Eastern District of Texas

PLANO, Texas – A former Decatur man, now living in California, has been sentenced to federal prison for tax fraud in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Kenneth Edward Jackson, 47, pleaded guilty to false statements on income tax return and was sentenced to 36 months in federal prison by U.S. District Judge Robert W. Schroeder, III on May 1, 2024.  Jackson was also ordered to pay restitution in the amount of $484,187.57 to the IRS and several of his small-business clients.

According to information presented in court, Jackson was the president and owner of Employer Tools and Solutions (ETS), a payroll service provider that operated in Denton County, Texas.  ETS filed Forms 940 and 941 on its clients’ behalf and made payroll and payroll tax payments using funds provided by its clients.  Part of ETS’s function in processing its clients’ payroll was holding and remitting employment tax to the Internal Revenue Service for its clients.  Employment tax consists of trust fund taxes, which are items withheld from employees’ paychecks, and the employer portion of taxes.

From 2017 to 2019, Jackson embezzled hundreds of thousands of dollars from his small-business clients. He took funds provided by various clients for employment taxes and failed to pay the money over to the IRS.  Instead, he kept this money and used it to pay bills—including payments on his home—and to fund his lifestyle—including a European vacation.  Jackson also failed to report the client funds he embezzled as income on his U.S. Individual Income Tax return.    

“As a payroll service provider, Jackson’s clients trusted him to honestly handle their finances,” said U.S. Attorney Damien M. Diggs.  “But Jackson allowed his greed to overtake his fiduciary duties.  In addition to defrauding the United States, he also preyed upon his own clients to support his opulent lifestyle. We are grateful for our partners at the IRS, who not only protect our nation’s treasury, but also victims of financial fraud.” 

“The failure to pay employment tax has a pernicious effect on the American public. It results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Christopher J. Altemus Jr., special agent in charge of the IRS Criminal Investigation’s Dallas Field Office. “Instead of paying over the employment taxes received from his clients as part of his payroll business, Mr. Jackson embezzled those funds. He has been held accountable for his actions and sentenced to 36 months in prison and ordered to pay $484,187.57 in restitution.”

This case was investigated by the Internal Revenue Service – Criminal Investigations and the Frisco Police Department and prosecuted by Assistant U.S. Attorney Sean J. Taylor.

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HOUSTON – A 35-year-old resident of Miami, Florida, has been sentenced for conspiracy to commit access device fraud and aggravated identity theft, announced U.S. Attorney Alamdar S. Hamdani.

Claude Casimir pleaded guilty Sept. 7, 2023.

U.S. District Judge Charles Eskridge has now ordered Casimir to serve 30 months in federal prison to be immediately followed by 3 years of supervised release. At the hearing, the court heard additional arguments about the scheme and the defendant’s criminal history.

From April to May 2019, Casimir and others conspired in a scheme targeting the Houston area. The investigation began in early 2019 after a local bank discovered numerous fraudulent transactions. They found that individuals had used the personal identification numbers of actual bank customers and withdrew money via counterfeit cards.

At the time of the plea, Casimir admitted he rented a vehicle to access several ATMs in the Houston area and withdrew cash using counterfeit debit cards. He also drove another individual around the Houston area using the rented vehicle to do the same.

Additionally, Casimir admitted that on May 8, 2019, he used a debit card of another individual without that person’s knowledge or consent. In this single transaction, Casmir attempted to take $2,000.

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Secret Service conducted the investigation. Assistant U.S. Attorney Rodolfo Ramirez prosecuted the case.

PLANO, Texas – A former Guatemalan congressman has pleaded guilty to his role in an international drug trafficking conspiracy, announced U.S. Attorney Damien M. Diggs of the Eastern District of Texas. 

Jose Armando Ubico Aguilar, 45, a former senior Republic of Guatemala official, pleaded guilty to ­­­­an international drug trafficking conspiracy violation before U.S. Magistrate Judge Kimberly Priest Johnson on May 1, 2024.  Ubico Aguilar arrived in the United States from Central America earlier this week and was arrested.

According to information presented in court, Ubico Aguilar served as an elected member of the Congress of the Republic of Guatemala from 2016 to 2024.  He also served as an elected Deputy and was the President of the National Defense Committee of the Congress of the Republic of Guatemala from 2018 to 2023.

“As a senior leader in the Republic of Guatemala, Ubico Aguilar was entrusted to further the fight against drug traffickers pushing illegal narcotics north to the United States,” said U.S. Attorney Damien M. Diggs.  “Even more so, as the President of the National Defense Committee of the Congress of Republic of Guatemala, Ubico Aguilar was responsible, in part, for his own country’s national security.  Instead, Ubico Aguilar betrayed his country when he chose to partner with known drug traffickers and other corrupt officials.  We are grateful to our foreign law enforcement partners for ensuring Ubico Aguilar, and those like him, will not be allowed to hide behind their positions of power.”  

“The arrest of this corrupt official who allegedly brokered and facilitated cocaine shipments into the United States shows the swift justice criminals will meet through DEA Dallas’ efforts to dismantle Transnational Criminal Organizations across the world,” said DEA Special Agent in Charge Eduardo A. Chávez.  “We are proud to collaborate with our DEA offices around the world as well as our international counterparts who collectively share the same goal – enforce the rule of law and ensure consequences come to those who profit from illicit drug distribution in our communities.”

On March 3, 2021, a federal grand jury in the Eastern District of Texas indicted Ubico Aguilar charging him with federal drug trafficking violations.  During his plea hearing, Ubico Aguilar admitted his role in the conspiracy, including relaying drug-related information and U.S. currency to another Guatemalan official on behalf of an international drug trafficker.  These actions resulted in the safe passage of at least 450 kilograms of cocaine through Guatemala for distribution in the United States. 

Ubico Aguilar faces from 10 years to life in federal prison at sentencing.  The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being investigated by the North Texas Organized Crime Drug Enforcement Task Force (“OCDETF”) Strike Force Group Two; the U.S. Drug Enforcement Administration’s Dallas Division; the DEA’s Guatemala City Country Office and the DEA’s San Jose (Costa Rica) Country Office; the FBI’s Dallas Field Office; the Homeland Security Investigation’s Dallas and Guatemala Field Offices; the U.S. Marshals Service’s Dallas Field Office; and Customs and Border Patrol’s San Diego Field Office. The Justice Department’s Office of International Affairs of the Department’s Criminal Division also provided assistance in furthering the prosecution.    

This case is being prosecuted by Assistant U.S. Attorney Christopher Eason.

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PLANO, Texas – A Dallas man who sold fentanyl-laced pills has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Benjamin Linder, also known as Benzo, 23, pleaded guilty to conspiracy to distribute fentanyl resulting in death and was sentenced to 200 months in federal prison on April 30, 2024 by U.S. District Judge Robert W. Schroeder III.

According to information presented in court, on Dec. 24, 2021, law enforcement responded to a Frisco residence regarding an unresponsive person.  Upon arrival officers were informed by the father of the victim that he had found his 20-year-old son unresponsive on the living room floor.  Paramedics arrived but were unable to revive the victim and he was pronounced deceased at the residence. 

Investigators were able to access the victim’s cellular phone and discovered the phone contained a contact labeled as “Benzo,” later identified as the defendant, Benjamin Linder.  Investigators learned that on Dec. 23, 2021, the victim sent a message to Linder requesting to purchase pills and “lean,” which is a promethazine-codeine syrup.  A series of text messages between the victim and Linder revealed they arranged to meet in a parking lot on the campus of the University of Texas at Dallas, where the victim purchased fentanyl-laced pills and “lean” from Linder.  Investigators were able to determine that the victim had been communicating with Linder since at least November 10, 2021.  Investigators were able to access Linder’s text messages as well, which showed Linder sent an unidentified person messages stating, “So that kid that died” and “I jus found out I sold him the drugs.”

Toxicology reports identified the victim’s cause of death as toxic effects of fentanyl, flubromazepam, trazodone, hydroxyzine, and promethazine.  Linder was indicted by a federal grand jury on Jan. 12, 2023, and charged with federal drug trafficking violations.

This case was investigated by the Frisco Police Department Special Investigations Unit and the Collin County Medical Examiner’s Office and prosecuted by Assistant U.S. Attorney Matthew T. Johnson.

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BEAUMONT, Texas – An Orange, Texas convicted felon has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Michael Octavius Hampton, 51, pleaded guilty on Oct. 4, 2023, to being a felon in possession of a firearm and was sentenced to 33 months in federal prison by U.S. District Judge Marcia Crone on April 23, 2024.

According to information presented in court, on June 26, 2023, Hampton visited a pawn shop in Orange where he was known by the employees as he frequently pawned various items such as tools.  Hampton requested to purchase a pistol, provided his state-issued identification and completed the required ATF Form 4473.  On the form, Hampton indicated he had never been convicted of a felony, a requirement to purchase a firearm.  Hampton then signed the form acknowledging the information he provided was true and correct.  The pawn shop submitted the form through the National Criminal Background Check System, also known as NICS, and received a message indicating the transaction was neither approved nor denied and pending further background checks.  As required by law, the pawn shop did not transfer the firearm to Hampton due to the delayed status and Hampton left the store.  On July 3, 2023, Hampton came back to the pawn shop to pick up the firearm that he had purchased.  The NICS check was still in delayed status, however since the pawn shop had waited the required three days without a denial, the firearm was transferred to Hampton.  Hampton again re-certified that his answers on the ATF 4473 Form were correct – including that he had not been previously convicted of a felony – by signing the form a second time.  Hampton then took possession of the firearm, which was captured on video by the pawn shop. 

Further investigation revealed Hampton was a convicted felon having been previously convicted of murder in Jefferson County in 1995 and prohibited by federal law from owning or possessing firearms or ammunition.  Hampton was arrested by federal agents at his home on July 26, 2023, and the firearm was recovered.  

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone.  On May 26, 2021, the department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorney Matt Quinn.

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BEAUMONT, Texas – The Justice Department established the formation of carjacking task forces in 11 targeted districts across the United States, including the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

“The Justice Department has no higher priority than keeping our communities safe. We do so by targeting the most significant drivers of violent crime and by acting as a force multiplier for our state and local law enforcement partners. We’re seeing results — with violent crime declining broadly nationwide,” said Deputy Attorney General Lisa Monaco. “Today, we are launching seven new carjacking task forces across the country to build on the success of task forces in Chicago, Washington, D.C., Philadelphia, and Tampa, where available data shows that carjacking rates are now falling. When prosecutors, officers, agents, and analysts come together to crunch data, share intelligence, and apply best practices, we can make real progress in the fight against all forms of violent crime, including carjacking.”

In keeping with the Department’s Comprehensive Strategy for Reducing Violent Crime, the task forces represent a strategic enforcement priority for the Department, focusing federal resources on identifying, investigating, and prosecuting the most significant drivers of violent crime.

