Eastern District of Texas

BEAUMONT, Texas – A Houston man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Alexis Villatoro, 26, pleaded guilty on Jan. 12, 2021, to conspiracy to commit money laundering and was sentenced to 40 months in federal prison today by U.S. District Judge Thad Heartfield.

“Drugs and money laundering go hand-in-hand,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Seizing the proceeds of drug trafficking is an important part of our efforts to fight illegal drug activity and our district will continue to pursue these violators with every resource available.”

According to information presented in court, on Dec. 10, 2018, local law enforcement authorities conducted a traffic stop of Villatoro on Interstate-10 in Beaumont.  During the traffic stop, a police canine positively alerted to the presence of contraband.  A subsequent probable cause search was conducted on the vehicle, during which $12,360 in cash was located in the rear hatch area.  Further investigation revealed the money was the proceeds of an illegal drug transaction.  Villatoro was indicted by a federal grand jury on Oct. 7, 2020.

This effort is part of Operation Guitar Hero, 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 U.S. Drug Enforcement Administration, the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Michael Anderson.

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BEAUMONT, Texas – A Port Arthur man has pleaded guilty to a federal firearms violation in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jesus Antonio Ceja, 30, pleaded guilty to being a felon in possession of a firearm today before U.S. District Judge Marcia A. Crone.

“I am grateful for the good work of the Port Arthur Police Department and the ATF in bringing this matter to a successful conclusion,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Violent felons cannot be allowed to possess firearms, and today’s guilty plea represents another step forward in making the streets of Port Arthur safer.”

According to court documents, on Feb. 9, 2020, law enforcement officers observed a vehicle stopped at an intersection in 5200 block of 15th Street in Port Arthur. As the officer approached the vehicle, he saw the driver, later identified as Ceja, with his head down. The officer drove towards the vehicle to see if the driver was in need of assistance, at which time Ceja looked at the officer and accelerated away at a high rate of speed.  As the officer turned around to follow the vehicle, he saw that Ceja had crashed his vehicle into a pole at the nearby intersection of Lewis and Lakeview streets.  Ceja repeatedly reached under the seat and ignored commands to show his hands and exit the vehicle.  After the officer opened the passenger door, Ceja exited the vehicle and crawled on top of it, refusing to come down.  Once other officers arrived, Ceja came down off the car and told officers there was methamphetamine and a firearm in the car.  Further investigation revealed Ceja was a convicted felon having previously been found guilty of felony escape in Jefferson County in 2008.  As a convicted felon, Ceja is prohibited from owning or possessing firearms or ammunition.

Ceja was indicted by a federal grand jury on April 27, 2021.  He faces up to 10 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 being 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 is being investigated by the Port Arthur Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Matthew Quinn.

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TYLER, Texas – A Mexican national residing in Tyler has been sentenced to federal prison for violations related to unlawfully reentering the United States after having been deported to Mexico three times and being found unlawfully present in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jose Daniel Sanchez-Escobar, also known as Jose Sanchez-Esquivel, 38, pleaded guilty on April 13, 2021 to being found unlawfully present in the United States after having been removed to Mexico and then reentering the U.S. without the permission of the Secretary for the Department of Homeland Security.  Sanchez was sentenced to 41 months in federal prison on July 29, 2021 by U.S. District Judge Jeremy D. Kernodle.  After this sentence was imposed, Judge Kernodle accepted Sanchez’s plea to violating the conditions of his supervised release in a previous conviction in 2017 for unlawful reentry after removal in the Eastern District of Texas and sentenced Sanchez to an additional 12 months in federal prison.  

According to information presented in court, on April 22, 2013, Sanchez was convicted of fraud use or possession of identification in Smith County and sentenced to nine months in federal prison. On Oct. 22, 2013, Sanchez was ordered removed from the United States to Mexico by an immigration judge in Houston after a state felony conviction for fraud use or possession of identification information. Pursuant to this order, Sanchez was removed from the United States to Mexico on Oct. 23, 2013. After this removal, Sanchez reentered the United States.

On Sep. 28, 2017, Sanchez was convicted in the Eastern District of Texas of unlawful reentry after removal and sentenced to ten months and three year term of supervised release. On Dec. 6, 2017, Sanchez was removed to Mexico. After this removal, Sanchez reentered the United States and was arrested for unlawfully reentering the United States.  On April 26, 2018, Sanchez was removed from the United States to Mexico a third time. After each of these removals, Sanchez reentered the United States without receiving the consent of the Secretary of the Department of Homeland Security to apply for readmission to the United States.

On April 12, 2020, Sanchez was found by Immigration and Customs Enforcement (ICE) officers at the Smith County Jail. He was in state custody after being arrested for driving while intoxicated. On Sep. 17, 2020, the federal grand jury returned a one count indictment charging Sanchez with unlawful reentry after removal.

This case was investigated by the Department of Homeland Security-Immigration Customs and Enforcement-Enforcement and Removal Operations (DHS/ICE/ERO) Dallas Field Office, the Smith County Sheriff’s Office, and the Tyler Police Department.  This case was prosecuted by Assistant U.S. Attorney Allen Hurst.

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TYLER, Texas – A Kilgore man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Christopher Marcell Mumphrey, 43, pleaded guilty on March 20, 2021, to possession with intent to distribute methamphetamine and was sentenced to 100 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.

“So long as there are those who have committed themselves to infesting their communities with illegal drugs, the U.S. Attorney’s Office, with our state and local partners, are committed to interdicting those efforts,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We will continue to go after meth dealers in East Texas.” 

According to information presented in court, on Feb. 5, 2020, Mumphrey was a passenger in a vehicle which was used to transport and distribute methamphetamine in Smith County, Texas.  Mumphrey exited the vehicle and signaled to the buyer to approach the vehicle to complete the transaction.  Mumphrey was indicted by a federal grand jury on Nov. 6, 2000 and charged with federal drug trafficking violations. 

This case was investigated by the Federal Bureau of Investigation, the Smith County Sheriff’s Office and the Texas Department of Public Safety - CID and prosecuted by Assistant U.S. Attorney Alan Jackson.

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BEAUMONT, Texas – A Little Rock, Arkansas, man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Leanthony Ray Moses, 44, pleaded guilty to conspiracy to distribute and possess with intent to distribute methamphetamine today before U.S. Magistrate Judge Zack Hawthorn.

“Today’s plea is just another example of how there is no substitute for the diligent and thorough work of our local law enforcement partners,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Thanks to the quick thinking of the stopping officer, three kilograms of methamphetamine—originally destined for our East Texas communities—has been taken off the street.”

According to information presented in court, on Sep. 17, 2019, Moses was stopped by a local law enforcement officer for a traffic violation.  The officer’s canine partner alerted to the presence of drugs in the vehicle.  During a search, nearly three kilograms of methamphetamine were discovered.

Moses was indicted by a federal grand jury on Nov. 20, 2019.  He faces up to life 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 is being investigated by Homeland Security Investigations and the Nacogdoches Police Department and prosecuted by Assistant U.S. Attorney Donald S. Carter.

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BEAUMONT, Texas – A Port Arthur man has pleaded guilty to a federal firearms violation in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Lou Arrington Welch, 32, pleaded guilty to possession of a firearm by a prohibited person today before U.S. Magistrate Judge Zack Hawthorn.

“The fact that Welch would shoot an innocent animal speaks not only to his depravity, but also to his dangerousness.  As a felon with a cruel heart, he is exactly the kind of person that should not be permitted to possess a firearm,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Getting guns out of the hands of prohibited persons makes all of us—including man’s best friend—safer.”

According to court documents, on Dec. 29, 2020, Port Arthur Police responded to a call reporting gunshots and the shooting of a dog.  When police arrived on scene, officers discovered the wounded dog and learned from the dog’s owner that Welch had previously threatened to shoot her dog.  While officers were at the scene, Welch drove past, and officers unsuccessfully attempted to flag him down.  Officers followed Welch in a marked unit and attempted to pull him over.  However, Welch accelerated, and a chase ensued.  Police eventually managed to stop and arrest Welch.  Police recovered a pistol from the car, and Welch admitted to officers that he had shot the dog.  Further investigation revealed Welch had previously been convicted of felony drug violations in Jefferson County.  As such, Welch is prohibited from owning or possessing firearms or ammunition.  The dog ultimately survived its injuries.

Welch was indicted by a federal grand jury on Feb. 3, 2021.  He faces up to 10 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 being 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 is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Port Arthur Police Department and prosecuted by Assistant U.S. Attorney Rachel Grove.

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SHERMAN, Texas – The former mayor of Richardson, Texas, and a land developer she married during the case's investigation, have been convicted of federal bribery and tax fraud violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Laura Jordan, also known as Laura Maczka, 56, and Mark Jordan, 54, both of Plano, Texas were found guilty by a jury following a three-week trial before U.S. District Judge Amos Mazzant III.  Both defendants were found guilty of bribery concerning a program receiving federal funds, conspiracy to commit bribery concerning a program receiving federal funds, tax fraud, and conspiracy to commit tax fraud.

“The cornerstone of a representative democracy is that citizens can rely on their elected officials to wield their official powers in a way that furthers the best interests of the community, rather than to benefit their friends and cronies,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Today’s verdict will go a long way towards bolstering public confidence in the integrity of our democratic institutions and promoting open and honest governance.  I thank the jury for their service and commend the investigative and prosecutorial team for their tenacity and professionalism.”

“Ultimately, the trust of the citizens of Richardson was betrayed by Laura and Mark Jordan,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno.  “Our elected officials are held to the highest standards, and Laura Jordan traded her responsibility to serve her constituents to enjoy a stream of financial benefits.  The FBI and our partners will continue to ensure that those who violate their obligation to the public are held fully accountable.”

According to information presented in court, from May 2013 through April 2015, Maczka was the mayor of Richardson, Texas, and Jordan was a land developer.  Maczka and Jordan conspired to devise and execute a scheme to commit bribery.  Maczka, contrary to her campaign promises, supported and repeatedly voted for controversial zoning changes sought by Jordan, ultimately allowing for the construction of over 1,000 new apartments in Richardson near other Richardson neighborhoods. In exchange, Jordan paid Maczka over $18,000 in cash, an additional $40,000 by check, and paid for over $24,000 in renovations to Maczka’s home.  Jordan also paid for luxury hotel stays and airfare upgrades for Maczka, and provided Maczka lucrative employment at one of Jordan’s companies.  According to court testimony, Maczka and Jordan failed to disclose to the public that they had coordinated to affect the zoning changes Jordan wanted and that Jordan had provided a stream of benefits to Maczka.

Maczka and Jordan were indicted by a federal grand jury on May 10, 2018.  Maczka and Jordan each face up to 10 years in federal prison.  The maximum statutory sentences prescribed by Congress are provided here for information purposes, as the sentencings will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  Sentencing hearings will be scheduled after the completion of presentence investigations by the U.S. Probation Office.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Heather Rattan, Sean Taylor, Brent Andrus, and other attorneys from the Plano branch office. 

