Eastern District of Texas

TEXARKANA, Texas – A 43-year-old Little Rock, AR man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

            Antonio Otero pleaded guilty on Oct. 29, 2019 to charges of equity skimming and was sentenced to 46 months in federal prison today by U.S. District Judge Robert W. Schroeder III.  Otero was also ordered to pay restitution in the amount of $2 million to the U.S. Department of Housing and Urban Development.

            According to information presented in court, from before 2011 until October 2015, Otero was the administrator of the Magnolia Alzheimer’s Assisted Living facility in Texarkana, Texas, and was instrumental in the founding and operation of the facility. In order to secure millions of dollars in necessary funding, Otero obtained a loan that was insured by the U.S. Department of Housing and Urban Development (HUD.) The HUD insured loan provided a favorable interest rate and did not require the owners of the Magnolia to take personal responsibility for the loan in the event of a default. Instead, HUD would suffer the financial loss in the event that the Magnolia defaulted on the loan. As a condition of this federal benefit, Otero and the owners of the Magnolia agreed to be bound by a regulatory agreement with HUD that prohibited them from removing equity from the Magnolia unless the loan was being paid and the Magnolia had surplus cash.

            Instead of paying the HUD insured loan, Otero engaged in a scheme to skim equity from the Magnolia. For example, Otero took money from the Magnolia to pay for $3,952 of camera equipment, a $3,247 watch, $2,520 in landscaping for his personal residence, a $27,408 personal mortgage payment, a $12,750 down payment on a personal vehicle, and $1,540 tickets to a Dallas Cowboys football game. Additionally, he took money from the Magnolia and gave it to other individuals, including $13,000 for cosmetic surgery, $5,500 for a loan repayment, and $30,000 in equity distributions. In total, Otero took personal responsibility for causing a loss to the United States in the amount of $2 million.

            This case was investigated by the Fort Worth Office of the U.S. Department of Housing and Urban Development’s Office of Inspector General and prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

BEAUMONT, Texas –  Stephen J. Cox has taken the oath of office to become the United States Attorney for the Eastern District of Texas. Cox was appointed to the position by Attorney General William P. Barr pursuant to 28 U.S.C. § 546.  Cox took the oath of office today from U.S. District Judge Michael Truncale. 

“I am grateful to the Attorney General for appointing me to serve as the United States Attorney for the Eastern District,” said U.S. Attorney Cox.  “That I will be working alongside the talented and dedicated men and women of this office and our partners in law enforcement is a distinct privilege.  I look forward to leading the office during these challenging times, as we endeavor to protect the safety and security of our community while promoting and defending the rule of law.”

               Cox, 42, of Houston, is the chief federal law enforcement official in the Eastern District of Texas, which includes 43 counties stretching from the Oklahoma border to the Gulf of Mexico. The district includes six fully staffed offices in Beaumont, Plano, Tyler, Sherman, Texarkana, and Lufkin with 120 employees, including 55 prosecutors.  Cox is responsible for the prosecution of federal criminal offenses in the district, and will represent the United States in all civil litigation in the district.

Before being appointed as U.S. Attorney, Cox served as Deputy Associate Attorney General and Chief of Staff within the Department’s Office of the Associate Attorney General.  In this role, Cox spearheaded numerous policy reforms relating to corporate enforcement and regulatory reform, as well as overseeing several Department matters relating to financial fraud and healthcare fraud.  He also served as vice chair of the Deputy Attorney General’s working group on corporate enforcement and accountability, and as executive director of the Department’s regulatory reform task force.              

Previously, Cox served on the William H. Webster Commission on the FBI, Counterterrorism, Intelligence, and the Events of Fort Hood, and as a senior advisor to the Director of U.S. Immigration and Customs Enforcement.  Cox has also spent time in private practice, dealing with white collar investigations, ethics and compliance, and regulatory matters.

Cox has a B.S. degree from the Texas A&M University and J.D. degree from the University of Houston Law Center.  He is a member of the Texas and District of Columbia bars.  Cox and his family will make their home in Beaumont.

For more information about the U.S. Attorney’s Office for the Eastern District of Texas, please visit https://www.justice.gov/usao-edtx. 