Building on the initial efforts of and best practices learned from carjacking task forces in the U.S. Attorneys’ Offices for the District of Columbia, Northern District of Illinois, Eastern District of Pennsylvania, and Middle District of Florida, U.S. Attorneys’ Offices in the following seven districts are announcing the creation of carjacking task forces in their communities:

• District of Oregon
• Eastern District of Texas
• Northern District of Alabama
• Northern District of California
• Eastern District of Louisiana
• Southern District of Mississippi
• Western District of Washington

Carjacking and other violent crime task forces have proven to be an effective part of successful violent crime reduction strategies by focusing on significant crime drivers and taking violent offenders off the streets of our communities. For example, carjackings in Philadelphia declined by 31% from 2022 to 2023, and armed carjackings are down 28% in the District of Columbia this year compared to the same period in 2023. In Chicago, carjackings decreased 29% from a high in 2021 through the end of 2023.

U.S. Attorney Diggs announced the newly formed task force in the Eastern District of Texas, led by Deputy Chief of Violent Crime John B. Ross, the FBI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), alongside state and local law enforcement partners, including the Beaumont and Port Arthur police departments.  These task force members will come together to institute expedited sharing and prompt action procedures related to car thefts, carjackings, and the recovery of stolen or suspect vehicles — as well as effective evidence gathering and technology exploitation strategies. The task forces will also collaborate on how to use federal sentencing enhancements for cases where adults use juveniles to commit carjackings, as well as work with state and local authorities to ensure the appropriate handling of juvenile suspects. The task forces will also assist state and local officials who wish to seek Justice Department grant funding for juvenile intervention and diversion resources.

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BEAUMONT, Texas – A Port Arthur man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

DeShawn Ranard Willis, 42, pleaded guilty on May 18, 2023, to being a felon in possession of a firearm and was sentenced to 63 months in federal prison by U.S. District Judge Marcia Crone on April 15, 2024.

According to information presented in court, on Dec. 29, 2021, Willis was arrested after a Port Arthur Police Department officer stopped the vehicle he was driving for a defective headlight on Gulfway Drive. Willis admitted to possessing a firearm underneath the driver’s seat.  Officers recovered the pistol, which was loaded with 15 rounds of ammunition. Further investigation revealed Willis was a six-time convicted felon and prohibited by federal law from owning or possessing firearms or ammunition.  Willis was indicted by a federal grand jury on June 8, 2022 and charged with firearms violations.  

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone.  On May 26, 2021, the department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case was investigated by the Port Arthur Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

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BEAUMONT, Texas – A Liberty woman has been sentenced to federal prison for illegally preparing a tax return in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Teletshia Elice Randolph, 48, pleaded guilty to aiding and assisting in the preparation of a false tax return and was sentenced to 30 months in federal prison by U.S. District Judge Marcia A. Crone on April 15, 2024.

According to information presented in court, in 2019, special agents with the Internal Revenue Service began noticing a pattern of questionable tax forms filed in previous years associated with an IP address which was registered to Randolph.  In order to receive payment for preparing or assisting in the preparation of a federal tax return, a person is legally required to have a valid Preparer Tax Identification Number (PTIN), and paid preparers must sign and include their PTIN on the return. Not signing a return, commonly known as “ghost preparation,” is often a red flag that a preparer is attempting to avoid detection by the IRS.  Randolph did not have a registered PTIN and was suspected of being a “ghost preparer.”  Further investigation revealed Randolph was operating an illegal tax preparation business from her residence.  Randolph would meet and communicate with clients and obtain the necessary information from them to file their taxes.  Randolph would then create fraudulent tax documents indicating the tax filer owned farm equipment and animals and were entitled to deductions they were not.  Randolph would then file the tax documents in a way that appeared they were prepared by the actual tax filer.  Randolph would keep approximately fifteen percent of each fraudulent tax return.  IRS records revealed Randolph filed a total of 542 tax returns on behalf of 282 tax-payer clients for tax years 2016, 2017, and 2018. The IRS estimates the total tax loss for these returns had approached six million dollars.  

“Today, many Americans are fulfilling their duties as citizens of our great country and filing their taxes, said U.S. Attorney Damien M. Diggs.  “Sadly though, many individuals use the tax filing system to their advantage and unjustly enrich themselves.  Teletshia Randolph did just that, by defrauding the government for many years and fraudulently filed taxes for taxpayers for her own benefit.  My office is committed to protecting the integrity of the tax filing process and bringing to justice those that manipulate it to their advantage.”

“Randolph is a ghost preparer, someone who is willing to take your money and let you go to prison for filing a fraudulent tax return.  She doesn’t sign the tax return because she is not a legitimate tax preparer and she knows the information she used was fraudulent,” said Special Agent in Charge Ramsey E. Covington of IRS Criminal Investigation’s Houston Field Office. “Our partners at the U.S. Attorney’s Office work closely with us to identify and prosecute tax and other financial crimes. April 15 might be the last day of this tax season, but it’s not the last time financial criminals like her will be sentenced for their crimes.”

This case was investigated by the Internal Revenue Service – Criminal Investigations and prosecuted by Assistant U.S. Attorney Russell James.

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BEAUMONT, Texas – A Houston man and woman have been sentenced for federal firearm and drug violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Christopher Jay Johnson, Jr., 35, pleaded guilty on July 31, 2023 to being a felon in possession of a firearm and was sentenced to 108 months in federal prison today by U.S. District Judge Marcia Crone.  Lissette Elvira Guevara, 37, also of Houston, pleaded guilty the same day to possession of a controlled substance and was sentenced by Judge Crone last month to serve 113 months in prison.

According to information presented in court, on March 6, 2022, Bridge City police officers investigated a report of a suspicious vehicle parked at a business on Texas Avenue and found Johnson in the passenger seat with a fully loaded pistol on his lap.  The strong odor of marijuana led to a search of the vehicle resulting in the discovery of 40 grams of methamphetamine in Guevara’s belongings.  Further investigation revealed Johnson was previously convicted of aggravated robbery, felon in possession of a firearm, and controlled substance offenses in Montgomery County, and prohibited by federal law from possessing firearms or ammunition.  A federal grand jury indicted Johnson and Guevara on April 5, 2023.

“Guns and drugs are a bad combination,” said U.S. Attorney Damien M. Diggs. “We will always  support our local law enforcement partners in the investigation and prosecution of cases like this one that involve guns and dangerous repeat offenders. This is also a good reminder to the citizens in our district that if you ‘see something, say something.’ Here, a concerned citizen’s call pointed law enforcement to a threat they might have otherwise missed.”  

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case was investigated by the Bridge City Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorney John B. Ross.

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TYLER, Texas – A Jacksonville, Florida woman has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Sharena Seay, 39, pleaded guilty to money laundering before U.S. Magistrate Judge John D. Love on April 11, 2024.

According to information presented in court, Seay laundered the proceeds of her drug trafficking operations through cryptocurrency.  The defendant supplied alpha-Pyrrolidinopentiophenone (alpha-PVP), which is often called “flakka,” and similar synthetic cathinones, such as Eutylone or alpha-PiHP.  Seay distributed alpha-PVP and other controlled substances to various customers across the United States.  Customers who purchased controlled substances from Seay paid for their purchases with cash.  Seay laundered the cash proceeds through cryptocurrency in order to purchase more controlled substances on the dark web and to conceal her criminal activity.

Seay faces up to 20 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The cases were investigated by the U.S. Secret Service and the U.S. Postal Inspection Service with the assistance of Internal Revenue Service – Criminal Investigation and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and were prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and D. Ryan Locker.

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BEAUMONT, Texas – A Beaumont man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Jorge Luis Castelan, Jr., 32, pleaded guilty on April 13, 2023, to being a felon in possession of a firearm and was sentenced to 57 months in federal prison by U.S. District Judge Marcia Crone on April 4, 2024.

According to information presented in court, during the early morning hours of May 15, 2022, Beaumont police responded to a domestic disturbance on Dogwood Lane in Beaumont.  The 9-1-1 dispatcher advised the officers to look for a man who was armed and driving a silver pickup truck.  Moments later when the officers arrived they found Castelan next to a silver pickup in possession of an assault-style rifle equipped with a fully-loaded, large-capacity magazine.  After Castelan was taken into custody it was determined that he was previously convicted of aggravated robbery in Jefferson County.  A federal grand jury indicted Castelan on Oct. 5, 2022.  Under federal law, convicted felons are prohibited from owning or possessing firearms or ammunition. 

“This case is emblematic of our commitment to utilize our violent crime prosecutors and our partner agents at the Bureau of Alcohol, Tobacco, Firearms and Explosives to investigate and prosecute criminals who illegally possess guns in connection with domestic abuse,” said U.S. Attorney Damien M. Diggs.  “The long-lasting effects of domestic violence, dating violence and intimate partner violence are obviously amplified when firearms are involved.  In this case, the quick response of the Beaumont Police Department defused a potentially deadly situation.”     

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone.  On May 26, 2021, the department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case was investigated by the Beaumont Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorney John B. Ross.

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SHERMAN, Texas – A McKinney man has been sentenced for bankruptcy-related fraud in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Jacobie Travinski Johnson, 53, was convicted of concealing assets in a pending bankruptcy proceeding and was sentenced to 60 months in federal prison by U.S. District Judge Amos Mazzant on March 19, 2024.

According to information presented in court, Johnson filed a voluntary petition for Chapter 13 Bankruptcy in the Eastern District of Texas.  In order to take advantage of the relief offered through the bankruptcy process, Johnson was required to truthfully disclose his assets, including his accounts at any financial institution, to the bankruptcy court, the trustee, and his creditors.  Instead, Johnson concealed multiple accounts that he owned or controlled.  Johnson also concealed hundreds of thousands of dollars, which were proceeds from fraudulently obtained Paycheck Protection Program loans, that he deposited into the concealed accounts. 

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Sean J. Taylor.

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TEXARKANA, Texas – A Texarkana man has pleaded guilty to a child exploitation violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs. 

Brandon Neil Sams, 48, pleaded guilty on March 19, 2024, to coercion and enticement of a minor before U.S. Magistrate Judge James Boone Baxter.

According to court documents, while serving as a band instructor at Texas High School in Texarkana, Texas, Sams engaged in repeated attempts to coerce and entice several of his students to engage in sexual activity.  Sams admitted to engaging in sexual conduct with several minor victims, all of whom were his students at Texas High.  Sams would communicate with the students on social media and messaging applications to persuade, induce, entice, and coerce them to participate in sexual activity.

A federal grand jury returned an indictment charging Sams with federal child exploitation violations in September 2023.  He faces up to life in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case was investigated by the Department of Homeland Security-Homeland Security Investigations and the Texarkana Independent School District.  This case is being prosecuted by Assistant U.S. Attorney Robert Austin Wells.

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BEAUMONT, Texas – A Bon Wier man has been sentenced to more than 12 years in federal prison for trafficking drugs in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Charles Edward Isaac, 44, pleaded guilty to conspiracy to possess with intent to distribute methamphetamine and possession of a firearm by a prohibited person and was sentenced to 151 months in federal prison by U.S. District Judge Marcia A. Crone on March 4, 2024.