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BEAUMONT, Texas – A Honduran national residing in Port Arthur has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Santos Orellana-Hernandez, 47, pleaded guilty to use of interstate commerce facilities in the commission of murder-for-hire, tampering with a witness by intimidation and threats, and conspiracy to commit witness tampering.  Orellana-Hernandez entered his guilty plea today before U.S. District Judge Thad Heartfield.

“Public safety in the Eastern District of Texas is enhanced by the excellent partnerships we have between local and federal law enforcement.  In this case, as soon as the Port Arthur Police Department learned of the defendant’s plot to kill his Port Arthur family’s relatives in Honduras, they coordinated with the FBI, who moved swiftly to prevent any bloodshed,” said Acting U.S. Attorney Nicholas J. Ganjei.  “I also commend the tremendous work of the investigative and prosecutorial team, which flew to Honduras to interview witnesses and prepare the criminal case against Mr. Orellana-Hernandez.  Because of the excellent work of law enforcement in this matter, lives were saved.”

“Today’s announcement highlights the FBI's efforts in Beaumont, the FBI Legal Attaché office, and its local law enforcement and international partners to tirelessly and aggressively utilize all available investigative tools and methods at their disposal,” said Houston FBI Special Agent in Charge Perrye K. Turner.  “Law enforcement and the public must continue to work together to ensure our communities’ safety.”

“We appreciate the continued collaboration of the U.S. Attorney’s Office and the FBI on this case,” said Port Arthur Police Chief Timothy Duriso.  “We will continue to work closely with our federal partners to make Port Arthur a safer place.”

According to information presented in court, from January to March of 2020, Orellana-Hernandez, residing in Port Arthur, Texas, solicited the murder of two extended family members residing in Honduras.  Specifically, Orellana-Hernandez solicited Gustavo Ramires, a person located in Honduras, to kill Orellana-Hernandez’s mother-in-law, G.V., and brother-in-law, J.A.V.  The purpose of the intended murders was revenge against Orellana-Hernandez’s soon-to-be ex-wife, who was seeking a divorce from Orellana-Hernandez in Jefferson County, Texas.  Orellana-Hernandez reportedly told E.A.V. that he would make her “cry tears of blood.”

Orellana-Hernandez offered to pay Ramires $200,000 in Honduran Lempira (approximately $8,000 in U.S. dollars) upon proof that Ramires had killed G.V., J.A.V., and two other individuals. Orellana-Hernandez directed Ramires to perform the killings on or after April 21, 2020, the date when the divorce was to become final.  Ramires was additionally instructed to provide photographic proof of the killings before he would receive payment.  Ramires later placed a recorded telephone call to Orellana-Hernandez, in which the two discussed the murder-for-hire plot, using coded language such as “planting the corn,” to refer to the killings.  Ramires later told investigators that “planting the corn” meant burying the victims’ bodies.

Orellana-Hernandez was indicted by a federal grand jury on May 20, 2020 and taken into federal custody.  In early June, while jailed, Orellana-Hernandez conspired with another person to intimidate E.A.V. in an attempt to make her withdraw the murder-for-hire accusation. On Nov. 4, 2020, the grand jury returned a superseding indictment that added the witness tampering charges. 

Orellana-Hernandez 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 was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney John B. Ross and Special Assistant U.S. Attorney Sean C. Day.             

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PLANO, Texas – A Sherman woman has been sentenced to prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Amanda Lowry, 40, pleaded guilty on Dec. 4, 2020, to conspiracy to obtain information from a protected computer and was sentenced to 30 months in federal prison today by U.S. District Judge Sean D. Jordan.

“Today’s sentence is another example of the Eastern District’s commitment to vigorously defending protected health information and prosecuting those who exploit such information for their personal gain,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The defendant’s actions not only compromised victims’ sensitive information, exposing them to fraudulent schemes; but, also ultimately resulted in unnecessary costs to federal healthcare programs.”

According to information presented in court, Lowry, Demetrius Cervantes, and Lydia Henslee were named in a federal indictment on Sept. 11, 2019 charging them with conspiracy to obtain information from a protected computer and conspiracy to unlawfully possess and use a means of identification.  They are alleged to have breached a health care provider’s electronic health record (EHR) system in order to steal protected health information and personally identifiable information belonging to patients.  This stolen information was then “repackaged” in the form of false and fraudulent physician orders and subsequently sold to durable medical equipment (DME) providers and contractors.  The defendants obtained more than $1.4 million in proceeds from the sale of the stolen information.  The defendants then used those proceeds to purchase items such as sport utility vehicles, off-road vehicles, and jet skis.   

Cervantes was sentenced to 48 months in federal prison on July 8, 2021.  Henslee pleaded guilty on March 25, 2021.  Her sentencing date has not been set. 

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General; U.S. Department of the Treasury, Internal Revenue Service, Criminal Investigation; and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service.  The matter is being prosecuted by Assistant U.S. Attorneys Nathaniel Kummerfeld and Adrian Garcia.             

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PLANO, Texas – An Ohio man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Austin Seymour, 26, of Uniontown, Ohio, pleaded guilty on Jan. 26, 2021, to conspiracy to distribute and possess with intent to distribute controlled substances and was sentenced to 168 months in federal prison today by U.S. District Judge Sean D. Jordan.

“The Eastern District of Texas remains committed to pursuing the fight against illegal narcotics on all fronts,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This defendant was in the business of distributing counterfeit pharmaceutical drugs, which can often have deadly consequences for the user.  These drugs are increasingly being sold in the Eastern District of Texas, and our Office is committed to leveraging all of our resources to locate and prosecute those responsible for distributing these unsafe drugs into our communities.”

“Counterfeit pharmaceutical pills like the ones Mr. Seymour and his co-conspirators distributed throughout North Texas are responsible for the destruction of countless families and lives taken too soon,” said Eduardo A. Chavez, Special Agent in Charge of DEA Dallas.  “DEA Dallas will continue to partner with our communities to educate and prevent these drugs from reaching our homes and will most importantly, hold those accountable who choose to distribute and profit from this poison.”

According to information presented in court, in February 2019, Seymour became the primary distributor for the Gary Collin Bussell drug trafficking organization and was responsible for the organization’s drug stash house.  In so doing, he also assumed the role of the primary distributor to customers in the DFW area.  He distributed counterfeit pharmaceutical pills, marijuana, and THC and was responsible for making payments to the organization’s narcotics suppliers.  When a search was executed at Seymour’s residence, agents found a loaded Glock firearm in his vehicle along with various narcotics, bulk U.S. currency, a money counter, and a drug ledger in his apartment.  Seymour was indicted by a federal grand jury on Oct. 8, 2019 and charged with drug trafficking violations.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.

This case was investigated by the U.S. Drug Enforcement Administration and the Dallas Police Department.  It was prosecuted by Assistant U.S. Attorney Jay Combs.

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BEAUMONT, Texas –A Mexican national residing in Houston, Texas, was convicted at trial of conspiracy charges related to drug trafficking and money laundering, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Fernando Perez-Gomez, 35, of Houston, was convicted by a jury of conspiracy to possess with intent to distribute a controlled substance and conspiracy to commit money laundering today following an eight-day trial before U.S. District Judge Marcia A. Crone. 

“The importation of bulk quantities of drugs from Mexico is a pressing public safety issue that impacts cities and towns far beyond the border,” said Acting U.S. Attorney Nicholas J. Ganjei.  “EDTX will aggressively seek out and prosecute those that seek to profit by smuggling narcotics into our country and distributing these deadly wares in our communities.”

“The conviction of Perez-Gomez is the result of focusing investigative resources against drug trafficking organizations that import large shipments of hard drugs from Mexico then deliver them to cities throughout the United States,” stated DEA Houston Division Special Agent in Charge Daniel C. Comeaux.  “DEA and our partners remain determined to identify, dismantle, and destroy drug trafficking organizations that import and spread their poison in cities across our nation.”

According to information presented in court, from at least May 2014 through May 2016, Perez-Gomez was involved in a conspiracy to traffic drugs from the Houston-area through the Eastern District of Texas and to various destinations for distribution through the United States.   The investigation revealed that at least 16 persons were involved in this polydrug conspiracy, which resulted in the seizure of approximately 80 kilograms of cocaine, over four kilograms of methamphetamine, and a kilogram of heroin.  Additionally, $2.5 million in cash was seized as part of the investigation.

Perez-Gomez was indicted by a federal grand jury on July 1, 2020, and faces up to life in federal prison at sentencing.  The maximum statutory sentences prescribed by Congress are provided here for information purposes, as the sentencings will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  Sentencing hearings will be scheduled after the completion of presentence investigations 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 was investigated by the U.S. Drug Enforcement Administration and the Houston Police Department and prosecuted by Assistant U.S. Attorneys Michelle S. Englade and Jonathan Lee.

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BEAUMONT, Texas – A Port Arthur convicted felon has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Lorenzo Antonio Salinas, 33, pleaded guilty on April 6, 2021, to being a prohibited person in possession of a firearm and was sentenced to 27 months in federal prison today by U.S. District Judge Thad Heartfield.

“Violent criminals like Lorenzo Salinas cannot be allowed to possess firearms,” said Acting U.S. Attorney Nicholas J. Ganjei. “My office will never stop focusing our efforts on keeping Southeast Texas safe by aggressively prosecuting violations of federal firearms laws.”

According to information presented in court, on March 6, 2020, Salinas was the passenger of a vehicle that was stopped for a traffic violation.  The driver gave consent to search the vehicle during which time law enforcement officers discovered a pistol under the passenger seat.  Salinas admitted the pistol was his and that he was a convicted felon.  Further investigation revealed Salinas had been previously convicted of aggravated robbery in Jefferson County in 2007.  As such, he is prohibited from owning or possessing firearms or ammunition.  Salinas was indicted by a federal grand jury on Feb. 22, 2021.

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 Port Arthur Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Matt Quinn.

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BEAUMONT, Texas – A Port Arthur man has pleaded guilty to hurricane-related fraud in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Jose Luis Carrillo, 50, pleaded guilty to an information charging him with fraud in relation to a major disaster or emergency benefits today before U.S. Magistrate Judge Keith F. Giblin.

“Defrauding federal programs is always an egregious act,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Disaster relief fraud is even more serious because of the limited nature of the funds intended to assist people in their time of greatest need.”

Department of Homeland Security Inspector General Joseph V. Cuffari stated, “This investigation and resulting plea demonstrates our continued commitment to identify and investigate all allegations of fraud to protect the integrity of FEMA programs funded by the taxpayer.   Theft of funds from DHS programs intended to help those in need will not be tolerated.”