WASHINGTON – Attorney General William P. Barr announced today the appointment of Stephen J. Cox as U.S. Attorney for the Eastern District of Texas, pursuant to 28 U.S.C. § 546, effective June 1, 2020.

As U.S. Attorney, Cox will serve as the chief federal law enforcement officer in the Eastern District of Texas.  He will be in charge of overseeing 55 Assistant U.S. Attorneys and 65 support staff, across six offices.  Cox will be responsible for the prosecution of federal criminal offenses in the district, and will represent the United States in all civil litigation in the district.

“I am pleased to appoint Stephen J. Cox as U.S. Attorney of the Eastern District of Texas.  Steve has been a consummate professional and dedicated leader throughout his time in the Office of the Associate Attorney General,” said Attorney General William P. Barr.  “Steve’s vast experience in areas ranging from regulatory reform to fraud to corporate compliance, and his reputation for fairness, sound judgment, and management, will serve him well in Eastern Texas.”

Before being appointed as U.S. Attorney, Cox served as Deputy Associate Attorney General and Chief of Staff within the Department’s Office of the Associate Attorney General.  In his role, Cox spearheaded numerous policy reforms relating to corporate enforcement and regulatory reform, as well as overseeing several Department matters relating to financial fraud and healthcare fraud.  He also served as vice chair of the Deputy Attorney General’s working group on corporate enforcement and accountability, and as executive director of the Department’s regulatory reform task force. 

Previously, Cox served on the William H. Webster Commission on the FBI, Counterterrorism, Intelligence, and the Events of Fort Hood, and as a senior advisor to the Director of U.S. Immigration and Customs Enforcement.  Cox has also spent time in private practice, dealing with white collar investigations, ethics and compliance, and regulatory matters.

Cox has a B.S. degree from the Texas A&M University and J.D. degree from the University of Houston Law Center.  He is a member of the Texas and District of Columbia bars.

For more information about the U.S. Attorney’s Office for the Eastern District of Texas, please visit https://www.justice.gov/usao-edtx. 

SHERMAN, TX - The United States Attorney’s Office for the Eastern District of Texas announced today the resignation of United States Attorney Joseph D. Brown, effective May 31, 2020.   

          “It has been the honor of a lifetime to serve as United States Attorney and to work with some of the finest prosecutors and support staff in the country.  I am very proud of our accomplishments,” said Brown.

          Under Brown’s leadership, the Eastern District played a major national role in carrying out President Trump’s “Initiative to Stop Opioid Abuse” by focusing prosecution resources on the illegal prescribing and dispensing drugs by doctors and pharmacies and cracking down on the international and domestic drug supply chains that have devastated communities, both urban and rural, throughout the United States.

          In 2018, the Eastern District of Texas led the nation in the extradition of defendants out of Colombia for drug related crimes.  “Our efforts to stop the deadly supply of drugs before they reached U.S. soil also extended into Mexico and other parts of South America,” said Brown.   In 2019, Brown’s office led the state of Texas and was fourth in the nation in the number of high-level, sophisticated organized crime cases indicted pursuant to the Justice Department’s Organized Crime Drug Enforcement Task Forces (OCDETF) program.  By 2020, the number of criminal defendants prosecuted in the Eastern District increased 24% from levels of just two years before, with a 40% increase in violent crime prosecutions and a 100% increase in the number of illegal immigration prosecutions.  

          Additional drug enforcement efforts included the prosecution of numerous “pill mill” physicians involved in the illegal distribution of opioid prescriptions.  Brown successfully prosecuted Dr. Howard Diamond of Sherman for illegally distributing opioids, securing a 20-year prison sentence in 2018.

          “We must win the fight against opioid abuse in order to save our country.  But in order to be effective, we must be willing to prosecute all facets of the expansive network that feeds these destructive drugs into our communities.  Players both big and small must meet equal justice under the law,” said Brown.

          Brown secured a Project Safe Neighborhood grant of $100,000 for the Paris Police Department, stood up Violent Crime Task Forces in the Sherman and Beaumont divisions of the District and created an Appellate Section within the United States Attorney’s Office.

          Brown’s tenure as United States Attorney also included increased disaster preparedness trainings for law enforcement, public corruption prosecutions, and strengthening relations between, local, state, and federal law enforcement through the Eastern District.