According to information presented in court, in March 2021, federal, state, and local law enforcement began an investigation into the distribution of methamphetamine in Newton County, Texas.  During the investigation, law enforcement conducted controlled purchases of narcotics from Isaac and executed a search warrant at his residence.  During the search, law enforcement recovered a firearm and additional narcotics.  Isaac is responsible for distributing more than 100 grams of methamphetamine throughout East Texas.

This case was investigated by the FBI; Bureau of Alcohol, Tobacco, Firearms, and Explosives; U.S. Drug Enforcement Administration Lab; Texas Department of Public Safety; Newton County Sheriff’s Office; and Orange County Sheriff’s Office.  This case was prosecuted by Assistant U.S. Attorney Jonathan Lee.

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Beaumont, Texas – A Mexican national illegally living in Dayton has been sentenced to prison for federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Margarita Torres Barajas, 50, pleaded guilty to making a false statement on a passport application and aggravated identity theft and was sentenced to 30 months in federal prison by U.S. District Judge Marcia Crone on March 4, 2024.                                           

According to information presented in court, on October 11, 2021, Barajas entered the U.S. Post Office in Beaumont to apply for a U.S. passport.  Barajas claimed to be a citizen of the United States while in fact, she was a citizen of Mexico.  Barajas used a social security card and Puerto Rican birth certificate she found in New York City to apply for the passport.  The social security card and birth certificate belonged to a U.S. citizen.  Barajas also used these items to apply for a state identification card from another state.

This case was investigated by the Calcasieu Parish Sheriff’s Department and U.S. Diplomatic Security Service.  This case was prosecuted by Assistant U.S. Attorney Reynaldo P. Morin.

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BEAUMONT, Texas – A Beaumont woman has been sentenced to federal prison for stealing mail in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Pamela Jo Rosas, 65, pleaded guilty to theft of mail by a postal employee and was sentenced to 37 months in federal prison by U.S. District Judge Marcia A. Crone on March 4, 2024.

According to information presented in court, in April 2020, postal inspectors began receiving complaints that a series of parcels containing valuable coins were missing after being placed in the post office for delivery.  Federal agents conducted surveillance and identified a postal employee, Pamela Jo Rosas, as a subject involved in the theft after viewing her handling packages in a suspicious manner.  Rosas was also found in possession of several pieces of stolen mail packages after leaving work.  Rosas admitted to stealing many items from the post office during the previous three to four years.  Agents were able to recover hundreds of valuable coins from her apartment, along with other items Rosas had stolen from the mail during the course of her employment. 

This case was investigated by the U.S. Postal Inspection Service-OIG and prosecuted by Assistant U.S. Attorney Russell James.

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MARSHALL, Texas – A Marshall man has been sentenced for a federal income tax violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Boyd Lynn Butcher, 51, pleaded guilty to aiding and assisting in the preparation of false tax returns and was sentenced to 36 months in federal prison by U.S. District Judge Rodney Gilstrap on Feb. 27, 2024.  Butcher was also ordered to pay restitution in the amount of $317,252.00.

According to information presented in court, between 2015 and 2017, Butcher operated a tax preparer service under the name Boyd’s Tax Service.  During that time, he prepared more than 450 federal tax returns for third parties in exchange for a fee even though he was not authorized by the IRS to prepare tax returns for others.  When preparing many of those returns, Butcher created false or fraudulent information to generate unwarranted tax refunds.  In total, IRS determined that Butcher caused a tax harm to the IRS of more than $317,252.00.  For example, Butcher prepared a 2015 tax return using tax software designed for taxpayers who self-prepare returns.  The return did not reflect the fact that Butcher had prepared and filed it on behalf of another individual.  The return falsely and fraudulently stated that the taxpayer was entitled under the provisions of federal laws to claim car and truck expenses from a farming business.  Butcher admitted that he knew that the statement in the return was false and fraudulent because the taxpayer did not have a farming business.  Butcher admitted that he knew the return was false and that he had a duty to prepare returns in a lawful manner. 

“Mr. Butcher’s fraudulent actions, which included fabricating deductions that were false and misleading, not only abused the trust of sixteen people who relied on Mr. Butcher’s services, but also undermined the very foundations of our tax and government systems,” said U.S. Attorney Damien M. Diggs.  “Butcher effectively stole $300,000 from the American people.  We appreciate the hard work of the Internal Revenue Service as we continue to work with our partners to uphold the values of justice and fairness.”

“Boyd Butcher took advantage of those who trusted him to prepare their tax by filing incorrect, misleading, and false information to inflate their returns,” said Christopher J. Altemus Jr., special agent in charge of the IRS Criminal Investigation’s Dallas Field Office. “Mr. Butcher’s actions amount to stealing from the Federal Government and his sentencing holds him accountable for his actions. In addition to the three years he will spend in prison, he must pay restitution of more than $300,000 for the tax harm done to his 16 victims.”

The case was investigated by the Internal Revenue Service-Criminal Investigation and prosecuted by Assistant U.S. Attorney Dustin Farahnak.

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SHERMAN, Texas – A Celina physician and eight others have been indicted for federal drug distribution violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today. 

Kevin Shelton, 53, was named in an indictment returned by a federal grand jury in February 2024, charging him with possession with conspiracy to possess with intent to manufacture and distribute controlled substances and conspiracy to commit money laundering. 

The following individuals were also charged in the indictment:

Stephanie Shelton, 48, of Celina;

Jai Ellis, 41, of Celina;

Clay York, 50, of Rowlett;

Stephanie York, 49, of Rowlett;

Jeffrey Cornwell, 47, of McKinney;

Raman Bhaumik, 45, of Plano;

Prasenjit Bhaumik, 48, of Plano; and

David Pokorny, 62, of Sherman.

The defendants made initial appearances on Feb. 29, 2024 before U.S. District Judge Sean Jordan.   

According to the indictment and information presented in court, the defendants are alleged to have conspired to possess with the intent to distribute controlled substances, including Hydrocodone; Oxandrolone; Nandrolone; Phentermine; Alprazolam; Diazepam; Testosterone; Tramadol; Adderall; and Dextroamphetamine.  The defendants also conspired to commit the offense of money laundering.

If convicted, the defendants each face up to 20 years in federal prison. 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. 

This case is being investigated by the U.S. Drug Enforcement Administration and the Internal Revenue Service – Criminal Investigation.  This case is being prosecuted by assistant U.S. attorneys in Plano and Sherman.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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BEAUMONT, Texas – A Beaumont man has pleaded guilty to federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Brandon Tyrone Mayberry, 21, pleaded guilty to Hobbs Act robbery and brandishing a firearm during a crime of violence before U.S. Magistrate Judge Christine L. Stetson on Feb. 15, 2024.

According to court documents, in April and May of 2023, Mayberry and Daniel James Leatherwood robbed several businesses in and around Beaumont at gunpoint. The robberies included two Game X Change stores, a Shell gas station, an Express Mart convenience store, and a Cindie’s lingerie store. 

Mayberry was indicted by a federal grand jury on Nov. 1, 2023.  He faces up to 20 years in federal prison on the armed robbery charge and an additional seven years for brandishing a firearm during the commission of that crime.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the FBI, Beaumont Police Department, Nederland Police Department, and Liberty Police Department and prosecuted by Special Assistant U.S. Attorney Tommy L. Coleman with the cooperation of the Jefferson County District Attorney’s Office.

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BEAUMONT, Texas– An Orange, Texas man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Lance Steven Allen Jefferson, 36, pleaded guilty to being a felon in possession of a firearm and was sentenced to 30 months in federal prison by U.S. District Judge Marcia A. Crone on Feb. 1, 2024.

According to information presented in court, on May 11, 2023, Jefferson was stopped by law enforcement officers for a traffic violation on IH-10 in Beaumont.  Jefferson told officers he had marijuana in the center console of the vehicle as well as a firearm under the seat.  During a search of Jefferson’s vehicle, officers discovered a loaded pistol under the driver’s seat that had been reported stolen in Orange.  Further investigation revealed Jefferson was a previously convicted felon and prohibited from owning or possessing firearms or ammunition.      

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Beaumont Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Matt Quinn.

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TYLER, Texas– A Tyler man has been sentenced to federal prison for firearms and drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Juan Espinoza, Jr., 27, pleaded guilty to possessing a firearm after having been previously convicted of a crime of family violence and possession with intent to distribute marijuana and was sentenced to 48 months in federal prison by U.S. District Judge Jeremy D. Kernodle on Jan. 31, 2024.

According to information presented in court, on Feb. 16, 2022, a federal search warrant was executed at Espinoza’s Tyler residence during which officers discovered approximately 4,600 grams of marijuana, 476 grams of Psilocybin, five semi-automatic pistols, a semi-automatic rifle, a shotgun, multiple rounds of ammunition, and $12,145.00 in cash.  Espinoza was convicted of a misdemeanor crime of domestic violence in Smith County in 2016 and prohibited by federal law of possessing firearms or ammunition.      

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Jim Noble.

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PLANO, Texas – Four individuals, including two physicians, have been indicted in the Eastern District of Texas charged with federal violations involving a university athletic billing scheme, announced U.S. Attorney Damien M. Diggs today.

Mouzon Bass, III, also known as Muzzy Bass, 58, of Highland Park; Lance West Wilson, 54, of Allen; and Robert Brent Scott, 59, of La Quinta, CA; were indicted by a federal grand jury in January 2024 and charged with conspiring to commit wire fraud, conspiring to commit healthcare fraud, and conspiring to commit money laundering. 

In a separate indictment returned in October 2023, Kyle Kelly Carter, 61, of Keller, was charged with conspiring to commit wire fraud.  The defendants have all made initial appearances in federal court this month.

According to the indictments, from approximately 2014 through 2023, the defendants are alleged to have been involved in a university-centered athletic department billing scheme.  Bass and Wilson used their company, Vivature, to submit false claims to private insurance carriers representing that physicians, like Scott and Carter, were providing medical services for injured student-athletes at universities across the country.  In reality, these physicians did not see or treat these student-athletes, and in many instances, were physically hundreds of miles away from where the student-athletes were receiving treatment.  The services were actually performed by athletic trainers employed by the universities’ athletic departments—who, most times, were specifically excluded from insurance companies’ reimbursement policies.  At the direction of Bass and Wilson, Vivature submitted thousands of false claims to the insurance companies, named Scott, Carter, and other physicians as the servicing providers, and used their NPI numbers on the claims’ paperwork.  In exchange for allowing the fraudulent use of their NPI and credentials, Vivature made regular payments to Scott, Carter, and other physicians. 