According to information presented in court, Hurricane Harvey made landfall in southeast Texas in August 2017, causing extensive damage to the region.  On Sep. 21, 2017, Carrillo applied for assistance from the Federal Emergency Management Agency (FEMA) for a damaged dwelling located on Luis Drive in Port Arthur.  Carrillo stated that he owned the damaged dwelling and that it was his primary residence. Carrillo received a total of $23,619.70 in FEMA assistance for rental expenses and home repairs.  The actual residents of the residence also submitted an application, but were denied benefits.  An investigation determined that the actual residents had lived at the location from July 2017 until they moved out at the end of August 2017, after Hurricane Harvey struck.  Carrillo admitted that he fraudulently represented the home was his primary residence to obtain FEMA funds. 

Carrillo faces up to 30 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 was investigated by the Department of Homeland Security Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Rachel Grove.           

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SHERMAN, Texas – A Prosper, Texas woman has been sentenced to 15 years in prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Kaci Brianne Stephens, 41, pleaded guilty on Feb. 26, 2021 to wire fraud and was sentenced to 180 months in federal prison on July 6, 2021 by U.S. District Judge Amos L. Mazzant, III.  Stephens was also ordered to pay restitution of $11,528.26.

“The public cannot, and should not, tolerate any person who abuses professional trust for their own personal gain,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Thanks to our good partnership with IRS-CI, we were able to stop this fraud and hopefully prevent even more people being victimized.”

“The defendant’s hefty sentence reflects the severity of her multiple violations of basic fiduciary responsibility while working as a trusted customer service representative,” stated Acting Assistant Special Agent in Charge Dan Elliott. “IRS-CI agents will continue to hold accountable corrupt employees who use their access to customers’ sensitive financial information for their own personal gain.” 

According to information presented in court, between 2007 and Sep. 10, 2015, Stephens was employed by Compass Foreign Exchange, LLC as a customer service representative, responsible for establishing new customer accounts, which provided her access to customer credit card information.  During this time, Stephens devised a scheme to fraudulently charge customers for her personal benefit.  To facilitate the scheme, Stephens used a merchant accounting service to set up a fraudulent merchant account using another individual’s name.  Stephens used that individual’s name without their consent and because she had access to their personal identifying information, including their Social Security number.  Through creation of the merchant account, Stephens billed Compass customers and obtained payments by charging their credit cards for services they did not request, including setting up recurring automated payments to regularly deposit funds into her personal bank account.  Stephens was indicted by a federal grand jury on June 12, 2019 and charged with federal violations.

This case was investigated by the Internal Revenue Service-Criminal Investigation and prosecuted by the Plano office of the Eastern District of Texas.          

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PLANO, Texas – A McKinney man has been sentenced to prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Demetrius Cervantes, 46, pleaded guilty on Dec. 4, 2020, to conspiracy to obtain information from a protected computer on Dec. 4, 2020, and was sentenced to 48 months in federal prison today by U.S. District Judge Sean D. Jordan.

“Today’s sentence sends the message that the theft of protected health information, the fabrication of physicians’ orders, and the sale of prescriptions will not be tolerated in the Eastern District of Texas,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This office will continue to pursue those who place profits over patients and manipulate the healthcare system for their personal gain.”

According to information presented in court, Cervantes, Amanda Lowry, and Lydia Henslee, were named in a federal indictment on Sept. 11, 2019 charging them with conspiracy to obtain information from a protected computer and conspiracy to unlawfully possess and use a means of identification.  They are alleged to have breached a health care provider’s electronic health record (EHR) system in order to steal protected health information and personally identifiable information belonging to patients.  This stolen information was then “repackaged” in the form of false and fraudulent physician orders and subsequently sold to durable medical equipment (DME) providers and contractors.  The defendants obtained more than $1.4 million in proceeds from the sale of the stolen information.  The defendants used those proceeds to purchase items such as sport utility vehicles, off-road vehicles and jet skis.    

Lowry pleaded guilty to conspiracy to obtain information from a protected computer and is set to be sentenced on July 22, 2021.

On Nov. 18, 2020, Henslee was charged in a ten-count superseding indictment with one count of conspiracy to unlawfully transfer, possess, and use a means of identification, and nine counts of unlawfully transferring, possessing, and using a means of identification.   

Henslee was also charged in a separate superseding indictment along with Steven Churchill, 34, of Boca Raton, Florida, Samson Solomon, 23, of West Palm Beach, Florida, David Warren, 50, of Boca Raton, Florida, and Daniel Stadtman, 67, of Allen, Texas, with one count of conspiracy to commit illegal remunerations. 

According to the superseding indictment, the defendants are alleged to have conspired to pay and receive kickbacks in exchange for orders from physicians that were subsequently used to obtain payments from federal health care programs.  The conspirators obtained patient information, including protected health information and personally identifiable information, and used the information to create fictitious physician orders.  The conspirators then sold the physicians’ orders to each other and to other DME providers.  Within approximately eight months, the defendants collectively obtained more than $2.9 million in proceeds from the criminal scheme. 

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federally funded programs, including Medicare, Medicaid, and TRICARE.  If convicted, the defendants each face up to five years in federal prison.

Henslee pleaded guilty to conspiring to possess and use means of identification in connection with various offenses on March 25, 2021.  A sentencing date has not been set. 

These cases were investigated by the U.S. Department of Health and Human Services, Office of Inspector General; U.S. Department of the Treasury, Internal Revenue Service, Criminal Investigation; and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service.  They are being prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and Adrian Garcia and Special Assistant U.S. Attorney Bethany Pickett.            

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PLANO, Texas – A Gainesville convicted felon has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

William Randall Brannan, 39, was convicted by a jury on Feb. 21, 2020, of being a felon in possession of a firearm and two counts of possession of a firearm in furtherance of a drug trafficking crime.  Brannan was sentenced to 272 months in federal prison today by U.S. District Judge Sean D. Jordan.

“Getting firearms out of the hands of prohibited persons is a critical part of the Department’s efforts to reduce violent crime in our neighborhoods,” said Acting U.S. Attorney Nicholas J. Ganjei. “Today’s sentence sends a strong message that violent criminals who utilize firearms to deal narcotics will be aggressively prosecuted and held accountable to fullest extent of the law.”

According to information presented in court, in January 2019, Brannan, while delivering methamphetamine, discharged a firearm in a Gainesville residence, and again outside the home, while attempting to intimidate others into returning methamphetamine which he believed had been stolen from him.  On Feb. 28, 2019, Brannan was located in Arlington, Texas and fled as law enforcement officers attempted to arrest him.  He then led police on a high-speed chase before crashing the vehicle.  The gun used in the Gainesville shooting was found in the vehicle.  Further investigation revealed Brannan was a convicted felon and prohibited from owning or possessing firearms or ammunition.  Brannan was indicted by a federal grand jury on March 14, 2019.

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 Cooke County Sheriff’s Office, the Arlington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorneys Matthew Johnson and Chris Eason.

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TYLER, Texas – A Terrell man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Cory Joe Phillips, 39, pleaded guilty on March 8, 2021, to possession with intent to distribute and distribution of methamphetamine. Today, Phillips was sentenced to 60 months in federal prison by U.S. District Judge J. Campbell Barker.

“We thank our law enforcement partners for their diligence in investigating drug trafficking crimes and protecting the public from those who deal illicit substances,” said Acting U.S. Attorney Nicholas J. Ganjei. “Drug traffickers in the Eastern District of Texas will not escape justice.”

According to documents and information presented in court, Phillips distributed methamphetamine in Van Zandt County on multiple occasions over a four-month period in late 2019 and early 2020.  In one instance, Phillips was in possession of a 12-gauge shotgun.

This case was investigated by the U.S. Drug Enforcement Administration, the Canton Police Department and the Van Zandt County Sheriff’s Office.  The case was prosecuted by Assistant U.S. Attorney Allen Hurst.

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A Louisiana man pleaded guilty Tuesday to conspiring with members of the Aryan Circle (AC) and others to sell methamphetamine. He is the fourth and final defendant charged in the conspiracy to enter a guilty plea.

According to court documents, Shane Louque, 46, of Gonzales, purchased substantial quantities of methamphetamine – at least two kilograms – from an AC member based in the Houston area over a number of occasions in 2016. Louque then personally distributed the methamphetamine to other buyers in Louisiana. While Louque himself is not known to be an AC member, the drug conspiracy was uncovered as part of Operation Noble Virtue, an investigation into the AC that has targeted AC leadership. Previously entering guilty pleas as part of this conspiracy were Jeremy Klintman, 38, of Texas; Eulalio Torres-Cadenas, 43, of Mexico; and Breanna Beckley, 40, of Texas.

Louque pleaded guilty to conspiracy to possess with intent to distribute at least 500 grams of a mixture or substance containing methamphetamine, a Schedule II controlled substance, which carries a mandatory minimum term of imprisonment of 10 years and a maximum prison sentence of life. A sentencing date has not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas made the announcement.

This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Drug Enforcement Administration. Trial Attorneys Alexander Gottfried and Bethany Lipman of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Christopher Rapp for the Eastern District of Texas are prosecuting 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.

BEAUMONT, Texas – Three individuals connected to the Aryan Circle (AC) prison gang have pleaded guilty to federal violations, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Anthony Levi Cochran, 39, of Bullard, Texas pleaded guilty today to charges related to an October 2016 violent assault in the Eastern District of Texas.  Specifically, he admitted to assault resulting in serious bodily injury in aid of racketeering, as well as conspiracy to sell firearms to a convicted felon. Cochran committed the assault as part of his membership in the AC.

Additionally, Breanna Beckley, 40, of Moberly, Missouri, pleaded guilty on June 29, 2021, to conspiracy to possess with intent to distribute a controlled substance, namely 500 grams or more of a mixture or substance containing methamphetamine. Shane Louque, 46, of Gonzales, Louisiana, pleaded guilty to the same charges today.

“In the battle against organized, multistate criminal organizations, agency cooperation is essential,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Criminals carry on their illegal and violent conduct in whatever jurisdiction benefits them the most, so we need to bring the fight to them, wherever they might be.”

The AC is a violent, white supremacist organization that originated in the Texas Department of Corrections and operates in federal prisons across the country, as well as outside prisons in states including Texas, Arkansas, Louisiana, and Missouri. The AC enforces its rules and promotes discipline among its members, prospects, and associates through murder, attempted murder, assault, and threats. Members, and oftentimes associates, are required to follow the orders of higher-ranking members without question.

Cochran’s offense conduct included planning and participating in the events surrounding a violent beating of another AC member who wanted to switch his gang affiliation, or “patch over,” from the AC to a different gang. Cochran and other AC members carried out the attack in order to “X,” or remove, the AC member from the gang, because it violated the AC’s rules to join another organization.  According to court documents, Beckley transported between 1.5 and 5 kilograms of methamphetamine in 2016, from Houston, Texas, to buyers in Louisiana, such as Louque and other AC members. The drug conspiracy that Beckley and Louque pleaded to was uncovered as part of Operation Noble Virtue, an investigation into the AC that has targeted AC leadership.