          Brown will be pursuing opportunities in the private and public sectors.  “I’m excited about the next chapter,” said Brown.  There are many exciting opportunities on the horizon and some of those will become apparent in the coming days.”

          Brown, 50, was appointed by President Trump to the position of United States Attorney in 2018.  He had previously served as Grayson County District Attorney. 

          “I want to thank President Trump for allowing me the honor of serving as United States Attorney,” said Brown. “The President has led important efforts to fight crime and keep us safe, and I fully support those pro-law enforcement measures.  I also want to express my deep gratitude to Senators John Cornyn and Ted Cruz for their support.”

          Brown currently resides in Grayson County with his wife Megan and their two daughters. 

BEAUMONT, Texas – A 46-year-old Port Arthur, Texas man has been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

               Santos Orellana-Hernandez was indicted by a federal grand jury on May 20, 2020 and charged with the use of interstate commerce facilities in the commission of murder-for-hire.

               According to the indictment, from January 17, 2020 until March 18, 2020, in the Eastern District of Texas and elsewhere, Orellana-Hernandez used a telephone to solicit the murder of two persons in violation of the laws of the United States. 

               If convicted, Orellana-Hernandez faces up to 10 years in federal prison.

               This case is being investigated by the Federal Bureau of Investigation and the Port Arthur Police Department and prosecuted by Assistant U.S. Attorney John B. Ross.

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

A Texas man has been charged in the Eastern District of Texas with allegedly filing bank loan applications fraudulently seeking more than $5 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

Samuel Yates, 32, of Maud, Texas, allegedly sought millions of dollars in forgivable loans guaranteed by the SBA from two different banks by claiming to have over 400 employees earning wages when, in fact, no employees worked for his purported business.

Yates is charged by way of a federal criminal complaint with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.

“This defendant allegedly sought to steal millions of dollars in loans intended to aid legitimate small businesses grappling with the economic effects of COVID-19,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The department and our law enforcement partners will use all the tools at our disposal to investigate and prosecute frauds against the Paycheck Protection Program.”

“Any time the government provides large amounts of money to the public there are people who will try to cheat the system,” said U.S. Attorney Joseph D. Brown of the Eastern District of Texas.  “We encourage lenders to be very careful, and to report suspicious applications.  It is a priority of the Department of Justice to deter and prosecute this type of fraud.”

“The Treasury Inspector General for Tax Administration will aggressively pursue those who try to use the Internal Revenue Service to facilitate their schemes to defraud coronavirus relief programs,” said Special Agent in Charge Dale Forrester of the Treasury Inspector General for Tax Administration’s Cybercrime Investigations Division.  “Our successes today would have not been possible without the joint efforts of the Small Business Administration Office of the Inspector General, the Department of Justice and other law enforcement partners.”

“Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office,” said Special Agent in Charge Donald Abram of SBA OIG’s Central Region.  “SBA OIG and its law enforcement partners are poised to root out wrongdoers in the Paycheck Protection Program and maintain its integrity.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

“Today’s arrest should serve as a strong deterrent to anyone considering exploiting the COVID-19 pandemic to enrich themselves through fraud. These individuals have no concern for legitimate businesses whose employees and their families are hurting financially during these unprecedented times,” said Special Agent in Charge Ryan L. Spradlin of U.S. Immigration and Custom’s Homeland Security Investigations (HSI) Dallas.  “HSI stands at the ready to utilize its ample investigative mandate to assist in rooting out such unscrupulous individuals, and hold them accountable for their crimes.”

According to court documents unsealed today in U.S. District Court in Texarkana, Yates allegedly made two fraudulent applications to two different lenders for loans guaranteed by the SBA for COVID-19 relief through the Paycheck Protection Program (PPP).  In the application submitted to the first lender, Yates allegedly sought $5 million in PPP loan proceeds by fraudulently claiming to have 400 employees with an average monthly payroll of $2 million.  In the second application, Yates claimed to employ over 100 individuals and was able to obtain a loan over $500,000. With each application, Yates submitted a list of purported employees that he obtained from a publicly available random name generator on the internet. He also submitted forged tax documents with each application.

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 percent.  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 eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll. 

A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

Trial Attorney Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Frank Coan for the Eastern District of Texas are prosecuting the case.