 A separate conspiracy involved only defendants Bass, Wilson, and Scott, who executed a scheme to fraudulently obtain Health Resources and Services Administration (“HRSA”) government funds earmarked for COVID-19 testing provided to uninsured Americans.  The defendants partnered with international resorts hosting American travelers abroad, offering to manage the billing and claims process for COVID-19 testing provided to these American travelers.  Then, the defendants submitted thousands of reimbursement claims to HRSA for such travelers, even though such travelers were privately insured and ineligible under the HRSA program. 

In total, the defendants are alleged to have collectively obtained over $70 million from the two schemes.  With these funds, they paid themselves millions of dollars; purchased real property including a multi-million dollar home, lakehouse, and international residence; and bought a multi-million dollar yacht. 

This case is being investigated by the FBI and prosecuted by assistant U.S. attorneys in Plano.

A grand jury indictment is not evidence of guilt.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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BEAUMONT, Texas – A Brooklyn, NY man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Ahmed Abdalla Allam, 26, pleaded guilty to possession of a firearm in a school zone and was sentenced to 60 months in federal prison, the statutory maximum, by U.S. District Judge Marcia A. Crone on Jan. 30, 2024.

According to information presented in court, Allam, who is from New York, purchased an AR-15 style rifle in Pennsylvania, two days after a counterterrorism operation resulted in the death of Al Qaeda leader, Ayman al-Zawahiri. Allam then undertook a trek throughout the United States that ended in Beaumont, Texas, where he parked his car next to a Christian elementary school.

On January 29, local police searched Allam’s vehicle following a traffic stop and found him in possession of the AR-15, a 30-round magazine, and 150 rounds of ammunition. Chillingly, Allam penned writings that indicated he was planning to murder children and their parents in retaliation for the counter-terrorism work of the United States. The day he was arrested, Allam, told a parent that he was on a “mission” and that “no one would ever see him again.”       

“The citizens of Beaumont and the Saint Anthony’s community should be proud that their collective vigilance in reporting Mr. Allam’s suspicious activities—parking his SUV outside of a Catholic school for hours at a time over the course of several days, while armed with an AR-15 rifle and multiple rounds of ammunition—prevented what would have been a mass shooting,” said U.S. Attorney Damien M. Diggs.  “The work of the Beaumont Police Department and our federal law enforcement partners should be commended, as they worked together to prevent what was sure to be a sad day in Beaumont and the nation.”   

“Vigilant Beaumont citizens took the phrase ‘See Something, Say Something,’ to heart, potentially saving numerous lives and uncovering Mr. Allam’s sinister motivations,” said FBI Houston Special Agent in Charge Douglas Williams. “Days after a U.S. military operation killed a top al-Qaeda leader, Ahmed Allam drove to Beaumont, parked his car near a Catholic school, and observed children and their parents while possessing a rifle and hundreds of bullets. The quick reporting of Allam’s suspicious activities to law enforcement by community members allowed FBI Beaumont counterterrorism agents, Beaumont police officers, and ATF investigators to swiftly respond and disrupt what could have been a devastating retaliatory attack.”

“This incident serves as a prime example of the success of the ‘See Something, Say Something’ campaign,” said Acting ATF SAC Francisco Ortega.  “ATF was able to work hand in hand with our law enforcement partners to prevent a potential violent crime. It is through the community’s collective efforts that we can maintain a safe and secure environment for everyone. We encourage all members of our community to remain vigilant and report any suspicious activities to law enforcement.” 

“The Beaumont Police Department is committed to the safety of all of our citizens, especially our children,” said Beaumont Police Chief Jimmy Singletary.  “This case is a perfect example of the importance of the ‘See Something, Say Something’ campaign.  It takes all of us working together to be vigilant and report suspicious activity.  Protecting our children is a mission everyone should stand behind. BPD will continue to work with our Federal Law Enforcement partners to ensure swift justice for anyone who jeopardizes the safety of the most vulnerable in our community.  I would like to commend the leadership of Saint Anthony for their diligence and steadfastness in protecting their students.” 

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case was investigated by the FBI's Beaumont Resident Agency; Bureau of Alcohol, Tobacco, Firearms and Explosives; Beaumont Police Department; Jefferson County District Attorney's Office; Port Arthur Fire Department, and Montgomery County Fire Marshall.  This case was prosecuted by Assistant U.S. Attorneys John B. Ross and Joseph R. Batte.

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SHERMAN, Texas– A Terrell man was sentenced to federal prison for defrauding investors in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Michael Disman, 41, pleaded guilty to wire fraud charges and was sentenced to 20 years in federal prison by U.S. District Judge Amos Mazzant on Jan. 25, 2024.  Disman was ordered to pay restitution of approximately $2.7 million to his victims.

According to information presented in court, between January 2018 and March 2022, Disman operated an investment fraud scheme using various companies he controlled, including “Dexter Development” and “Disman Energy.”  Disman solicited funds from victim investors for purported lucrative land development projects, when in reality, those projects were non-existent and the investor funds were spent elsewhere.  To execute his scheme, Disman made various material misrepresentations about investor payouts and the use of investor money, executing sham contracts and sharing real estate paperwork to add legitimacy.   Disman actually used the investor funds for various non-business purposes, including ATM cash withdrawals and drug purchases.  In total, Disman defrauded at least 17 victim investors and caused at least $2.7 million in losses. 

This case was investigated by the FBI and prosecuted by assistant U.S. attorneys in the Plano office.

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BEAUMONT, Texas – A Beaumont man has pleaded guilty to federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Daniel James Leatherwood, 21, pleaded guilty to Hobbs Act robbery and brandishing a firearm during a crime of violence before U.S. Magistrate Judge Zack Hawthorn on Jan. 25, 2024.

According to court documents, in April and May of 2023, Leatherwood and another individual robbed several businesses in and around Beaumont at gunpoint. The robberies included two Game X Change stores, a Shell gas station, an Express Mart convenience store, and a Cindie’s lingerie store. 

Leatherwood was indicted by a federal grand jury on Nov. 1, 2023.  He faces up to 20 years in federal prison on the armed robbery charge and an additional seven years for brandishing a firearm during the commission of that crime.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the FBI, Beaumont Police Department, Nederland Police Department, Liberty Police Department and prosecuted by Special Assistant U.S. Attorney Tommy L. Coleman with the cooperation of the Jefferson County District Attorney’s Office.

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SHERMAN, Texas – A Wills Point woman has been sentenced to federal prison for fraud violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Lisa Lynn Smith, 62, pleaded guilty to wire fraud and was sentenced to 20 months in federal prison today by U.S. District Judge Amos Mazzant.  Smith was also ordered to pay restitution in the amount of $47,236.94 to her elderly victim.

According to information presented in court, Smith carried out a scheme to defraud an elderly Plano man by telling him lies about urgent personal and family expenses that she was facing.  Smith also convinced the victim that she was going to receive a lawsuit settlement for over $2.5 million, and that she would use the money to pay the victim back for the money that he was giving to her.  The victim would provide funds to Smith by various means including allowing Smith access to a credit card, which she used for various purposes such as repeatedly renting cars for her family members. In fact, Smith’s lawsuit paid nothing close to this amount and Smith was using the money for personal and family expenses that she did not disclose to the victim.  

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 10am-6pm Eastern Time, Monday-Friday. English, Spanish, and other languages are available.   

This case was investigated by the Federal Bureau of Investigation’s Frisco Resident Agency and prosecuted by Assistant U.S. attorneys in the Plano office.

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PLANO, Texas – A Fort Worth man has been indicted for federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today. 

Jimmie Jalen Humphries, 28, was named in an indictment returned by a federal grand jury in November 2023, charging him with possession with intent to distribute fentanyl.  Humphries made his initial appearance on January17, 2024 before U.S. Magistrate Judge Kimberly C. Priest Johnson.  Humphries is set for a detention hearing before Judge Johnson on January 22.   

According to the indictment and information presented in court, in April 2023, Humphries mailed approximately 5,000 fentanyl pills from Frisco, Texas to the Washington, DC area.  Investigators from the U.S. Postal Inspection Service and the Drug Enforcement Administration later identified Humphries as the source of the fentanyl.  Humphries was on supervised release for federal firearms violations out of Michigan at the time of the alleged offense.  During his arrest, a search warrant was executed on Humphries’ residence, resulting in the seizure of fentanyl pills, large sums of U.S. currency, ammunition, and extended high-capacity pistol magazines.

If convicted, Humphries faces from 10 years to life in federal prison.

This case is being investigated by the U.S. Postal Inspection Service and the U.S. Drug Enforcement Administration and is being prosecuted by Assistant U.S. Attorney Lesley Brooks.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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SHERMAN, Texas – A Leonard, Texas man has been sentenced to federal prison for robbing multiple banks in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs. 

Kevin Long, 31, pleaded guilty to bank robbery and was sentenced to 70 months in federal prison by U.S. District Judge Sean Jordan on January 18, 2024.  Long was also ordered to pay restitution of $573,000.

According to information presented in court, Long robbed multiple banks in East Texas between 2020 and 2021.  During the robberies he passed threatening notes to bank employees, he physically restrained bank employees, and he stole over $550,000.  Those robberies include: CapTex Bank in Bonham on Jan. 31, 2020; Financial Bank in Farmersville on August 11, 2020; Bancorp South Bank in Tom Bean on Oct. 16, 2020; Commercial Bank in Farmerville on August 13, 2021; and First United Bank in Leonard on August 20, 2021.

This case was investigated by the Federal Bureau of Investigation, Bonham Police Department, Farmersville Police Department, Grayson County Sheriff’s Office, Sherman Police Department, Allen Police Department, Leonard Police Department, Bells Police Department, Tom Bean Police Department, and Texas Department of Public Safety. 

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BEAUMONT, Texas– An Orange, Texas man has been sentenced to federal prison for drug trafficking in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Roy Allen John, Jr., 47, pleaded guilty to possession with intent to distribute methamphetamine and possession of a firearm in relation to a drug trafficking crime and was sentenced to 122 months in federal prison by U.S. District Judge Marcia A. Crone on Jan. 16, 2024.

According to information presented in court, in January of 2022, John was arrested after selling approximately 27.89 grams of methamphetamine to another person for $350 cash in the Home Depot parking lot in Orange.  An additional 123 grams of methamphetamine and three firearms were found in the vehicle John was driving.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Orange Police Department and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

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BEAUMONT, Texas– A Houston man has been sentenced to federal prison for bank robbery in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Michael Raymond Karras, 65, pleaded guilty to bank robbery and was sentenced to 188 months in federal prison by U.S. District Judge Marcia Crone on Jan. 9, 2024.  

According to information presented in court, on June 6, 2023, Karras robbed the Chase Bank on Eastex Freeway in Beaumont.  Within minutes of the robbery, Karras was located at a convenience store wearing a trench coat and driving the vehicle described in the robbery.  After detaining Karras and obtaining consent to search his vehicle, officers discovered $2,870.00 in cash and the handwritten note Karras had used in the robbery. 