Cochran was indicted by a federal grand jury on Oct. 7, 2020.  He faces up to 20 years in federal prison.  Beckley and Louque were also indicted on Oct. 7, 2020, and each face up to life in federal prison.  The maximum statutory sentences prescribed by Congress are provided here for information purposes, as the sentencings will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  Sentencing hearings will be scheduled after the completion of presentence investigations by the U.S. Probation Office.

This case is being investigated by an Organized Crime Drug Enforcement Task Force (OCDETF) consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) Prosecutor’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office.

Assistant U.S. Attorney Christopher Rapp of the Eastern District of Texas is prosecuting these cases along with trial attorneys from the Organized Crime and Gang Section of the Department of Justice.

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BEAUMONT, Texas – A Beaumont man has pleaded guilty to a federal firearms violation in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

George Broussard, also known as Man, 32, pleaded guilty to possession of a firearm by a prohibited person today before U.S. Magistrate Judge Keith Giblin.

“Today’s guilty plea is another victory for the Department of Justice’s Project Safe Neighborhoods program and our effort to help make Beaumont a safer community,” said Acting U.S. Attorney Nicholas J. Ganjei.  “My office, along with the Beaumont Police Department and our other local, state, and federal law enforcement partners, will never stop working to keep firearms out of the hands of violent criminals.”

According to court documents, on March 9, 2021, Broussard was observed by law enforcement officers driving a vehicle without a front license plate in the 3700 block of Magnolia in Beaumont.  When officers began to follow the vehicle, Broussard tossed a firearm from the vehicle and sped off.  Broussard was apprehended and the firearm was recovered.  Further investigation revealed that Broussard had an extensive criminal record including felony convictions for burglary of a building; unauthorized use of a vehicle; evading arrest with a vehicle; theft from a person; aggravated robbery; and two convictions for possession of a controlled substance, all in Jefferson County, Texas.  As such, Broussard is prohibited from owning or possessing firearms or ammunition.

Broussard was indicted by a federal grand jury on April 27, 2021.  He faces up to 10 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 being 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 is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Matthew Quinn.

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SHERMAN, Texas – A Honduran man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Oscar Ruiz Colon, 41, pleaded guilty on Feb. 4, 2021, to conspiracy to manufacture and distribute cocaine knowing it would be imported into the United States and was sentenced to168 months in federal prison today by U.S. District Judge Amos L. Mazzant, III.

“The great work of law enforcement in this case demonstrates that criminals cannot avoid federal prosecution by conducting their activities abroad,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We will continue to aggressively fight the scourge of drug trafficking at the source, no matter how far away or well-concealed the offenders might be.”

“Criminals who attempt to broker and facilitate cocaine shipments into the United States will meet swift justice through DEA’s tireless efforts to dismantle Transnational Criminal Organizations across the world,” said DEA Special Agent in Charge Eduardo A. Chávez. “We applaud our South American counterparts to remain committed to the rule of law and the DEA will continue to work together to ensure consequences come to those who profit from illicit drugs in our neighborhoods.”

According to information presented in court, beginning sometime in 2017, Colon, a resident and national of Honduras, was a member of a drug trafficking organization responsible for multi-ton cocaine shipments which originated from Colombia, Ecuador, Panama, Costa Rica, Guatemala, and Mexico for further distribution to the United States.  Airplanes, go-fast boats, semi-tractor trailer trucks, and passenger vehicles were used to transport most of the cocaine shipments.  A federal grand jury returned an indictment charging Colon with federal drug trafficking violations on August 8, 2018.

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 U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Colleen Bloss.

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BEAUMONT, Texas – A Port Arthur man has pleaded guilty to a federal firearms violation in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jarrel Jakeem Joseph, 25, pleaded guilty to receipt of a firearm while under indictment today before U.S. District Judge Michael J. Truncale.

“We take violent crime seriously in Southeast Texas, and violent individuals who possess firearms will be held accountable,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Today’s guilty plea represents another step forward in making Port Arthur a safer community.”

According to court documents, on March 31, 2021, Joseph and several other individuals were observed fighting by law enforcement in the 1600 block of Vicksburg Avenue in Port Arthur.  Joseph left the fight on foot and was observed discarding an object, which was found by law enforcement and determined to be a stolen semiautomatic pistol.  Further investigation revealed that on Oct. 8, 2020, Joseph was placed on probation for seven years after a deferred adjudication of guilt for felony possession of a controlled substance in Jefferson County, Texas.  Joseph is prohibited from possessing or receiving firearms as part of the deferred adjudication.

Joseph was indicted by a federal grand jury on May 13, 2021.  He faces up to five 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 being 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 is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Port Arthur Police Department and prosecuted by Assistant U.S. Attorney Matthew Quinn.

BEAUMONT, Texas – A physician practicing in Beaumont has been sentenced to prison for federal health care fraud violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Grigoriy T. Rodonaia, 45, of Port Neches, Texas, was convicted by a jury on Nov. 17, 2020, of 12 counts of health care fraud, three counts of aggravated identity theft, and one count of making a false statement.  Rodonaia was sentenced to 84 months in federal prison today by U.S. District Judge Marcia Crone.  Rodonaia was additionally ordered to pay $195,607.76 in restitution.

“Mr. Rodonaia’s sentence is well deserved. His criminal acts inflicted significant financial harm on the TRICARE system and involved identity theft from military service members and their families,” said Acting U.S. Attorney Nicholas J. Ganjei. “Targeting health care fraud in all its forms remains a top priority for the U.S. Attorney’s Office for the Eastern District of Texas.”

Rodonaia, a physician practicing in Beaumont with Rodonaia Family Medicine and Aesthetics, was indicted on March 18, 2020.  According to information presented in court, beginning in January 2015, Rodonaia participated in a health care fraud scheme by issuing prescriptions for specially compounded scar creams using the names, dates of birth, and Health Insurance Claim Numbers of TRICARE beneficiaries, and caused the prescriptions to be forwarded directly to Memorial Compounding Pharmacy in Houston, Texas.  These prescriptions were issued without consultation with the patient and without the patient’s knowledge.  The pharmacy billed the prescriptions to the military health care program, TRICARE, at approximately $9,000 to $13,000 per prescription, with multiple refills authorized per prescription. Rodonaia issued over 600 prescriptions in the names of approximately 140 beneficiaries in furtherance of this scheme.  Before the scheme could be detected, TRICARE paid approximately $6.7 million in TRICARE funds to Memorial Compounding Pharmacy.  Further, to conceal his criminal activity, Rodonaia forged patient records to create the false appearance that he had examined those patients, and he submitted the fraudulent records to the Defense Health Agency in response to an audit.

This case was investigated by the Defense Criminal Investigative Service, the Drug Enforcement Administration, Health and Human Services – Office of Inspector General, and the Texas Medicaid Fraud Control Unit. Assistant U.S. Attorneys John B. Ross and Robert A. Wells prosecuted this case.

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BEAUMONT, Texas – A Beaumont engineer has been sentenced for his participation in a scheme to file two fraudulent loan applications seeking more than $13 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, announced Eastern District of Texas Acting U.S. Attorney Nicholas J. Ganjei today

Shashank Rai, 31, pleaded guilty on Feb. 9, 2021, to making false statements to a bank and was sentenced to 24 months in federal prison today by U.S. District Judge Marcia A. Crone.  Rai admitted that he sought millions of dollars in forgivable loans guaranteed by the SBA by claiming to have 250 employees earning wages when, in fact, no employees worked for his purported business. In the application submitted to the first lender, Rai sought $10 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of $4 million. In the second application, Rai sought approximately $3 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of approximately $1.2 million.

“The Payroll Protection Program was designed to provide financial support during the COVID-19 pandemic to real American businesses with real employees,” said Acting U.S. Attorney Nicholas J. Ganjei.  “It was not designed to provide loans to individuals for personal investment purposes. Today’s sentence demonstrates our shared commitment to protecting this important, taxpayer-funded program.”

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

This case was investigated by the FHFA-OIG, FDIC-OIG, SBA-OIG, and USPIS. Assistant Chief L. Rush Atkinson and Trial Attorney Lou Manzo of the Criminal Division’s Fraud Section, and Assistant U.S. Attorneys Nathaniel Kummerfeld and Frank Coan prosecuted the case.

The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at:  https://www.justice.gov/criminal-fraud/ppp-fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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TYLER, Texas – An Athens, Texas man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Matthew Don Herrington, 49, pleaded guilty on Dec. 12, 2020, to possession with intent to distribute methamphetamine and was sentenced to 120 months in federal prison on June 16, 2021, by U.S. District Judge Jeremy D. Kernodle.

“Drug dealers who pump poison into our communities will face certain and severe consequences,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Our office will continue to partner with federal, state, and local agencies to ensure our communities are safe and to bring to justice those who spread the misery of methamphetamine.”

According to documents and information presented in court, Herrington was arrested on Oct. 22, 2019 by Rusk County Sheriff’s Deputies with a quantity of methamphetamine that he intended to distribute to others, along with a firearm.  In March 2020, Rusk County Deputies learned that Herrington was still engaged in methamphetamine trafficking.  On March 25, 2020, Deputies executed a search warrant of Herrington’s home and recovered a distributable quantity of methamphetamine and another firearm.  Herrington is prohibited from possessing firearms because of multiple prior felony convictions, including a 2009 federal conviction for distribution of methamphetamine, for which he received 70 months in federal prison. 

This case was investigated by the U.S. Drug Enforcement Administration and the Rusk County Sheriff’s Office.  The case was prosecuted by Assistant U.S. Attorney Ryan Locker.

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TYLER, Texas – The final defendant has been sentenced to federal prison in a drug trafficking conspiracy in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Amber Nicole Priehs, 30, pleaded guilty on Dec. 12, 2019, to conspiracy to distribute cocaine, methamphetamine, and heroin, and was sentenced to 80 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.  Priehs was the sixth and final Palestine, Texas resident to be sentenced in the drug trafficking conspiracy. 

“The imprisonment of this drug trafficking organization is a significant victory for the citizens of Palestine and the rest of East Texas,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Our office will continue to pursue those who pump poison and misery into our communities. These defendants showed an utter lack of regard for their fellow citizens by lining their own pockets off of addiction and the decay of their own community.”

According to information presented in court, Byron Bernard Billups, Brandon Williams, and Priehs distributed large amounts of methamphetamine, cocaine, and heroin in Palestine and surrounding areas.  Billups served as the leader and primary source of supply and worked with Priehs and others to acquire kilos of methamphetamine and other drugs from sources of supply across Texas and brought them back to East Texas for distribution. Brandon Williams distributed bulk methamphetamine, cocaine, and ecstasy to wholesale and retail customers from his home in Palestine, which he shared with his uncle, Larry Williams, who also assisted with handling customers in the drug deals.  Priehs distributed bulk methamphetamine, cocaine, and heroin directly to customers and through Marcos Navarro, who reported to Priehs.  Priehs also recruited Steve Foster to store bulk drugs at his house, which he also permitted Priehs to use to meet customers.  A federal grand jury returned an indictment charging the defendants with federal drug trafficking violations on Feb. 20, 2019.

