provided services to U.S. Navy ships in ports in the Asia-Pacific region, pleaded guilty to bribery and fraud charges in 2015. As a result of the federal investigation, more than 30 U.S. Navy officials and associates pleaded guilty.
“Leonard Francis is no longer on the run. He is on the hook,” said U.S. Attorney Tara K. McGrath. “Mr. Francis never should have fled the United States while he was waiting to be sentenced. In fact, he was ordered by a federal judge not to do so. Now that he is back in San Diego, Mr. Francis will be held fully accountable for his crimes.”
DEFENDANTS Case Number 13-CR- 4287
Leonard Glenn Francis Age: 59 Singapore
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater;
Bribery, in violation of 18 U.S.C. § 201. Maximum 15 years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.
Conspiracy to Defraud the United States, in violation of in violation of 18 U.S.C. sec. 371. Maximum penalty five years in prison $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Phillips Respironics Pays $2.4 Million for Allegedly Giving KickbacksRead the Press Release
NEWS RELEASE SUMMARY – December 22, 2023
SAN DIEGO – Phillips Respironics, a manufacturer of durable medical equipment based in Pennsylvania, has paid $2,471,359.25 to resolve allegations that it violated the False Claims Act by giving kickbacks to sleep laboratories.
The Anti-Kickback Statute prohibits paying money or giving goods to induce referrals for medical services or items covered by a federal health care program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.
The settlement resolves allegations that from 2016 through 2021, Philips RS North America LLC f/k/a Philips Respironics, Inc. provided sleep labs with free masks used to treat and diagnose sleep-related respiratory disorders to induce the labs’ physicians to write referrals or prescriptions for Respironics-brand masks that suppliers would fill and bill to federal health care programs.
“When kickbacks are used as bribes, patients suffer,” said U.S. Attorney Tara McGrath. “Companies like Phillips Respironics will be held accountable if they undermine our trust in the medical system and shift medical advice from a patient’s best interest to lining their own pockets.”
“Respironics’ improper inducements corrupted the integrity of federal healthcare programs, including the Department of Defense's (DoD) TRICARE program,” said Bryan D. Denny, Special Agent-in-Charge of the DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS will continue to pursue those who defraud or attempt to defraud TRICARE, because those deceptive actions ultimately harm those defending our country and their families.”
This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of California; the Defense Criminal Investigative Service; the Department of Health and Human Services, Office of Inspector General and Office of Counsel to the Inspector General; the Defense Health Agency Office of General Counsel; the Civil Division of the United States Department of Justice; and the National Association of Medicaid Fraud Control Units.
This case was prosecuted by Assistant U.S. Attorney Dylan M. Aste.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Fresno Man Admits He and Coconspirator Murdered Family of Five in Their Home, including Three ChildrenRead the Press Release
NEWS RELEASE SUMMARY – December 21, 2023
SAN DIEGO – Christopher Baltezar Hernandez of Fresno, California, pleaded guilty in federal court today, admitting that he and another man stalked and fatally shot a family of five – including three children - in their Tijuana home on December 3, 2021.
According to court records, Hernandez traveled from Fresno, California, to Tijuana, Mexico, through San Diego, armed with an assault rifle, .223 caliber ammunition, and two revolver speed loaders on December 3, 2021. That same day, Hernandez met up with codefendant Victor Aguilar, who has already pleaded guilty and is awaiting sentencing.
Both Hernandez and Aguilar, armed with a .223 assault rifle and revolver and wearing dark clothes and gloves, traveled to the victims’ residence in Tijuana. According to the plea agreement, which identified the victims by their initials, the defendants shot and killed J.H. and her eight-year-old daughter, A.M.M., in the kitchen. G.M.V. was shot and killed while attempting to shield the other two children behind a bedroom door. The door was forced open and nine-year-old A.M. and four-year-old S.M. were each shot in the head.
Prior to the murders, Hernandez and Aguilar had researched the victims’ address and the surrounding area over 200 times. Hernandez also bought the parts and built a fully functional .223 caliber assault rifle as well as a pair of revolver speed loaders. On the day of the murders, Hernandez and Aguilar acquired a revolver in Tijuana, Mexico.
A sentencing hearing for Hernandez is scheduled for March 18, 2024, at 10 a.m. before U.S. District Judge Linda Lopez. Aguilar’s sentencing hearing is currently scheduled for June 26, 2024, also before Judge Lopez.
This case is being prosecuted by Assistant U.S. Attorneys Mario Peia, Matthew Brehm and Fred Sheppard.
DEFENDANTS Case Number 22cr778-LL
Christopher Baltezar Hernandez Age: 27 Fresno, CA
Victor Armondo Aguilar Age: 22 Tijuana, MX
SUMMARY OF CHARGES
Conspiracy to Murder – Title 18, U.S.C., Section 1117
Maximum penalty: Life in prison
Stalking Resulting in Death – Title 18, U.S.C., Section 2261A
Maximum penalty: Life in prison
AGENCY
Federal Bureau of Investigation
San Diego County Sheriff’s Department
Chula Vista Woman Admits Coordinating Alien Smuggling Through Otay Mesa Port of EntryRead the Press Release
NEWS RELEASE SUMMARY – December 19, 2023
SAN DIEGO – Ericka Aldana of Chula Vista pleaded guilty in federal court today, admitting that she managed all aspects of a human smuggling operation - from helping to place undocumented immigrants in trunks, to coaching drivers to successfully cross the Otay Mesa Port of Entry, to staging immigrants at a Chula Vista stash house, to helping transport them to their final destinations in the U.S.
Aldana admitted that she recruited at least five drivers, procured vehicles for their use, obtained passports for them, and coached them how to dress and how to answer questions by Customs and Border Protection officers. Aldana said she crossed the border in tandem with the drivers to direct them to what she considered the less risky border lanes.
Aldana acknowledged smuggling more than 25 aliens during a five-year span, some of whom paid as much as $10,000 to be smuggled into the United States.
“Ms. Aldana avoided getting caught for years, but she could not evade accountability forever,” said U.S. Attorney Tara K. McGrath. “Federal law enforcement brought a carefully choreographed network of cross-border human smuggling to justice today.”
“Human smuggling is a serious and dangerous offense,” said Sidney K. Aki, Director of Field Operations for Customs and Border Protection’s San Diego Field Office. “This effort was an outstanding demonstration of law enforcement partnership and commitment to dismantling criminal organizations that exploit vulnerable migrants for profit.”
“Human smuggling is driven by greed as the defendant demonstrated in this case,” said Chad Plantz, special agent in charge for HSI San Diego. “HSI and partnered law enforcement agencies will not stand for this deceitful and often violent act of human smuggling. We are committed to bringing down human smugglers one by one.”
The defendant is scheduled to be sentenced on March 15, 2024, at 9 a.m. before U.S. District Judge Cathy Ann Bencivengo.
This case is being prosecuted by Assistant U.S. Attorneys Julie A. Bauman and Michael A. Deshong.
DEFENDANTS Case Number 23cr2174-CAB
Ericka Aldana Age: 40 Chula Vista, California
SUMMARY OF CHARGES
Conspiracy to Bring in Aliens Without Presentation – Title 8, United States Code, Section 1324(a)(2)(B)(iii) and Title 18, United States Code, Section 371
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
United States Customs and Border Protection