This case was investigated by the Beaumont Police Department and the FBI and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

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BEAUMONT, Texas– Two Jefferson County men have been sentenced to federal prison in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Mikale Rashad Bolton, 21, of Beaumont, pleaded guilty to carjacking and was sentenced to 180 months in federal prison by U.S. District Judge Marcia A. Crone on Jan. 8, 2024.

According to information presented in court, on June 25, 2022, local law enforcement responded to the scene of a carjacking near French Road in Beaumont.  The investigation revealed that Bolton approached a vehicle and asked the driver for a cigarette lighter.  After the driver handed the lighter to Bolton, Bolton pulled out a firearm and pointed it at the driver’s head.  Bolton ordered the driver to exit the vehicle.  The driver was told not to contact police or Bolton would return and kill him.  Bolton fled the scene in the stolen vehicle.  This case was investigated by the FBI and the Beaumont Police Department.

Jordan Malik Bronnon, 30, of Port Arthur pleaded guilty to being a felon in possession of a firearm and was sentenced to 40 months in federal prison by Judge Crone on Jan. 8, 2024.

According to information presented in court, on May 23, 2022, local law enforcement conducted a traffic stop on a vehicle in which Bronnon was a passenger.  The driver consented to a search of the vehicle, during which a backpack was located that contained various pieces of paperwork with Bronnon’s name and a rifle magazine containing ammunition.  A rifle was also located on the rear passenger floorboard.  This case was investigated by the ATF and the Port Arthur Police Department.  Bronnon was a convicted felon and prohibited by federal law from owning or possessing firearms or ammunition. 

These cases were prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

These cases were prosecuted by Assistant U.S. Attorney Russell James.

# # #

PLANO, Texas– A Melissa woman has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Nnenna Mary Jones, 40, pleaded guilty to wire fraud and was sentenced to 14 months in federal prison by U.S. District Judge Sean D. Jordan on Dec. 20, 2023.  Jones was also ordered to pay restitution in the amount of $16,950.

According to information presented in court, the Texas Muslim Women’s Foundation, a 501(c)(3) public charity in Plano, Texas, serves Muslim women and their families who are survivors of domestic and family violence.  The Foundation offers its clients in-house legal assistance with the immigration process, among other services.  The Foundation advertises that it offers its services—including immigration legal assistance—free of charge.  Jones worked for the Foundation as a paralegal and was a Department of Justice Accredited Representative, which allowed her to represent clients in court in immigration matters with the Department of Homeland Security.  She was also a licensed attorney in Nigeria before moving to the United States.

The Foundation’s legal team routinely requests waivers of certain fees its clients incur during the immigration process, and most of its clients qualify for these waivers.  If the Foundation’s clients do not qualify for a waiver of the immigration fees, then at times the Foundation pays the fee.  However, Jones represented to clients of the Foundation that they were required to pay certain fees to the government in relation to their immigration proceedings.  In reality, the clients’ fees had either been waived by the government or paid by the Foundation.  Clients wrote checks and obtained money orders in the amounts of the fees Jones told them they owed to the government.  However, Jones instructed the clients to leave the “pay to” line on the checks and money orders blank.  Jones photocopied the clients’ checks and money orders, wrote “U.S. Department of Homeland Security” on the “pay to” line of the photocopied checks and money orders, and placed the photocopies in the clients’ files.  Jones then wrote her own name in the “pay to” line of the clients’ original checks and money orders and cashed them or deposited them into her own accounts.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Sean J. Taylor. 

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TYLER, Texas – An Oklahoma man has been sentenced for federal wildlife violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.               

Dusty Caudill, 37, of Ardmore, OK, pleaded guilty to the transportation of wildlife in violation of state law – a violation of the U.S. Lacey Act – and was sentenced to 12 months in federal prison today by U.S. District Judge Jeremy D. Kernodle on Dec. 19, 2023.

According to information presented in court, in February of 2021 Caudill conspired with co-defendants David Bartlett and Darryl Garcia to transport stolen African elephant ivory tusks from Ardmore, Oklahoma to Tyler, Texas for sale.  The tusks had been stolen in the burglary of a residence in Ada, Oklahoma in late 2020.  Bartlett negotiated the sale of the tusks with a person he believed to be a resident of Houston, Texas for $10,700.00. 

The investigation revealed that on February 17, 2021 Caudill and Garcia removed the ivory tusks from the trunk of Caudill’s car in Ardmore and placed them in Garcia’s car.  Garcia then picked up Bartlett and the two of them drove the tusks to Tyler, Texas where they believed they would be meeting with the buyer from Houston.   Instead, they were met by federal wildlife agents.

African elephants are a protected wildlife species under the federal endangered species act.  The term “wildlife” includes any part of the animal.  The U.S. Lacey Act prohibits the transportation of endangered species, valued at more than $350.00 in interstate commerce in violation of federal or state law.

This case was investigated by special agents with the U.S. Fish and Wildlife Services and prosecuted by Assistant U.S. Attorney Jim Noble.

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PLANO, Texas – Three individuals have been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today. 

Marina Brooks, 67; Charles “Chuck” Brooks, 71; and Crystal Brooks, 35, were named in the two-count indictment returned by a federal grand jury on Dec. 14, 2023, in the Eastern District of Texas.  The indictment charges the defendants with conspiracy to commit wire fraud and conspiracy to commit money laundering.  The defendants made their initial appearances today before U.S. Magistrate Judge Kimberly C. Priest Johnson.   

The defendants are alleged to have engaged in a large-scale investment fraud scheme targeting individuals in the Mexican-American community.  According to the indictment, the defendants and their co-conspirators fraudulently solicited “investments” for a multitude of schemes, such as concert series and cryptocurrency-related projects.  Through marketing seminars, radio advertisements, and in-person meetings, the defendants fraudulently represented that these investment opportunities would yield significant returns relative to market standards.  However, the defendants are alleged to have transferred the victim investor funds to other business and personal accounts, took out commissions and cash withdrawals, and lost over 95% of the funds taken from victim investors.  In all, the defendants fraudulently took at least $9.5 million from at least 100 victim investors.

If convicted, the defendants each face up to 20 years in federal prison.

This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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SHERMAN, Texas – A Colombian national has been sentenced to 25 years in federal prison for drug trafficking violations, announced Eastern District of Texas U.S. Attorney Damien M. Diggs today.

Leonar Molina-Ferro, also known as Michel, 47, was convicted of conspiracy to manufacture and distribute more than five kilograms of cocaine knowing it would be imported and distributed in the United States.  Molina-Ferro was sentenced to 300 months in federal prison on December 19, 2023, by U.S. District Judge Amos L. Mazzant.  

According to information presented in court, Molina-Ferro was a cocaine trafficker who assisted a Colombian-based drug cartel responsible for distributing large quantities of cocaine via land, sea, and air throughout South and Central America.  The bulk of these shipments were destined for the United States.  Molina-Ferro’s primary role was to coordinate maritime shipments of cocaine from Colombia to Panama, Costa Rica, Nicaragua, and Honduras.  In his role, he directed several persons to acquire, transport, and distribute ton quantities of cocaine.  Molina-Ferro was arrested at the request of the United States for extradition at his apartment in Medellin, Colombia on August 14, 2018.  During the arrest operation, Molina-Ferro opened fire on Colombian National Police Officers, wounding the first officer to make entry into the apartment.  That officer was subsequently honored by the Drug Enforcement Administration and U.S. Attorney’s Office in the Eastern District of Texas for his bravery in the fight against narcotics trafficking.  Molina-Ferro was subsequently extradited to the United States from Colombia on December 2, 2020.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case was investigated by the Drug Enforcement Administration and the North Texas OCDETF Strike Force and prosecuted by Assistant U.S. Attorney Wes Wynne.  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 Molina-Ferro.

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PLANO, Texas – Three North Texas individuals have been charged with sex trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.              

William McKinnley Garland, 40, of Plano; Jalen Alexander Bobo, 24, of Dallas; and Robberta Marie Khan, 27, of Euless, have been charged by an indictment returned by a grand jury in the Eastern District of Texas.  All three were charged with coercion and enticement and aiding and abetting.  Garland and Bobo are also charged with conspiracy to commit sex trafficking by force, fraud, or coercion. 

This indictment is the culmination of a years-long investigation by the Plano Police Department into a sex trafficking organization run by Garland and others.  Evidence revealed that young women were allegedly recruited to work for Garland as escorts.  However, once enticed, they were allegedly forced into performing commercial sex by Garland, or those working under his direction, often through violence and threats of violence.  Evidence obtained by law enforcement revealed that the organization operated throughout Collin County.  A federal search warrant was executed at Garland’s Plano residence on December 11, 2023, at which time Garland was taken into custody.

If convicted, Garland and Bobo face a maximum term of life in federal prison. Khan may be sentenced to up to 20 years in federal prison.

“The Eastern District of Texas is proud to work with our local and federal partners to stand against the exploitation of vulnerable persons and hold human traffickers accountable,” said U.S. Attorney Damien M. Diggs.  “This indictment represents the first step toward dismantling an organization in which individuals profited from commercial sex, including from women who were threatened or forced into prostitution.”

According to Plano Police Department Chief Ed Drain, “I am extremely pleased with the collaboration and diligence on the part of our Plano Police Detectives, our FBI partners, and the United States Attorney's office in this investigation.  These investigative efforts brought several violent offenders to justice and restored the peace, tranquility, and safety, not only to our community, but to the victims of these egregious crimes.   Our continuing work will leave no stone unturned in an effort to identify those who aid in perpetrating these offenses and to provide assistance and justice to those who fall victim to these offenders.”

“Human trafficking is one of the most heinous crimes the FBI encounters and unfortunately, these encounters are far more common than most people realize,” said Dallas FBI Special Agent in Charge Chad Yarbrough. “Collaboration with the Plano Police Department and U.S. Attorney’s Office was critical to identify and arrest the alleged traffickers and as we continue the investigation and move forward to prosecute the perpetrators, we hope to identify additional victims in order to provide the services and support they need to regain their dignity, identity and sense of self.”

Investigators believe that there are other individuals who worked for or had interactions with this organization. Any members of the public with information about this case or possible victims are urged to contact the Plano Police Department at (972) 941-2044.

This case is being investigated by the Plano Police Department and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Marisa J. Miller.

It is important to note that an indictment or arrest should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.

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SHERMAN, Texas – U.S. Attorney Damien M. Diggs of the Eastern District of Texas announced today that Homestar North America, LLC has agreed to pay $798,334 to resolve allegations that it violated the False Claims Act by failing to pay customs duties owed for furniture imports from China.

Customs laws require importers to pay duties determined by the actual value of the goods imported. Liability to pay duties arises immediately and automatically upon the importation of goods into the United States. This settlement resolves allegations that Homestar North America, LLC and its parent company Homestar Corporation, conspired to underreport the value of imported goods delivered to Homestar North America, LLC in the United States following the two increases on Section 301 tariffs for certain products manufactured in China under the Harmonized Tariff Schedule of the United States. The two increases respectively took effect September 24, 2018 and June 15, 2019.