Brandon Kione Williams, 37, pleaded guilty on Sep. 21, 2020, to conspiracy to distribute drugs and was sentenced to 216 months in federal prison on March 25, 2021.  Larry Joe Williams, 65, pleaded guilty on March 9, 2020, to misprision of a felony and was sentenced to 36 months in federal prison on Oct. 13, 2020.  Byron Bernard Billups, 36, pleaded guilty on July 14, 2020, to conspiracy to distribute drugs and was sentenced to 120 months in federal prison on Dec. 17, 2020. 

Marcos Antonio Navarro, 35, pleaded guilty on March 12, 2020, to conspiracy to distribute drugs and was sentenced to 60 months in federal prison on August 11, 2020.  Steve Allen Foster, 33, pleaded guilty on March 16, 2020, to conspiracy to distribute drugs and was sentenced to 78 months in federal prison on Sep. 15, 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 U.S. Drug Enforcement Administration, Texas Department of Public Safety-CID, and the Palestine Police Department.  These defendants were prosecuted by Assistant U.S. Attorneys Ryan Locker, Colleen Bloss, and Heather H. Rattan.

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PLANO, Texas – A Costa Rican man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Felipe Espinoza-Cruz, 49, pleaded guilty on Feb. 3, 2021, to conspiracy to manufacture and distribute 5 kilograms or more of cocaine for distribution into the United States and was sentenced to 135 months in federal prison today by U.S. District Judge Sean D. Jordan.

“As this case demonstrates, drug smugglers will use any transportation method they can to bring their deadly wares to our shores,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Although the transportation network these traffickers devised and implemented was extraordinarily vast and complex, our law enforcement partners were able to identify and disrupt it, and ultimately bring the perpetrators to justice in United States courts.  This case is nothing less than a tremendous win for the American people.”

“Drug trafficking, whether on one of our local street corners or on the open sea 1500 nautical miles away still impacts the safety and security of all of our lives,” said Eduardo A. Chávez, Special Agent in Charge of the DEA Dallas Field Division.  “This sentence reflects our continued resolve to partner with our international law-enforcement counterparts to fight greed, violence, and drug addiction as we continue to combat the crises we face daily.”

According to information presented in court, from at least 2005 and continuing up until his indictment, Espinoza-Cruz, a resident and national of Costa Rica, was a member of a drug trafficking organization responsible for multi-ton cocaine shipments originating in Colombia and  then shipped to Costa Rica, Guatemala, and Mexico for further distribution to the United States.  Airplanes, go-fast boats, semi-tractor trailer trucks, and passenger vehicles were used to transport most of the cocaine shipments.  A federal grand jury returned an indictment charging Espinoza-Cruz with federal drug trafficking violations on Nov. 10, 2016.

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 U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Colleen Bloss.

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TYLER, Texas – A Floridian who moved to Sulphur Springs, Texas has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Jeremy Christopher Jones, 46, pleaded guilty to conspiracy to commit money laundering today before U.S. Magistrate Judge John D. Love.  Jones has additionally agreed to pay restitution in the amount of $438,433.00, representing the proceeds he and his recruits received and deposited.

“Multiple federal agencies worked together to dissect a complicated, international financial scheme that was bilking thousands of Americans from all over the country out of hard-earned funds,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Together, those agencies have ensured that individuals seeking to profit from fraudulent activities have been called to account.  Today’s plea has added significance, given that it comes on the eve of World Elder Abuse Awareness Day.”

According to information presented in court, in 2014, Jones, who then lived in Florida, became involved with a money laundering operation.  He picked up funds wired to various money services businesses, such as MoneyGram and Western Union.  Jones created fictitious companies and opened bank accounts in the names of these businesses, and then deposited the money into the accounts for the fake companies.  The wired funds were actually fraud proceeds obtained from victims of various schemes, including loan modification scams, IRS impersonation scams, and credit card scams. 

Jones relocated to Sulphur Springs, Texas in 2015, but continued his money laundering activities.  He made pickups of wired victim funds, and also recruited others, supervised their activity.  Jones was paid a percentage of the cash and money orders that he and his recruits picked up.  He returned to Florida in 2018 and resumed his money laundering operations there. 

Jones was indicted by a federal grand jury on June 29, 2020.  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. 

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 is being investigated by the Internal Revenue Service-Criminal Investigations; Housing and Urban Development-Office of Inspector General; the United States Secret Service; and Treasury Inspector General-Tax Administration and prosecuted by Assistant U.S. Attorneys Alan Jackson and Frank Coan.

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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 Acting U.S. Attorney Nicholas J. Ganjei.

Derionte Chrishaun Thomas, aka, Shug, 25, pleaded guilty on Feb. 24, 2021, to being a felon in possession of a firearm and was sentenced to 100 months in federal prison today by U.S. District Judge Michael J. Truncale.

“Felons who possess firearms, and certainly those who possess firearms in connection with other felony offenses, will receive swift justice in the Eastern District of Texas,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This violent felon is now off the streets of Beaumont for a considerable time thanks to the hard work of the Beaumont Police Department and the ATF.”

According to information presented in court, on Sep. 24, 2020, Beaumont police officers responded to a call regarding a theft and aggravated assault at Parkdale Mall in Beaumont.  Upon arrival, officers spoke to the victim, who told officers that men in a black SUV stole her purse in the parking lot, and that the driver pointed a handgun at her face.  A short time later, officers located the black SUV parked at Smoke Deez Smoke Shop in Beaumont, and observed three males, including Thomas, exiting the smoke shop and walk towards the SUV. Officers engaged the suspects, who fled on foot.  During this pursuit, officers saw Thomas discard a handgun.  All three individuals were eventually caught and placed in custody, and the victim’s purse was found inside the black SUV. The handgun that Thomas tossed was also recovered.  Further investigation revealed Thomas was a convicted felon having previously been found guilty of unauthorized use of a vehicle in 2016 in Harris County; unlawful possession of a firearm by a felon in 2017 in Jefferson County; and continuous family assault in 2017 in Jefferson County.  As a convicted felon, Thomas is prohibited from owning or possessing forearms or ammunition.  Thomas was indicted by a federal grand jury on Oct. 27, 2020.

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 Matt Quinn.

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SHERMAN, Texas – An Allen man was found guilty by a jury of federal child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Clay Melton Denton, 56, was found guilty of distribution, receipt and possession of child pornography today by a jury following a five-day trial before U.S. District Judge Amos L. Mazzant, III.

“Those that view and trade child pornography perpetuate a cycle of exploitation and abuse by providing a market for producers,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas will do whatever it takes to stamp out this terrible industry—and make no mistake, it is indeed an industry—doing so with the help of our federal, state, and local law enforcement partners.”

“The sheer volume of devices and images recovered by investigators in this case is astounding. I commend the FBI’s Child Exploitation Task Force, the Garland and Plano Police Departments and the North Texas Regional Computer Forensics Laboratory for their diligence in processing evidence to best serve justice in this investigation,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “With our partners, we are committed to ensuring that distributors of abusive content are held accountable so that we can protect our population’s most vulnerable members.”

“This important collaboration with our local area and Federal law enforcement partners continues to keep catching these criminals in an effort to keep our communities safe,” said Plano Police Chief Ed Drain.  “We are very appreciative all those involved in this case.” 

“I am proud of the work that our police department is doing, and cases like these showcase the importance and effectiveness of working together not only locally but federally,” said Garland Police Chief Jeff Bryan.  “The safety of our communities is the top priority, and these are the types of folks we need off our streets.”

According to the court documents and testimony at trial, in January and March 2018, undercover officers with the Plano Police Department and the Garland Police Department received child pornography, via an online platform, that had been distributed to them by a computer user.  The officers traced the online conduct to the Denton residence in Allen, Texas.  Members of the FBI obtained a search warrant for the residence, which they served on April 25, 2018.  The searching team discovered multiple digital devices in the residence, including server racks, network area storage devices, laptops, hard drives, cellular phones, and digital storage media. Agents testified that the entire second story of the house was filled with floor-to-ceiling book cases storing digital devices, manuals, and peripherals.  Additional testimony revealed that forensic analysis of the seized devices took almost one year.  During this forensic analysis, personnel discovered tens of thousands of images and videos of child pornography.  Specifically, evidence demonstrated that a laptop belonging to Denton and located on one of his desks contained the same software used to distribute child pornography to the undercover officers.  That software was also used to obtain child pornography, which was saved on a different portion of Denton’s computer.  Evidence also revealed that child pornography was located on a 60+ terabyte storage device that Denton owned and possessed.  A federal grand jury returned an indictment charging Denton with federal violations on Sep. 11, 2019.

On June 11, 2021, the jury returned a guilty verdict on all counts of the indictment.  Under federal statutes, Denton 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 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 Plano Police Department, Garland Police Department and the FBI Dallas Child Exploitation Task Force and prosecuted by Assistant U.S. Attorneys Marisa Miller and Maureen Smith.

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TYLER, Texas – A Carthage man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Tyreese Williams, 34, pleaded guilty on March 3, 2021, to being a felon in possession of a firearm and was sentenced to 72 months in federal prison today by U.S. District Judge J. Campbell Barker.

“Felons who possess firearms endanger our communities and are a priority for federal prosecution,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Our office will continue to partner with federal, state, and local agencies to keep firearms out of the wrong hands.  As a seven-time convicted felon, Tyreese Williams should have expected this day of reckoning.”

According to information presented in court, Williams was arrested on May 2, 2019 by deputies of the Panola County Sheriff's Office following a nine-mile high-speed chase where Williams’ speed exceeded 120 miles per hour.  Subsequent to Williams’ arrest, deputies searched Williams’ car and found a handgun.  While being placed under arrest, Williams informed the deputies that he had swallowed a large amount of methamphetamine just prior to surrendering to police. 

Among his seven prior felony convictions, Williams has previously been convicted of evading detention in a motor vehicle, possession of a controlled substance (twice), felon in possession of a firearm, forgery (twice), and assault family violence by impeding an airway or circulation.  As a convicted felon, Williams is prohibited from owning or possessing firearms or ammunition. Williams was indicted by a federal grand jury on March 15, 2020.

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 Panola County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Ryan Locker.

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BEAUMONT, Texas – The United States Attorney’s Office for the Eastern District of Texas is pleased to announce the latest guest in its EDTX Distinguished Speaker Series, Judge Kenneth Kiyul Lee of the U.S. Court of Appeals for the Ninth Circuit.

Judge Lee has served on the Ninth Circuit since June 2019.  Prior to joining the court, he was a partner in the Los Angeles office of Jenner & Block.  From 2006 to 2009, Judge Lee was Associate Counsel and Special Assistant to the President.  He has also served as a special counsel on the United States Senate Judiciary Committee and was an associate at Wachtell, Lipton, Rosen & Katz from 2001 to 2006.  Judge Lee is no stranger to Texas – he began his legal career as a law clerk to Fifth Circuit Judge Emilio M. Garza from 2000 to 2001.