The Justice Department acknowledges and thanks the SBA Office of Inspector General, and U.S. Postal Inspection Service for their efforts investigating this matter.

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.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

Knoxville, Tenn. – U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee today announced that the City of Knoxville received $349,956 in Department of Justice grants to respond to the public safety challenges posed by the outbreak of COVID-19.
 

The grant is available under the Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump.  Other jurisdictions can determine if they are eligible for funds and may apply immediately by visiting this website.  The Justice Department is moving quickly, awarding grants on a rolling basis and aiming to have funds available for drawdown as soon as possible after receiving applications.

“As this country continues to fight COVID-19, our office remains committed to deterring, investigating, and prosecuting those who seek to take advantage of the COVID-19 pandemic.  This funding will help many of the communities struggling in these trying times and provide some much-needed relief to our district,” said U.S. Attorney Overbey.  

“The outbreak of COVID-19 and the public health emergency it created are sobering    reminders that even the most routine duties performed by our nation’s public safety officials carry potentially grave risks,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs.  “These funds will provide hard-hit communities with critical resources to help mitigate the impact of this crisis and give added protection to the brave professionals charged with keeping citizens safe.”

The law gives jurisdictions considerable latitude using these funds for dealing with COVID-19.  Potential uses include hiring personnel, paying overtime, purchasing protective equipment, distributing resources to hard-hit areas and addressing inmates’ medical needs.

Agencies eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for the emergency funding.  Local units of government and tribes will receive direct awards separately according to their jurisdictions’ allocations.

The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems.  More information about OJP and its components can be found at www.ojp.gov.

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An engineer has been charged in the Eastern District of Texas with allegedly filing bank loan applications fraudulently seeking more than $10 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

Shashank Rai, 30, of Beaumont, Texas, allegedly sought millions of dollars in forgivable loans guaranteed by the SBA from two different banks by claiming to have 250 employees earning wages when, in fact, no employees worked for his purported business.

Rai is charged by way of a federal criminal complaint with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.

“As alleged, Rai fraudulently pursued millions of dollars in loans intended for legitimate small businesses suffering the economic hardships of the COVID-19 pandemic,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The department and our law enforcement partners will remain vigilant in our efforts to protect critical CARES Act relief programs from fraud and abuse.”

“The behavior in this case was very brazen,” said U.S. Attorney Joseph D. Brown of the Eastern District of Texas.  “Those who submit these applications for loans or other assistance need to understand that there are people checking on the representations made, and those representations are made under oath and subject to the penalties of perjury. Federal agencies are watching for fraud, and people who lie and try to cheat the system are going to be caught and prosecuted.”

“To support small and community banks, the Federal Home Loan Banks can accept Paycheck Protection Program (PPP) loans as collateral when making loans to their members,” said Richard Parker, Acting Deputy Inspector General for Investigations for the Federal Housing Finance Agency, Office of Inspector General.  “The Office of Inspector General is proud to work with our partners in law enforcement to prevent, detect, and deter attempts to perpetrate fraud in the Federal Home Loan Bank System and steal the assistance intended for small business owners and employees under this important part of the CARES Act.”

“Today’s charges hold the defendant responsible for his actions to swindle money out of a federal program intended to help those in need during a pandemic crisis,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG).  “When an individual cheats the Paycheck Protection Program out of money, it deprives hard-working Americans and deserving small businesses.  The FDIC OIG is committed to working with our law enforcement partners to investigate financial crimes in order to preserve the integrity of the nation’s banking sector.”

“SBA OIG and its law enforcement partners will aggressively investigate fraud in the Paycheck Protection Program,” said SBA Inspector General Hannibal “Mike” Ware.  “The nation’s small businesses are counting on this program, and we will safeguard it to maintain the public trust.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

“While the government is trying to help out small businesses, scammers are out there trying to help themselves,” said Inspector in Charge Delany De Leon-Colon of the Criminal Investigations Group. “Postal Inspectors are proud to work alongside the Department of Justice and our other law enforcement partners to identify and investigate anyone who capitalizes on this pandemic to commit fraud. The U.S. Postal Inspection Service is committed to protecting small business owners, and the American public, from those who seek to do financial harm.”