Specifically, the government alleged that from September 2018 through December 2022, falsified invoices were created and submitted to the United States Customs and Border Protection (CBP) containing false, lower values for the goods Homestar North America, LLC received from Homestar Corporation, its Chinese parent company, to avoid payment of the increased duties owed. The government contended that a second set of invoices containing the true, actual value of the goods imported were withheld from CBP but were then used to ensure that Homestar North America, LLC paid its parent company and supplier the actual value of the imported goods. The government alleged that this false invoicing practice resulted in undervaluation of goods imported into the United States, which resulted in a loss of revenue to the United States.

“Imported goods are necessary for the consumer-economy in the United States. However, companies that wish to gain access to the United States' markets must comply with all laws regarding the import of their goods, including the obligation to disclose the actual value of imported goods and to pay the duties owed as a result of importation,” said U.S. Attorney Damien M. Diggs. “Instead of complying with those obligations, Homestar chose to disregard its obligations and improve its bottom line. Our office will aggressively pursue any company that similarly chooses its bottom line over compliance with the law.”

“CBP’s Consumer Products and Mass Merchandising Center of Excellence and Expertise worked in collaboration with the U.S. Attorney’s Office to review thousands of documents, hundreds of entry summaries, and analyzed financial reports provided by Homestar, as relevant to the undervaluation and payment allegations,” said Director Gregory Alvarez of the CBP Atlanta Field Office.  “CBP is proud of the investigative work and analysis done by its employees on this case and will continue to work collaboratively with inter-agency stakeholders to safeguard our nation’s economic security.”

The civil settlement resolves claims brought by a relator under the qui tam or whistleblower provisions of the False Claims Act. These provisions allow a private party, known as a relator, to file an action on behalf of the United States and receive a portion of any recovery. The qui tam action is captioned U.S. ex rel. Larry J. Edwards, Jr. v. Homestar North America, LLC, Cause No. 4:21-cv-00148 (E.D. Tex.). As part of today’s resolution, the whistleblower will receive approximately $151,683.

The resolution obtained was the result of a coordinated effort between the U.S. Attorney’s Office, Eastern District of Texas with assistance from CBP and the U.S. Immigration and Customs Enforcement Homeland Security Investigations.

The matter was handled by Assistant U.S. Attorney Betty Young for the Eastern District of Texas.  

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

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SHERMAN, Texas – A Carrollton man has been convicted of federal child pornography violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Eric Victor Henry Blood, 43, was found guilty by a jury of three counts of transportation of child pornography and one count of possession of child pornography following a trial before U.S. District Judge Amos L. Mazzant on December 12, 2023.

According to information presented in court, Blood came to the attention of law enforcement when Google reported that his email address had been used to upload images and videos of child pornography onto a cloud storage account.  Homeland Security Investigations special agents served a federal search warrant at Blood’s residence in Carrollton in May 2022, during which Blood admitted to using that Google account.  He also ultimately admitted to accessing and possessing child pornography.  Agents located child pornography files on multiple electronic devices he owned and possessed.  Blood was charged with three counts of transporting child pornography and one count of possessing child pornography.

The case proceeded to trial on December 11, 2023 and, at the conclusion, the jury returned guilty verdicts on all counts.

Under federal statutes, Blood faces up to 20 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorneys Marisa Miller and Lesley Brooks.

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BEAUMONT, Texas – An Amarillo man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Jamelle Antoine Parker, 35, pleaded guilty to carjacking and Hobbs Act Robbery before U.S. District Judge Marcia A. Crone on Dec. 11, 2023.

According to information presented in court, on April 1, 2023, Parker approached a woman putting air in her tires at a gas station on Washington Boulevard in Beaumont.  Parker demanded the car from the woman.  While doing so, he reached in his waistband for what the woman believed to be a firearm.  She ran to a nearby store as Parker fled in her vehicle.  Parker drove the stolen vehicle to the Criss Cross convenience store on Martin Luther King Jr. Parkway in Beaumont.  Parker entered the store, told the clerk he had a firearm, and demanded money from the register or the clerk would be killed.  Parker obtained money from the clerk and fled the scene.  Parker then drove the stolen vehicle to Lufkin where he crashed the vehicle into the Big's convenience store on West Frank, Avenue.  Parker entered that convenience store and told the clerk he had a firearm and demanded and obtained money from the clerk.  Parker fled on foot towards a nearby Whataburger.  Parker approached a vehicle in the drive-through lane of the Whataburger and demanded the driver’s vehicle, while asking the driver if he “wanted to die today.”  The driver exited the vehicle, and Parker grabbed him by the neck and pushed him aside.  Parker began speeding away in the stolen vehicle, in the direction of a responding officer.  Parker was shot by the officer in the legs with non-life threatening wounds.  Parker crashed the vehicle after a brief chase and was taken into custody. 

Parker was indicted by a federal grand jury on May 3, 2023.  He faces up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Beaumont Police Department, and the Lufkin Police Department and prosecuted by Assistant U.S. Attorney Russell James.

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TYLER, Texas – A Tyler man has been sentenced to more than 11 years in federal prison for multiple violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today. 

Derek Robert Hamm, 39, pleaded guilty to wire fraud, money laundering, violating the Stolen Valor Act, using a fraudulent military discharge certificate, and being a felon in possession of firearms and ammunition.  Hamm was sentenced to 135 months in federal prison on Dec. 7, 2023, by U.S. District Judge J. Campbell Barker.  Hamm’s sentence was the largest ever imposed in relation to a fraud scheme involving the Stolen Valor Act.

The Stolen Valor Act of 2013 makes it illegal to fraudulently wear medals, embellish rank, or make false claims of military service to obtain money, employment, property, or some other tangible benefit.  As part of his sentence Hamm agreed to pay restitution of at least $2.3 million and forfeiture of the proceeds of his criminal conduct, including jewelry, automobiles, and cash proceeds in the amount of $1,675,000.

According to court documents, Hamm invented a persona of being a wealthy and successful war hero.  Hamm held himself out to be a former member of the Army Special Forces who had served multiple tours of duty in Iraq, Afghanistan, and other countries.  He claimed to have been awarded a Purple Heart, Bronze Star, Silver Star, and Distinguished Service Cross for his service.  Hamm also represented that he was related to Harold Hamm, the billionaire oilman in Oklahoma, which he claimed gave him access to financial resources and oil industry expertise.  Through this larger-than-life persona, Hamm created an extensive network of friends who introduced him to potential investors.  Those investors believed Hamm’s claims and invested in what they expected to be worthwhile ventures spearheaded by a trustworthy and capable entrepreneur.

In reality, Derek Hamm was nothing of the sort.  Hamm was not a decorated war hero.  He was no oil industry tycoon.  He was not related to Harold Hamm.  He did not spend investors’ funds on the latest oil industry technology or new oil wells.  Within hours of receiving investors’ funds, Hamm spent their money on himself and his family, including expensive jewelry, vehicles, and vacations to expensive resorts on private charter planes.  All the while, Hamm represented to investors that he had invested their money in successful oil industry projects.  He continued to pump investors to keep sending him money even as their investments failed to produce any returns.

“As the son of a veteran, I have a deep appreciation for the importance of military service and recognizing the valor of our servicemen and women,” said U.S. Attorney Damien M. Diggs.  “The Stolen Valor Act protects and honors veterans and the sacrifices they’ve made to our country.  When people make false claims of military heroism, they diminish the true acts of bravery and heroism that Americans celebrate and tribute.  Stolen valor is an insult to all those who stood in harm’s way and earned their decorations.  By using stolen valor to steal from people, Hamm preyed on the victims’ love of this country and their reverence for American heroes who earned such real military awards through their sacrifices to this country.” 

“The defendant invented a successful and noble persona to disguise his failed business and dishonest intentions in order to steal millions of dollars from unsuspecting investors. In addition to pretending to be an American hero, he was found to be in possession of dozens of firearms which was prohibited due to his criminal background. Mr. Hamm could not stop breaking the law,” said Dallas FBI Special Agent in Charge Chad Yarbrough. “I am proud that we can work with our partners at the U.S. Attorney’s Office to uphold the Stolen Valor Act and ensure that courageous attribution stays with our nation’s bravest defenders.”

Hamm also pleaded guilty to being a prohibited person in possession of firearms and ammunition.  Hamm was convicted in Smith County in 2020 for theft of property, a state felony.  As a felon, Hamm is prohibited by federal law from owning or possessing firearms or ammunition. According to court documents, Hamm was in possession of dozens of firearms, including several rifles with high-capacity magazines, and ammunition for those firearms.  Because of his arsenal of weapons and his trained-warrior persona, Hamm scared any investors from pressing him on his failed investments.    

Through its investigation, the government learned that this was not the first time that Hamm had used stolen valor for his own personal benefit.  In 2020, Hamm presented falsified military records to a Smith County, Texas District Court, which he successfully leveraged into a more lenient sentence.  Hamm had used those same false documents to obtain Bronze Star license plates from the Texas Department of Motor Vehicles.

After Hamm was indicted in January 2022, more than $350,000 worth of assets, including cash, vehicles, and jewelry, were seized pursuant to the Justice Department’s asset forfeiture procedures.  Those assets were sold prior to sentencing and were forfeited to the government.  Because Hamm  did not have enough other assets to pay anything towards the $2.3 million restitution judgment, the U.S. Attorney requested for the Justice Department’s Money Laundering and Asset Recovery Section (MLARS) to approve application of the forfeited assets to the restitution debt so that the forfeited funds could be paid to the victims.  MLARS expedited the U.S. Attorney’s request and approved it in a matter of days. 

If you or someone you know has been a victim of Derek Robert Hamm, please contact the Federal Bureau of Investigation at 903-594-3503.  Derek Robert Hamm is also known as D. Wayne Hamm II, Wayne Hamm, D. Wayne H., DW Hamm, and RD Hamm.

This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

This case was investigated by the Federal Bureau of Investigation’s Tyler Field Office, with assistance from the Tyler Police Department, the Smith County Sheriff’s Office, the Phoenix Arizona Police Department, Smith County Adult Probation, the Texas Railroad Commission-Enforcement Division, Department of Veteran’s Affairs-Office of Inspector General, Texas Comptroller of Public Accounts-Criminal Investigation Division, and the United States Army Special Operations Command. This case was prosecuted by Assistant U.S. Attorneys Robert Austin Wells and Ryan Locker.

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PLANO, Texas – A Laredo man pleaded guilty to federal drug trafficking violations in the Eastern District of Texas on the day his jury trial was set to begin, announced U.S. Attorney Damien M. Diggs.

Jorge Elias Golarte, 54, of Laredo, Texas and Monterrey, Mexico, pleaded guilty to conspiracy to possess with the intent to distribute and distribution of methamphetamine, cocaine, heroin, and marijuana before U.S. District Judge Sean Jordan today.