Judge Lee was born in South Korea and is only one of three Korean Americans to serve on any United States Courts of Appeal.

“The Eastern District is fortunate to have Judge Lee speak to us today.  It is particularly fitting to hear from Judge Lee shortly after we celebrated Asian American and Pacific Islander Heritage Month,” said Acting U.S. Attorney Nicholas J. Ganjei. “In his brief service as federal judge, Judge Lee has already distinguished himself for his clear writing and sharp legal analysis.  I am confident Judge Lee will continue his excellent service to our Nation and the rule of law for years to come.”

Judge Lee is a graduate of Cornell University (summa cum laude) and Harvard Law School (magna cum laude).

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BEAUMONT, Texas – A Nacogdoches man has been sentenced to federal prison for drug trafficking and firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Marcus Bernard Tutt, 42, pleaded guilty on Jan. 27, 2021, to possession with intent to distribute methamphetamine and use of a firearm during a drug trafficking crime and was sentenced to 222 months in federal prison today by U.S. District Judge Michael J. Truncale.

“Methamphetamine abuse has a tremendously negative effect on our local communities, touching upon every facet of our daily lives” said Acting U.S. Attorney Nicholas J. Ganjei.  “Ensuring the health and safety of East Texas begins with prosecutions like this case, and you can expect EDTX to maintain its aggressive posture in prosecuting meth trafficking.”

According to information presented in court, on Nov. 25, 2019, Tutt was stopped by a trooper with the Texas Department of Public Safety for a traffic violation and was arrested for driving without a valid license.  During a subsequent search of Tutt’s vehicle, the trooper located 100 grams of methamphetamine and a revolver. Tutt has numerous prior felony convictions, including possession of a controlled substance, credit card abuse, unlawful possession of a firearm by a felon, attempted obstruction, forgery, aggravated assault with a deadly weapon, and multiple convictions for delivery of a controlled substance. As a convicted felon, Tutt is prohibited from owning or possessing firearms or ammunition.  Tutt was indicted by a federal grand jury on August 19, 2020.  

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, the Texas Department of Public Safety and the Angelina County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Donald S. Carter.

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PLANO, Texas – A Guatemalan man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jose Ramon Reyes Villagran, 37, pleaded guilty on Sep. 1, 2020, to conspiracy to import cocaine into the United States and manufacturing, distributing, and importing cocaine into the United States and was sentenced to 292 months in federal prison today by U.S. District Judge Sean D. Jordan.

“Despite the sophisticated network of land, sea, and air smuggling routes, it wasn’t enough to conceal the criminal activities of Mr. Villagran and his associates from American investigators and our overseas law enforcement allies,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The long arm of the American justice system extends even overseas, and brings international drug traffickers and their conspirators to our shores to face justice in American courts.”

According to information presented in court, Villagran, a resident and national of Guatemala, was a member of a drug trafficking organization responsible for multi-ton cocaine shipments which originated from Columbia.  The drugs were then shipped to Costa Rica, Guatemala, and Mexico for further distribution to the United States.  Airplanes, go-fast boats, semi-tractor trailer trucks, and passenger vehicles were used to transport most of the cocaine shipments.  Villagran was involved with coordinating airplanes used to transport cocaine shipments departing from Colombia and Venezuela to arrive at his clandestine landing strips in Guatemala.  Thereafter, he distributed the bulk cocaine to his customers in Guatemala and Mexico.  A federal grand jury returned an indictment charging Villagran with federal drug trafficking violations on August 8, 2018.

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 U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Colleen Bloss.

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PLANO, Texas – A Dallas man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Charles Jerome Bowman, 54, pleaded guilty on Dec. 1, 2020, to being a felon in possession of a firearm and was sentenced to 210 months in federal prison today by U.S. District Judge Sean D. Jordan.

“Keeping firearms out of the hands of dangerous criminals is essential to protecting our communities,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Today’s sentencing sends a strong message that the possession of firearms by convicted felons will be aggressively prosecuted.”

According to information presented in court, on March 24, 2019, a deputy with the Cooke County Sheriff's Office responded to a call regarding a reckless driver on Interstate 35. The deputy stopped the reported vehicle and identified the driver as Bowman. The deputy requested that Bowman exit the vehicle to issue a warning for defective equipment and because Bowman was showing signs of intoxication.  Bowman refused to comply and became combative.  He was wearing a holster containing a Phoenix Arms .25 caliber pistol.  Bowman was subsequently arrested and transported to the Cooke County Jail. Upon arrival at the jail, Bowman threated to kill two of the officers.  A criminal history check revealed that Bowman had numerous prior felony convictions, including robbery, aggravated assault, and aggravated robbery.  Bowman was indicted by a federal grand jury on Oct. 9, 2019. 

This case is being 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 Cooke County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Matthew T. Johnson.

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PLANO, Texas – Two Dallas brothers have been found guilty of drug violations related to a 2019 overdose in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jose Antonio Carreto, 30, and his brother, Isauro Carreto-Cruz, 32, were found guilty by a jury of all counts: conspiracy and distribution of heroin resulting in seriously bodily injury, conspiracy to possess with intent to distribute and distribution of methamphetamine, and possession with intent to distribute and distribution of heroin resulting in serious bodily injury aiding and abetting.  The verdict was reached today following a five-day trial before U.S. District Judge Sean D. Jordan.

According to information presented in court, on Sep. 25, 2019, law enforcement authorities responded to a heroin overdose on a Plano highway.  The victim was administered Narcan and survived the overdose.  An investigation revealed the Carreto brothers had supplied the heroin used in the overdose. 

“As long as the scourge of heroin continues to devastate lives, so too will we continue to aggressively seek out and prosecute the perpetrators,” said Acting U.S. Attorney Nicholas J. Ganjei. “Drug dealers should know that they’re not only on the hook for dealing drugs, but they’re also going to be held responsible for injuries or death stemming from their deadly wares.  With this conviction and others like it, hopefully more lives will be saved.”

Jose Antonio Carreto and Isauro Carreto-Cruz were indicted by a federal grand jury on Nov. 13, 2019.  Jose Antonio Carreto faces up to life in federal prison. Isauro Carreto-Cruz faces up to 40 years in federal prison.  The maximum statutory sentences prescribed by Congress are provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  Sentencing hearings will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Plano Police Department, the Texas Department of Public Safety and the Plano Fire Department and prosecuted by Assistant U.S. Attorneys Colleen Bloss and Ernest Gonzalez and Special Assistant U.S. Attorney Bethany Pickett.

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BEAUMONT, Texas – A Houston man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jeremy Klintman, 38, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance today before U.S. Magistrate Judge Zack Hawthorn.

According to information presented in court, a law enforcement investigation from May 2016 through August 2016, revealed that Klintman was supplying methamphetamine to others, including members of the Aryan Circle, for trafficking in Houston, Southeast Texas, and Southwest Louisiana.  

“Trafficking methamphetamine in the Eastern District of Texas is going to result in a knock on the door from law enforcement,” said Acting U.S. Attorney Nicholas J. Ganjei. “Ensuring safe communities in Southeast Texas is a top priority for EDTX, and shutting down the methamphetamine trade is a lynchpin of that effort.”

Klintman was indicted by a federal grand jury on Oct. 7, 2020 and 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 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 U.S. Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Texas Department of Public Safety, and Houston Police Department and prosecuted by Assistant U.S. Attorney Christopher Rapp and Trial Attorney Alexander Gottfried with the Department of Justice’s Organized Crime and Gang Section (OCGS).

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BEAUMONT, Texas – A Houston man has been sentenced to prison for federal violations related to identity theft in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

French Latrelle Carpenter, 45, pleaded guilty on Feb. 4, 2021, to access device fraud and was sentenced to 40 months in federal prison today by U.S. District Judge Michael J. Truncale.

“Anybody who has ever been a victim of identity theft can attest to how stressful the experience can be and how difficult it can be to get your finances back in order,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Identity theft wreaks havoc on the finances of its victims, which can take literally years to repair.  Criminals that victimize others through identity theft in the Eastern District of Texas should expect to receive a visit from law enforcement.”

According to information presented in court, a search of Carpenter’s vehicle on August 28, 2020 produced four credit card skimmers, a laptop computer, blank credit cards and several birth certificates bearing the names of other individuals. A search of the laptop, pursuant to a search warrant, revealed more than 100 credit card numbers and names along with personal identifying information for three individuals.  The computer also contained a user guide for card/magnetic strip reader/writer software, a document related to credit card fraud and an internet search history related to the buying of stolen credit card data.

Carpenter was indicted by a federal grand jury on Nov. 4, 2020, and charged with federal violations. 

This case was investigated by Homeland Security Investigations and the Corrigan Police Department and prosecuted by Special Assistant U.S. Attorney Tommy L. Coleman.

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BEAUMONT, Texas – A Houston man has pleaded guilty to federal violations related to drug trafficking in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Roberto Fuentes, 42, pleaded guilty to conspiracy to launder money today before U.S. Magistrate Judge Zack Hawthorn.

“Money laundering is a key part of hiding evidence of criminal activity such as illegal narcotics distribution,” said Acting U.S. Attorney Nicholas J. Ganjei. “When we disrupt a drug trafficking organization’s ability to profit from their illegal conduct, we are helping prevent dangerous, addictive substances from being distributed in East Texas.  I continue to be grateful for the great work and dedication of the DEA and their efforts to combat all aspects of the illegal drug trade.”

According to information presented in court, Roberto Fuentes was an associate of Ruben Pulido Flores and participated in transactions to conceal currency that was the proceeds of Flores’ illegal drug trafficking. Since at least May 2017, Flores has supervised, managed and controlled a drug trafficking organization of more than five people that distributed cocaine and other narcotics in the Houston area, which was subsequently redistributed to customers throughout Southeast Texas, Atlanta, and Chicago.

Fuentes was indicted by a federal grand jury on Dec. 6, 2018 and charged with federal violations.  Under federal statutes, Fuentes 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 being investigated by the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Christopher Rapp.

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BEAUMONT, Texas – A Houston man has been sentenced to prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Aaron Lakeefe Rubins, 33, pleaded guilty on Jan. 14, 2021 to bank burglary and aiding and abetting and was sentenced to 24 months in federal prison today by U.S. District Judge Michael J. Truncale.  Rubins was also ordered to pay restitution in the amount of $6,729.66.

“As if attempting to rob an ATM was not bad enough, the high-speed chase that this defendant and his co-conspirators engaged in endangered the lives of law enforcement and the public,” said Acting U.S. Attorney Nicholas J. Ganjei. “Thankfully, law enforcement was able to bring the situation to a conclusion without any injury or loss of life.”

According to information presented in court, on March 4, 2020, law enforcement officers were alerted to an attempted theft of an ATM at the First National Bank in Woodville. A 911 caller reported a passenger car parked at an intersection just east of the bank with its hazard lights on and another car blocking an intersection just west of the bank. Additionally, a truck pulled into the bank’s parking lot and proceeded to back up to an ATM machine. Bank surveillance video shows the truck dragging a chain and three subjects exiting the truck, one with a crowbar.

Although the subjects were able to open the ATM and attach a chain to it, the truck was not able to drag away the ATM.  The subjects then got into a getaway car and a high-speed chase ensued that continued into Polk County, where spike strips were deployed.  The car struck a tree as it attempted to avoid the strips and two of the passengers ran away.  However, the rear seat passenger was taken into custody and identified as Aaron Lakeefe Rubins.  Rubins was indicted by a federal grand jury on June 3, 2020, and charged with federal violations.

This case was investigated by the Federal Bureau of Investigation, the Tyler County Sheriff’s Office and the Polk County Sheriff’s Office and prosecuted by Special Assistant U.S. Attorney Tommy L. Coleman.

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BEAUMONT, Texas – A Kemah man has been sentenced to federal prison for violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Jimmy James Mamoth, Jr., 59, pleaded guilty on July 13, 2020, to attempted bank robbery and was sentenced to 87 months in federal prison today by U.S. District Judge Marcia A. Crone. 

According to information presented in court, on Sep. 27, 2019, a witness observed Mamoth approach the entrance to the Texas First Bank in Hull, Texas, wearing a dark hooded jacket, gloves, a Halloween-style mask on his face, and carrying a duffle bag.  The witness honked his vehicle’s horn to draw attention to Mamoth, who subsequently fled into the nearby woods.  Law enforcement was able to locate and arrest Mamoth, and from him recovered an Airsoft-style replica gun meant to resemble a Beretta 9mm pistol.  Mamoth was indicted by a federal grand jury on Oct. 9, 2019.

As part of his plea agreement, Mamoth admitted his participation in a string of other robberies and attempted robberies, specifically, the robbery of the Arbor 8 movie theater in Austin, Texas, on March 17, 2019; an attempted robbery of the Benchmark Bank in West Lake Hills, Texas, on June 4, 2019; the robbery of the Broadway Bank in Wimberley, Texas, on June 19, 2019; and the robbery of the First National Bank of Hughes Springs in Kilgore, Texas, on June 28, 2019. 

“The brave actions of this witness not only stopped the bank robbery, but also put an end to the Defendant’s violent crime spree,” said Acting U.S. Attorney Nicholas J. Ganjei. “We applaud this citizen’s courage and quick thinking and extend our sincere thanks on behalf of law enforcement.”

This case was investigated by the Federal Bureau of Investigation, Beaumont Resident Agency, the Liberty County Sheriff’s Office, the Austin Police Department, the West Lake Hills Police Department, the Hays County Sheriff’s Office, and the Gregg County Sheriff’s Office and prosecuted by Assistant U.S. Attorneys Christopher Rapp and Rachel Grove.

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PLANO, Texas – A Murphy, Texas, man, pleaded guilty today to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents, Fahad Shah, 44, admitted that he sought over $3 million in PPP loans from two different SBA-approved lenders. In the first application submitted to one lender, Shah sought over $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of over $700,000. In the second application, Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. According to court documents, WBF had only two employees. In connection with both PPP loan applications, Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.

“PPP loans were intended to help businesses keep themselves and their employees afloat during the COVID-19 pandemic,” said Acting U.S. Attorney Nicholas J. Ganjei.  “PPP loans were not, and never were, intended to serve as personal loans for personal use.  By applying and qualifying for PPP funds on fraudulent grounds, Fahad Shah took advantage of the COVID-19 economic crisis to enrich himself and his family.  By seeking a loan that he should not have received, Shah helped to deplete the amount of funds available to all potential legitimate borrowers who really needed financial support.  This plea shows that the Eastern District of Texas is dedicated to pursuing fraudsters and ensuring they do not benefit from their crimes.”

Shah admitted that he obtained over $1.5 million in PPP loan proceeds. Within days of receiving the PPP funds, Shah used over $1 million in fraudulently obtained proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

Shah was indicted by a federal grand jury on June 18, 2020, and pleaded guilty to wire fraud today. Under federal statutes, Shah 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.

Acting U.S. Attorney Nicholas Ganjei of the U.S. Attorney’s Office for the Eastern District of Texas; Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Special Agent in Charge Amaleka McCall-Brathwaite of the U.S. Small Business Administration – Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG); Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG); Acting Special Agent in Charge Mark Pearson of the IRS Criminal Investigation (IRS-CI) Dallas Field Office; and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.

The SBA-OIG, FHFA-OIG, FDIC-OIG, IRS-CI, and TIGTA are investigating the case.

Assistant U.S. Attorneys Frank Coan and Robert Wells of the Eastern District of Texas and Trial Attorneys Della Sentilles and Louis Manzo of the Justice Department’s Fraud Section are prosecuting the case.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses. 

The Fraud Section leads the Department of Justice’s prosecution of fraud schemes that exploit the CARES Act. In the months since the CARES Act was passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real-estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/cares-act-fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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A Texas man pleaded guilty today to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents, Fahad Shah, 44, of Murphy, admitted that he sought over $3 million in PPP loans from two different SBA-approved lenders. In the first application submitted to one lender, Shah sought over $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of over $700,000. In the second application, Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. According to court documents, WBF had only two employees. In connection with both PPP loan applications, Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.

Shah admitted that he obtained over $1.5 million in PPP loan proceeds. Within days of receiving the PPP funds, Shah used over $1 million in fraudulently obtained proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

Shah pleaded guilty to one count of wire fraud. He is scheduled to be sentenced at a future date and faces a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Nicholas Ganjei of the U.S. Attorney’s Office for the Eastern District of Texas; Special Agent in Charge Amaleka McCall-Brathwaite of the SBA – Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency – OIG (FHFA-OIG); Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – OIG (FDIC-OIG); Acting Special Agent in Charge Mark Pearson of the IRS Criminal Investigation (IRS-CI) Dallas Field Office; and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.

The SBA-OIG, FHFA-OIG, FDIC-OIG, IRS-CI, and TIGTA are investigating the case.

Trial Attorneys Della Sentilles and Louis Manzo of the Justice Department’s Fraud Section and Assistant U.S. Attorneys Frank Coan and Robert Wells of the U.S. Attorney’s Office for the Eastern District of Texas are prosecuting the case.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses. 

The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the CARES Act passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at:  https://www.justice.gov/criminal-fraud/ppp-fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

TEXARKANA, Texas – Four individuals, including two Red River Army Depot (RRAD) officials, have been charged with federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jimmy Scarbrough, 69, of Hooks, was an RRAD supervisor and is charged by criminal complaint with conspiracy to defraud the United States and 36 counts of bribery.  Scarbrough made an initial appearance before U.S. Magistrate Judge Caroline Craven today.

Jeffrey Harrison, 43, of Texarkana, and Justin Bishop, 50, of Clarksville, both RRAD vendors, are pleading guilty today to bribery charges.  

Devin McEwin, 41, of Avery, an RRAD official, has also been charged with bribery and is scheduled to plead guilty.

“The Red River Army Depot is a key component of our nation’s defense infrastructure and is the lifeblood of the surrounding community,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Scarbrough, Harrison, Bishop, McEwin, and others exploited the public trust in order to line their own pockets, and undermined the warfighting mission of the Depot in the process.”

“These guilty pleas are a direct reflection of the tenacity and teamwork by MPFU special agents and our law enforcement partners,” said SA Ray Rayos, Special Agent-in-Charge of the Southwest Fraud Field Office, Major Procurement Fraud Unit (MPFU), U.S. Army CID. “Bribery and other fraud schemes have no place in the government contracting system and those who attempt it will be caught.”    

“Today’s announcement highlights a successful collaboration among partner agencies as we collectively hold these defendants accountable for allegedly creating a fraudulent and deceptive scheme against the government and the people of the United States. We remain committed to the aggressive pursuit of those who selfishly leverage government programs for their own personal gain,” said Dallas FBI Special Agent in Charge, Matthew J. DeSarno.

According to information presented in court, Scarbrough was the Equipment Mechanic Supervisor at the RRAD in Texarkana, Texas, a position he held from November 2001 until May 2019. Scarbrough is alleged to have directed more than $7 million in purchases from RRAD to Harrison and Bishop through the government purchase card (GPC) program.  In order to manipulate the GPC program, which is designed to ensure a competitive bidding process, Scarbrough told the vendors what to bid, including the item, the quantity, and the price.  By collecting fake bids from multiple vendors, Scarbrough was able to direct RRAD purchases to his select vendors, in this case Harrison and Bishop, while maintaining the appearance of a competitive bidding process. Scarbrough also defrauded the United States by falsely certifying that he had received the purchased items, therefore causing the RRAD to pay his select vendors.  However, the reality was that Scarborough instructed the vendors not to deliver certain RRAD-purchased items. 

Scarbrough demanded hundreds of thousands of dollars in bribes from his selected vendors. Scarbrough accepted bribes in various forms, including receiving at least $116,000.00 in U.S. Postal Service money orders from Harrison. Scarbrough also had Harrison and Bishop purchase at least $135,000.00 in car parts or services for his hot rod collection, which included a red and black 1936 Ford Tudor, an electric green 1932 Ford Coupe, a cherry red 1951 Ford F-1 truck, and more. Scarbrough received more than $27,000.00 worth of firearms from Bishop, including rare Colt handguns and Wurfflein dueling pistols. Finally, Scarbrough directed at least $32,000.00 in donations to the Hooks Volunteer Fire Department while he was the Capitan of Operations. In total, Scarbrough received more than $300,000.00 in bribe payments from Harrison and Bishop.

Scarbrough is not the only official at RRAD who accepted bribes. Devin McEwin accepted more than $21,000.00 in bribes from Harrison, including hunting trips, donations directed to the Annona Volunteer Fire Department, and the refurbishment of his 1964 Ford truck.

Under federal statutes, the defendants each face up to 15 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 being investigated by the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit; the Federal Bureau of Investigation-Dallas Division, Tyler Resident Agency, and the U.S. Postal Inspection Service.  This case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

Criminal complaints, informations and indictments are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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PLANO, Texas – A Denton, Texas, woman has been sentenced for student loan fraud in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Tiffany O’Neal, 47, pleaded guilty on Nov. 19, 2020, to student loan fraud and was sentenced to five years of federal probation and ordered to pay restitution in the amount of $234,113.00 by U.S. District Judge Sean D. Jordan on May 17, 2021. 

“Funds earmarked for student financial aid provide critical educational and professional opportunities for students,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas is committed to ensuring that those funds serve that purpose.  However, when those funds are diverted or stolen, this case shows that EDTX, along with its law enforcement partners, will take action and hold those responsible.”

“Ms. O’Neal knowingly and willfully abused her position of trust for personal gain and in doing so, defrauded the school, the Federal student aid program, and America’s taxpayers. She’ll now be held accountable for her criminal actions,” said Edd Cole, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s (OIG) Southwestern Regional Office.  “OIG Special Agents will continue to work with our law enforcement partners to aggressively pursue those who seek to enrich themselves with Federal education funds. America’s students, their families, and taxpayers deserve nothing less.”