According to information presented in court, Golarte, who is in the shipping business in Laredo, Texas and Monterrey, Mexico, admitted to his role in the conspiracy, distributing marijuana and cocaine from various sources which would then be provided to co-conspirators and distributed during the conspiracy in the Eastern District of Texas and elsewhere.  Golarte will also forfeit ownership of one of his Margo Logistics tractor-trailers.  

Golarte faces a minimum of 10 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office. 

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is investigation involves the Drug Enforcement Administration, Laredo and Dallas, the U.S. Border Patrol, the Dallas Police Department, and the Lewisville Police Department and is prosecuted by Assistant U.S. Attorneys Heather Rattan and Kevin McClendon.

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TYLER, Texas – Five defendants, including laboratory executives and hospital executives, were found guilty of conspiring to violate the Anti-Kickback Statute, announced U.S. Attorney Damien M. Diggs today.

Susan L. Hertzberg, 65, of New York, New York; Matthew John Theiler, 57, of Mars, Pennsylvania; David Weldon Kraus, 65, of Loudon, Tennessee; Thomas Gray Hardaway, 51 of San Antonio, Texas; and Jeffrey Paul Madison, 48, Georgetown, Texas, were found guilty by a jury on November 30, 2023, following a seven-week-long trial before U.S. District Judge Jeremy D. Kernodle.

“Patients should be able to trust that their physicians are ordering tests and making laboratory referrals based on what is best for the patient, and not because the physicians are looking to pad their pockets with profits from kickbacks,” said U.S. Attorney Damien M. Diggs.  “For several years, these defendants utilized an elaborate marketing scheme to facilitate payments to physicians in return for the physicians’ laboratory referrals.  Improper financial relationships such as these undermine the integrity of federally-funded healthcare programs by influencing physician decision-making.  This case emphasizes our District’s commitment to justice by pursuing both the hospital and lab executives who sought to influence the physicians and the physicians who accepted the illegal kickbacks.”     

“The reach of HHS-OIG is far and wide. Our agents and law enforcement partners will not be deterred by the scope of a health care fraud investigation or the location of its’ defendants,” said Jason E. Meadows, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Dallas Region. “Kickback arrangements, regardless of their intended complexity, will always be an investigative priority for our agency.”

“The Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of TRICARE, the health care system for military members and their dependents,” said Gregory P. Shilling, Acting Special Agent-in-Charge of DCIS’s Southwest Field Office.  “Today's guilty verdicts send a clear message that DCIS, along with our law enforcement partners and the U.S. Attorney’s Office, will diligently pursue fraudsters who seek self-enrichment by undermining the integrity of this critical program.”

On January 12, 2022, Hertzberg, Theiler, Kraus, Hardaway, and Madison, as well as Jeffrey Paul Parnell, 55, of Tyler; Laura Spain Howard, 49, of Allen; Todd Dean Cook, 58, Wimauma, Florida; William Todd Hickman, 60, of Lumberton; Christopher Roland Gonzales, 47, of McKinney; Ruben Daniel Marioni, 39, of Spring; Jordan Joseph Perkins, 39, of Conroe; Elizabeth Ruth Seymour, 40, of Corinth; Linh Ba Nguyen, 59, of Dallas; Thuy Ngoc Nguyen, 55, of Dallas; Joseph Gil Bolin, of Dallas; Heriberto Salinas, 63, of Cleburne; and Hong Davis, 55, of Lewisville, were indicted for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.  The statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federal health care programs.  The defendants were charged for their roles in a conspiracy through which physicians were incentivized to make referrals to rural hospitals and an affiliated lab in exchange for kickbacks which were disguised as investment returns; and in which marketers were incentivized to arrange for or recommend the ordering of services from rural hospitals and an affiliated lab.

Two rural Texas hospitals, Little River Healthcare (LRH) based in Rockdale, and Stamford Memorial Hospital based in Stamford, partnered with Boston Heart Diagnostics (BHD), a clinical laboratory based in Framingham, Massachusetts, that specialized in advanced cardiovascular lipid testing.  For a fee, BHD processed the blood tests while the hospitals billed the tests to insurers as hospital outpatient services, with the hospitals charging insurers a much higher rate than BHD could receive as a clinical laboratory.  The hospitals utilized a network of marketers who in turn operated management services organizations (MSOs) that offered investment opportunities to physicians throughout the State of Texas.  In reality, the MSOs were simply a means to facilitate payments to physicians in return for the physicians’ laboratory referrals.  Pursuant to the kickback scheme, the hospitals paid a portion of their laboratory revenues to marketers, who in turn kicked back a portion of those funds to the referring physicians who ordered BHD tests from the hospitals or from BHD directly.  BHD executives and sales force personnel leveraged the MSO kickbacks to gain and increase referrals and, in turn, to increase their revenues, bonuses, and commissions.

Parnell, Howard, Cook, Hickman, Gonzales, Marioni, Perkins, Seymour, Thuy Nguyen, Salinas, and Davis pleaded guilty prior to trial.

In January 2022, Robert O’Neal, 65, of San Antonio, pleaded guilty to conspiracy to commit illegal remunerations, in violation of Anti-Kickback Statute, and with conspiracy to commit money laundering.  His role in the kickback conspiracy was to arrange for physician referrals and recommend the ordering of services to the rural hospitals and BHD.  O’Neal also had kickback proceeds laundered on his behalf and, at times various times, obtained proceeds from the kickback conspiracy.

In July 2023, Peter J. Bennett, 49, of Houston, was convicted of money laundering conspiracy, money transmitting conspiracy, and perjury.  According to information presented in court, Bennett created sham trusts and shell corporations through which he laundered at least $2,724,080.41 in healthcare kickback proceeds.  Bennett used his law firm’s Interest on Lawyers Trust Account (IOLTA), operating account, and a personal bank account to launder and transmit the kickback proceeds.

The defendants face up to five years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the U.S. Department of Defense – Defense Criminal Investigative Service (DCIS) with assistance from the U.S. Secret Service and the U.S. Department of Commerce - Export Enforcement.  It was prosecuted by Assistant U.S. Attorneys Adrian Garcia, Nathaniel C. Kummerfeld, Lucas Machicek, and Robert Austin Wells.

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A federal jury in Beaumont, Texas, convicted a Romanian national today for plotting to traffic hundreds of kilograms of cocaine from the United States in a scheme that also included money laundering, arms trafficking, and an attempt to assassinate rival gang members.

According to court documents and evidence presented at trial, Marius Lazar, 50, of Bucharest, Romania, was a “founding member” of his local chapter of the Hells Angels Motorcycle Club, a transnational outlaw motorcycle gang that was founded in the United States and is now active on six continents. Through his relationship with a fellow Hells Angels member from New Zealand, Lazar joined a conspiracy to purchase more than 400 kilograms of cocaine from a person in the United States, who the conspirators believed was a powerful drug trafficker but who was actually an undercover agent of the Drug Enforcement Administration (DEA). As part of his negotiations for the cocaine purchase, Lazar also solicited the undercover agent to kill two members of a rival motorcycle club in Romania, and offered to supply the undercover with rifles, grenades, armored vehicles, and other military-grade equipment that Lazar understood would be used against police officers in the United States. Members of the conspiracy sent nearly $1 million to the United States, via bank wires and Bitcoin transfers, as payment for the drugs and murders.

The jury convicted Lazar of conspiracy to commit racketeering, conspiracy to import cocaine into the United States, and conspiracy to commit money laundering. He faces a maximum penalty of life years in prison. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Co-defendants Murray Michael Matthews and Marc Patrick Johnson remain fugitives.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Damien Diggs for the Eastern District of Texas, DEA Administrator Anne Milgram, Special Agent in Charge Mark B. Dawson of Homeland Security Investigations (HSI) Houston, U.S. Marshal John Garrison of the U.S. Marshals Service (USMS), and Special Agent in Charge Christopher J. Altemus Jr. of the IRS Criminal Investigation (IRS-CI) Dallas Field Office made the announcement.

The DEA, HSI, USMS, and IRS-CI investigated the case, with significant assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Trial Attorney Conor Mulroe of the Criminal Division’s Violent Crime and Racketeering Section and Assistant U.S. Attorney Christopher Rapp for the Eastern District of Texas are prosecuting the case.

The Justice Department’s Office of International Affairs worked with law enforcement partners in Romania to secure the arrest and extradition of Lazar.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.   

A federal grand jury in the Eastern District of Texas returned an indictment yesterday charging a Texas couple for operating an illegal pyramid scheme that defrauded thousands of participants of more than $10 million.

According to court documents, LaShonda Moore, 35, and Marlon Moore, 37, co-founded and ran an illegal pyramid scheme called Blessings in No Time (BINT). BINT was allegedly a chain-referral pyramid scheme that targeted the African American community during the COVID-19 pandemic with false and misleading promises that participants could expect 800% guaranteed returns and guaranteed refunds if participants were unsatisfied with the program.

The Moores allegedly organized BINT’s payment scheme with “playing boards” that had eight Fire positions, four Wind positions, two Earth positions, and one Water position. As alleged, players in the Fire position advanced on the board by paying at least $1400 to the person in the Water position and recruiting two new Fire-level participants, at which point the cycle would repeat.  In other words, eight new participants had to be recruited into the scheme for a single earlier participant to receive a return on their initial investment. The Moores allegedly placed themselves and their family members in the Water position on multiple playing boards to receive the payments from participants in the Fire position and collected a substantial sum from participants’ monthly user fees, which were required for participation in BINT.

The Moores are charged with conspiracy to commit wire fraud, wire fraud, and money laundering. If convicted, they each face a maximum penalty of 20 years in prison for each wire fraud count and 10 years in prison for each money laundering count.  

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Damien M. Diggs for the Eastern District of Texas, Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group, Acting Special Agent in Charge Christina Foley of the U.S. Secret Service Dallas Field Office, and Special Agent in Charge Christopher J. Altemus Jr. of the IRS Criminal Investigation (IRS-CI) Dallas Field Office made the announcement.

USPIS, U.S. Secret Service, and IRS-CI are investigating the case.

Trial Attorney Theodore M. Kneller and Assistant Chief William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Nathaniel Kummerfeld for the Eastern District of Texas are prosecuting the case. The department received assistance from the Federal Trade Commission and the Texas Attorney General’s Office.

If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BEAUMONT, Texas– A Houston man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Ashton Jherimiah Robertson, 25, pleaded guilty to possession of a firearm by a prohibited person and was sentenced to 63 months in federal prison by U.S. District Judge Marcia A. Crone on Oct. 31, 2023.

According to information presented in court, on May 7, 2021, Robertson was pulled over in Beaumont for not wearing a seatbelt.  During the stop, law enforcement officers discovered Robertson had outstanding warrants from Beaumont and Harris County.  Robertson was arrested and the vehicle was searched.  During the search, officers discovered a firearm.  Further investigation revealed Robertson was a previously convicted felon and prohibited from owning or possessing firearms or ammunition. 

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Rachel Grove.