According to court documents, between 2012 and 2017, O'Neal was both a student at the University of North Texas as well as an employee in their financial aid office.  In this role, she had the ability to approve and reject financial aid awards and grants.  During this time, she submitted fictitious expenses relating to her husband's financial aid application, approved financial aid awards to her husband to which he was not otherwise entitled, and awarded monetary grants to her husband that he should not have received.  In addition, she fraudulently obtained additional funds in her own financial aid packages.  In sum, she misappropriated approximately $230,000 in funds that were earmarked for federal financial aid grants.     

This case was investigated by the Department of Education Office of Inspector General and prosecuted by the Plano office of the United States Attorney’s Office for the Eastern District of Texas. 

PLANO, Texas – A Fannin County, Texas, woman has been sentenced to federal prison for tax evasion in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Chelsea Jolynn Tucker, 45, pleaded guilty to tax evasion on Nov. 4, 2020, and was sentenced to 14 months and 23 days in federal prison today by U.S. District Judge Sean D. Jordan today.  Tucker was also ordered to pay restitution in the amount of $779,664.00.

“Tax-related offenses often go hand-in-hand with other financial crimes, because the perpetrator needs to conceal their ill-gotten gains from government scrutiny,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Today’s sentence and restitution award will help to make the American taxpayer whole.”

According to public court records, from approximately 1997 to 2016, Tucker was employed by a staffing and contract services company located in Addison, Texas.  In her role with the company, Tucker had various financial responsibilities, including administering payroll, preparing W-2 Forms, making employment tax deposits, paying business expenses, and monitoring the company’s tax obligations using QuickBooks and TaxGuard.

Between approximately 2012 and 2017, Tucker knowingly and willfully misappropriated and embezzled funds from the company by paying herself as both an employee and a vendor, issuing herself unauthorized bonuses and fraudulent expense reimbursements, using a corporate credit card for personal purchases, and using company funds to pay personal credit cards.

Tucker also willfully attempted to evade her income tax obligations by preparing false and fraudulent W-2 Forms, which substantially underreported the income owed to the Internal Revenue Service.  In addition, Tucker failed to pay the company’s employment taxes, which she had a duty to both truthfully account for and pay. As a result of Tucker’s criminal conduct, the amount still owed to the Internal Revenue Service totals approximately $779,664.

This case was investigated by the Internal Revenue Service-Criminal Investigation and prosecuted by Assistant U.S. Attorneys in the Plano office.

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TEXARKANA, Texas – The final two defendants in a Clarksville methamphetamine conspiracy have been sentenced to federal prison in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

According to court documents, Jacory Dewayne Coulter, 35, pleaded guilty on Oct. 5, 2020, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 102 months in federal prison on May 13, 2021, by U.S. District Judge Robert W. Schroeder III.

Brandon Charles Nickerson, 42, pleaded guilty on July 1, 2020, to the same charges and was sentenced to 70 months in federal prison on April 21, 2021 by Judge Schroeder.

“Today’s sentences close the book on a methamphetamine trafficking operation, and makes the Red River County area a safer place to live and work,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This operation also showcases how effective a joint federal, state, and local law enforcement operation can be.  Expect to see similar operations in the near future.”

The U.S. Attorney’s Office will never stop fighting against the scourge of methamphetamine distribution that destroys so many lives,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We are grateful to our law enforcement partners who have also worked tirelessly to identify and disrupt these dangerous organizations.” 

Operation Big Red is a multiyear methamphetamine trafficking investigation in Red River County that has led to federal convictions of 11 men.  From at least January 2016, Counter and Nickerson were part of that conspiracy which distributed large amounts of methamphetamine in the Clarksville area.  Previously, Judge Schroeder sentenced other Mavin Earl Baty to 92 months in prison; Gregory Lamont Dillard to 102 months; Victor Gonzales to 63 months; Miguel Angel Hernandez to 78 months; Neopholis Dontray Scales to 70 months; Brian Bradley Beers to 70 months; Kevin Wayne Guess to 57 months; James Wayne Johnson to 145 months; and Billy Carl Webb, Jr., to 120 months in prison.

The Texas Department of Public Safety-CID and the Red River County Sheriff’s Office investigated the case.  Assistant U.S. Attorney Jonathan R. Hornok prosecuted the case.

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TEXARKARNA, Texas - A Frisco lawyer has been sentenced to federal prison in connection with a wire fraud scheme in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

David A. Krueger, 52, pleaded guilty on Jan. 5, 2021, to federal wire fraud violations and was sentenced to 18 months in federal prison today by U.S. District Judge Robert W. Schroeder, III.  He was also ordered to pay $350,000 in victim restitution.

“As an attorney in Texas, this defendant took an oath to act honestly and with integrity. He then violated that oath by scamming his client out of hundreds of thousands of dollars,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas will continue to hold accountable those who exploit positions of trust to defraud others.”

According to information presented in court, from February 2014 to September 2015, Krueger, an attorney licensed to practice in the state of Texas, devised a scheme to defraud current and former clients of his law practice by soliciting them to invest in and fund his outside business ventures.  Krueger represented to his clients that they would be receive guaranteed annual returns at rates of approximately ten percent of their investments.  To facilitate the scheme, Krueger persuaded a client to transfer $400,000 the client received from a legal settlement to Krueger himself for the purpose of funding a misting fan business.  Krueger used those investment funds not only for this misting fan business, but also other unrelated business ventures, as well as for his own personal benefit.  Krueger was not licensed to sell securities.  Krueger was indicted on federal charges on August 21, 2019.

This case was investigated by the Federal Bureau of Investigations – Texarkana Resident Agency and prosecuted by Assistant U.S. Attorneys Frank Coan and Jonathan Hornok.

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BEAUMONT, Texas - In honor of National Police Week, Acting U.S. Attorney Nicholas J. Ganjei recognizes the service and sacrifice of federal, state, local, and Tribal law enforcement. This year, the week is observed Sunday, May 9 through Saturday, May 15, 2021.

“This week is a time to honor our law enforcement officers who have made the ultimate sacrifice in service to our nation,” said Attorney General Garland. “I am constantly inspired by the extraordinary courage and dedication with which members of law enforcement act each day, putting their lives on the line to make our communities safer. To members of law enforcement and your families: we know that not a single day, nor a single week, is enough to recognize your service and sacrifice. On behalf of the entire Department of Justice, you have our unwavering support and eternal gratitude.”

“Law enforcement officers put their lives on the line each and every day to protect the safety and wellbeing of their fellow citizens,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Though the hours can be long, and the job fraught with peril, many brave men and women put on the badge and holster every morning to make our communities a safe place to live and work.  To these heroes—and especially to those who made the ultimate sacrifice in the line of duty—you have our deepest respect.  A grateful nation thanks you.” 

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices.  Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.  

Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty, and commitment to keeping our communities safe. This year the COVID-19 pandemic has highlighted law enforcement officers’ courage and unwavering devotion to the communities that they have sworn to serve.

During the Roll Call of Heroes, a ceremony coordinated by the Fraternal Order of Police (FOP), more than 300 officers will be honored.  Based on data submitted to and analyzed by the National Law Enforcement Officer Memorial Fund (NLEOMF), of the law enforcement officers who died nationwide in the line of duty in 2020, nearly 60 percent succumbed to COVID-19. Here in the Eastern District of Texas, four officers died in the line of duty.  A fifth officer who died in 1937 will also be included in this year’s induction.   

Additionally, according to statistics reported by the Federal Bureau of Investigation (FBI) through the Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 46 law enforcement officers died as a result of felonious acts and 47 died in accidents in 2020.  LEOKA statistics can be found on FBI’s Crime Data Explorer website. 

The names of the 295 fallen officers who have been added in 2020 to the wall at the National Law Enforcement Officer Memorial will be read on Thursday, May 13, 2021, during a Virtual Candlelight Vigil, which will be live-streamed to the public at 8:00 p.m. EDT. The Police Week in-person public events, originally scheduled for May, have been rescheduled due to ongoing COVID-19 concerns to October 13-17, 2021. An in-person Candlelight Vigil event is scheduled for October 14, 2021.

Those who wish to view the Virtual Candlelight Vigil on May 13, 2021, can watch on the NLEOMF YouTube channel found at https://www.youtube.com/user/TheNLEOMF. The FOP’s Roll Call of Heroes can be viewed at www.fop.net. To view the schedule of virtual Police Week events in May, please view NLEOMF’s Police Week Flyer.   

To learn more about National Police Week in-person events scheduled for October, please visit www.policeweek.org.

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A member of the Aryan Circle (AC) pleaded guilty Thursday to his role in an October 2016 violent assault, as well as conspiring to sell firearms to a convicted felon. Another individual pleaded guilty on April 19, to conspiring with members of the AC to sell methamphetamine.

Rodney Shane Holt, aka “Turbo,” 48, of Tyler, Texas, pleaded guilty to assault resulting in serious bodily injury in aid of racketeering, as well as conspiracy to sell firearms to a convicted felon. Holt committed the assault as part of his membership in the AC, a gang that operates in Texas and other states throughout the country. According to court documents, Holt planned and participated in the events surrounding a violent beating of another AC member who wanted to switch his gang affiliation, or “patch over,” from the AC to a different gang. Holt and other AC members carried out the attack in order to “X,” or remove the AC member from the gang, because joining another organization violated the AC’s rules. Holt also sold high caliber firearms to convicted felons.

Eulalio Torres-Cadenas, aka “Yayo,” 43, of Houston, Texas, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance, namely 500 grams or more of a mixture or substance containing methamphetamine. According to court documents, Torres-Cadenas supplied an AC member with multiple kilograms of methamphetamine in 2016, in the area of Houston, Texas. The AC member then went on to distribute the methamphetamine to buyers in Louisiana, including other AC members. The drug conspiracy that Torres-Cadenas pleaded to was uncovered as part of Operation Noble Virtue, an investigation that has focused on the criminal conduct of the AC’s leadership.

The AC is a violent, white supremacist organization that originated in the Texas Department of Corrections and operates in federal prisons across the country, as well as outside prisons in states including Texas, Arkansas, Louisiana, and Missouri. The AC enforces its rules and promotes discipline among its members, prospects, and associates through murder, attempted murder, assault, and threats. Members, and oftentimes associates, are required to follow the orders of higher-ranking members without question.

Sentencing dates have not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Holt faces maximum sentences of 20 years in prison for the assault in aid of racketeering and five years in prison for the firearms conspiracy, while Torres-Cadenas faces a mandatory minimum sentence of 10 years in prison, and a maximum sentence of life in prison.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas made the announcement.

This case is being investigated by an Organized Crime Drug Enforcement Task Force (OCDETF) consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) District Attorney’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office.

Trial Attorneys Bethany Lipman, Rebecca Dunnan and Alexander Gottfried of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Christopher Rapp of the Eastern District of Texas are prosecuting the case.