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BEAUMONT, Texas– A Kountze man has been sentenced to federal prison for bank robbery in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Timothy Shane Mitchell, 39, pleaded guilty to bank robbery and was sentenced to 87 months in federal prison by U.S. District Judge Marcia Crone on Oct. 31, 2023.  

According to information presented in court, on June 6, 2022, Mitchell robbed the Lumberton branch of the Community Bank of Texas.  Mitchell approached a teller’s station at the bank and gave the teller a note demanding money.  Mitchell told the teller he had a gun, which he threatened to use if she alerted authorities.  The teller gave Mitchell a stack of currency and he left the bank.  The teller immediately activated the panic button alerting police to the robbery.  Witnesses were able to describe Mitchell’s vehicle, which was apprehended shortly after the robbery.  Mitchell was arrested and the $5,860 in currency was recovered at that time. 

This case was investigated by the Lumberton Police Department and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

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BEAUMONT, Texas – A Seabrook man has been sentenced to federal prison for trafficking drugs in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Justin Hall McSpadden, 45, pleaded guilty to possession with intent to distribute methamphetamine and was sentenced to 235 months in federal prison by U.S. District Judge Marcia A. Crone on October 20, 2023. 

According to information presented in court, on October 1, 2021, McSpadden sold four ounces of methamphetamine for $1,200.00 to an individual at the Petro Truck Stop located at 5405 Walden Road in Beaumont.  Later that same day, law enforcement conducted a traffic stop on McSpadden on Cardinal Drive in Beaumont.  During the traffic stop, law enforcement located an additional two ounces of methamphetamine inside a toolbox in the vehicle and a handgun on the driver’s side floorboard.  McSpadden was indicted and charged with federal drug trafficking violations.

This case was investigated by the U.S. Drug Enforcement Administration and the Jefferson County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Michael A. Anderson.

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PLANO, Texas – Two Dallas brothers have been sentenced for federal violations related to a fraud scheme in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Thomas Hughes Page, 47 and Jon Phillip Page, Jr., 55, were convicted at trial of conspiracy to commit bank fraud and conspiracy to commit money laundering and sentenced on Oct. 18, 2023, by U.S. District Judge Sean D. Jordan.  Thomas Page was sentenced to 71 months in federal prison and Phillip Page was sentenced to 63 months in federal prison.  The defendants were ordered to pay restitution of $3.2 million.

According to information presented at trial, between 2010 and 2017, the defendants used their company, Page Capital Group, to obtain multiple loans from PlainsCapital Bank (PCB), representing that the loans would be secured by a brokerage account worth at least $2 million.  However, neither Thomas Page nor Phillip Page had access to such funds, as the brokerage account was never actually funded.  Thomas Page and Phillip Page directed and paid a third individual, Clayton Wertz, to create and submit to PCB fraudulent brokerage statements for the brokerage account reflecting significant value.  Once Thomas Page and Phillip Page received the money from PCB, they used the funds on various business and personal expenses.  In addition, Thomas Page and Phillip Page took affirmative steps, such as providing occasional payments on the loan, to conceal and disguise their activity. As a result of the fraudulent conduct, the bank loaned Page Capital approximately $3.6 million and eventually lost approximately $3.25 million over the course of the scheme. 

“The U.S. Attorney’s Office takes bank fraud seriously,” said U.S. Attorney Damien M. Diggs. “This type of crime can affect the security and soundness of FDIC-insured banks, and we all pay the price when banks lose money due to fraud.  Along with the FBI, this office will investigate and prosecute bank fraud and related crimes to protect the financial system and prevent losses to our banking institutions.”

“Financial Institution Fraud is not a victimless crime. It hurts lending institutions and negatively impacts borrowers who are seeking genuine loans for their businesses,” said FBI Dallas Special Agent in Charge Chad Yarbrough. “The defendants used their ill-gotten gains for their personal benefit without regard for the consequences. Today’s sentence demonstrates that the FBI will pursue anyone that attempts to defraud financial institutions, investors, or the public.”

This case was investigated by the FBI – Frisco Resident Agency and prosecuted by Assistant U.S. Attorneys in the Plano office.

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BEAUMONT, Texas – A Houston man who served as a production manager in a counterfeit drug trafficking scheme has been sentenced to federal prison for drug trafficking and money laundering violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

Willis Reed, 61, pleaded guilty to conspiracy and was sentenced to 60 months in federal prison today by U.S. District Judge Marcia A. Crone.   

According to the indictment, from April 2014 until August 2021, Reed conspired with ten others including Adam P. Runsdorf, the owner and president of Woodfield Pharmaceutical LLC based in Boca Raton, Florida.

According to information presented in court, Reed was a production manager and director of technical operations at Woodfield Pharmaceutical’s manufacturing facility in Houston, where employees produced more than 500,000 pints of counterfeit cough syrup for Byron Marshall, a Houston drug trafficker. Marshall’s drug trafficking organization sold the counterfeit drugs across Texas, Louisiana, Mississippi, Alabama, Georgia, South Carolina, Tennessee, Wisconsin, California, Florida, Arkansas, and Ohio. Prices generally ranged from $100 to more than $1,000 per one-pint bottle. Depending on the market and brand of cough syrup, prices went as high as $3,800 to $4,000 per pint.

All eleven defendants charged in the indictment, including Reed, pleaded guilty. All eleven have been sentenced. Byron A. Marshall, Tunji Campbell, and Adam Runsdorf pleaded guilty to conspiracy, trafficking in counterfeit drugs, and money laundering conspiracy. Marshall was sentenced to 300 months in federal prison. Campbell, who partnered with Marshall to hatch the scheme, was sentenced to 135 months imprisonment. Runsdorf was sentenced to 72 months imprisonment and ordered to forfeit $5 million and a McLaren sportscar. Chauntell D. Brown pleaded guilty to conspiracy and trafficking in counterfeit drugs and was sentenced to 72 months imprisonment. In addition to Reed, Cheryl A. Anderson, Ashley A. Rhea, Maria Anzures-Camarena, Kalpen Patel, and Jonathan Shaver each pleaded guilty to conspiracy and were sentenced to 60 months imprisonment. Gina Acosta pleaded guilty to conspiracy and was sentenced to 40 months imprisonment. Reed was the last defendant to be sentenced in the case.       

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case was investigated by the Drug Enforcement Administration; U.S. Food and Drug Administration Office of Criminal Investigations; Internal Revenue Service-Criminal Investigation; Federal Bureau of Investigation; U.S. Marshals Service; Houston Police Department; Galveston Police Department; Galveston County Sheriff’s Office; Dickinson Police Department; League City Police Department; Pearland Police Department; Pasadena Police Department; Texas City Police Department; Harris County Precent #2; Brazoria County Sheriff’s Office; Fort Bend County Sheriff’s Office; Liberty County Sheriff’s Office; and the Texas National Guard.  This case was prosecuted by Assistant U.S. Attorneys John B. Ross, Jonathan C. Lee, and Robert Wells.

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TEXARKANA, Texas – A Temecula, California, man has been sentenced to federal prison for conspiring to commit health care kickbacks, announced U.S. Attorney Damien M. Diggs today.

Steven Donofrio, 49, was found guilty by a jury on May 5, 2023, following a two-week-long trial.  Donofrio was sentenced to 42 months in federal prison by U.S. District Judge Robert W. Schroeder, III on October 11, 2023.

“Donofrio leveraged the access, influence, and relationships that his employees wielded to secure physicians’ referrals. He added costs, not value, to an overburdened, taxpayer-funded system. The taxpayers deserve better,” said U.S. Attorney Damien M. Diggs.  “Today’s sentence sends the clear message that no matter who you are, if you do wrong, you will be found out, and you will be brought to justice.”

“While this health care fraud scheme appeared complex on the surface, it was simple greed and theft at its core,” said Jason E. Meadows, Special Agent in Charge of the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). “Illegal kickback payments lead to unnecessary medical procedures and cost taxpayers millions of dollars. HHS-OIG will continue to work with our law enforcement partners to hold accountable those who blatantly steal taxpayer money for their personal benefit.”

“Today’s sentence brings a conclusion to an illegal kickback scheme that defrauded our health care system for millions of dollars. The defendant and his co-conspirators enriched themselves and in turn affected the quality of care of innocent taxpayers,” said FBI Dallas Special Agent in Charge Chad Yarbrough. “The FBI is committed to working with our law enforcement, public, and private sector partners to combat health care fraud and seek justice for the patients that are harmed because of these schemes.”

According to information presented in court, Donofrio conspired with others to pay and receive kickbacks in exchange for the referral of, and arranging for, health care business, specifically pharmacogenetic (PGx) tests.  Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variations that affect how an individual patient metabolizes certain drugs.  The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California; Irvine, California; and San Diego, California.  More than $28 million in illegal kickback payments were exchanged by those involved in the conspiracy.

In December 2019, twelve individuals from three states were charged for their roles in the kickback conspiracy.  A federal grand jury in the Eastern District of Texas returned an indictment against Philip Lamb, of Eagle, Colorado; Nicolas Arroyo, of Tempe, Arizona; Vincent Marchetti, Jr., of Coronado, California; William Flowers, of Houston, Texas; Steven Donofrio; James J. Walker, Jr. a/k/a Jimmy Walker, of Frisco, Texas; Timothy Armstrong, deceased, formerly of Frisco, Texas; Virginia Blake Herrin, of Frisco, Texas; Patrick Ridgeway, of Jackson, Mississippi; Chismere Mallard, of McAllen, Texas; Dr. Ray W. Ng, of Dallas, Texas; and Ashley Kretzschmar, of Aledo, Texas; for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.

Philip Lamb, Nicolas Arroyo, Jimmy Walker, Timothy Armstrong, Virginia Blake Herrin, Patrick Ridgeway, Chismere Mallard, and Ashley Kretzschmar pleaded guilty prior to trial.  Kimberly Willette, of Friendswood, Texas, and Edwin Chad Isbell, of Atascocita, Texas also pleaded guilty to related charges.

Vincent Marchetti, Jr., was found guilty by a jury on December 16, 2021, following a month-long trial.  He was sentenced to 48 months in federal prison on August 30, 2022.

On April 25, 2022, Nicolas Arroyo was sentenced to 21 months in federal prison.  On August 23, 2022, Kimberly Willette was sentenced to one year and one day in federal prison, and Patrick Ridgeway was sentenced to a three-year term of probation and ordered to pay a $100,000 fine.  On September 11, 2023, Jimmy Walker was sentenced to five months in federal prison and ordered to pay a $50,100 fine.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for or recommending the ordering of items or services payable under federal health care programs.  Under federal statutes, violations of the Anti-Kickback statute are punishable by up to five years in federal prison.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI Dallas – Frisco Resident Agency.  It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld, Lucas Machicek, and Adrian Garcia, with assistance from Assistant U.S. Attorneys Stephan E. Oestreicher, Jr., Brent Andrus, and L. Frank Coan, Jr., and Special Assistant U.S. Attorney Laurel E.P. Simmons.

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