According to court documents unsealed today in U.S. District Court in Beaumont, Rai allegedly made two fraudulent claims to two different lenders for seek loans guaranteed by the SBA for COVID-19 relief through the PPP.  In the application submitted to the first lender, Rai allegedly 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 allegedly 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.

According to court documents, the Texas Workforce Commission provided information to investigators of having no records of employee wages having been paid in 2020 by Rai or his purported business, Rai Family LLC. In addition, the Texas Comptroller’s Office of Public Accounts reported to investigators that Rai Family LLC reported no revenues for the fourth quarter of 2019 or the first quarter of 2020.

According to court documents, materials recovered from the trash outside of Rai’s residence included handwritten notes that appear to reflect an investment strategy for the $3 million, which is the amount of money that Rai allegedly sought from the second lender.

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 percent.  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 eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll. 

A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

Assistant Chief L. Rush Atkinson and Trial Attorney Lou Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Frank Coan for the Eastern District of Texas are prosecuting the case.

The Justice Department acknowledges and thanks the FHFA Office of Inspector General, FDIC Office of Inspector General, SBA Office of Inspector General, and U.S. Postal Inspection Service for their efforts investigating this matter.

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.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

SHERMAN, TX – The Internal Revenue Service will begin making COVID-19 economic impact payments in a matter of weeks. For most Americans, this will be a direct deposit into your bank account.  For the unbanked, elderly or other groups who have traditionally received tax refunds via paper check, they will receive their check in this same manner. 

     United States Attorney Joseph D. Brown and IRS-Criminal Investigation Special Agent in Charge Tamera Cantu want to warn local Texans that criminals are well-aware of these payments and will be actively attempting to steal these funds when they are most needed. Unsolicited phone calls, emails, text messages or other communications pretending to be from the IRS are likely a scam.  

     “We want the public to be very careful as these checks and payments go out,” said United States Attorney Joe Brown.  “We want these funds to be used for the right purposes.  People need to use healthy skepticism about any contact they receive that deals with the payments they will soon be receiving.”

      IRS-CI Special Agent in Charge Tamera Cantu of the Dallas Field Office offers the following information and tips to spot a scam and how citizens can report fraudulent activities:

• The IRS will NOT call and ask you to verify your payment details. Do NOT give your bank account, debit account, or PayPal account information to anyone - even if someone claims it's necessary to get your check. It's a scam.
• If you receive a call, do NOT engage with scammers, even if you want to tell them that you know it's a scam. Just hang up.
• If you receive texts or emails claiming that you can get your money faster by sending personal identifying information or clicking on links, delete these texts and emails. Do NOT click on any links in those texts or emails.
• If you receive a “check” for an odd amount (especially one with cents), or a check that requires you to verify the check online or by calling a number, it’s a scam.
• Remember, scammers change tactics.  Callers can be aggressive and threatening.  Do not be bullied into disclosing information or in making any payment.
• You can get the most up-to-date information directly from the IRS at irs.gov/coronavirus.
• Residents of Eastern Texas can contact the local IRS-CI field office with violations and suspected fraud at DallasFieldOffice@ci.irs.gov.

      Special Agent in Charge Cantu warns the public, “As the agency responsible for issuing economic impact payments, the IRS unfortunately expects some bad actors to execute fraud schemes in an attempt to take advantage of the situation.  IRS-CI will work diligently with the United States Attorney’s Office, Eastern District of Texas, and all of our law enforcement partners to disrupt and dismantle any fraud schemes related to the COVID-19 pandemic.  This is the time for every American to be vigilant in this fight against criminals and safeguard your personal and other privileged information.”

To report suspected fraud, please contact the National Center for Disaster Fraud by calling 866-720-5721 or sending an email to disaster@leo.gov.

SHERMAN, Texas - On March 13, 2020, President Donald J. Trump declared the outbreak of COVID-19 (the coronavirus) in the United States to be a national emergency. Unfortunately, criminals and scammers are trying to take advantage of the crisis for their own profit. The U.S. Attorney’s Office for the Eastern District of Texas through its United States Attorney, Joseph D. Brown, has made it a top priority to detect, investigate, and prosecute anyone who attempts to exploit the anxiety and uncertainty surrounding the COVID-19 outbreak to defraud other people.

          “The public needs to be careful during the coming weeks to not fall victim to criminals who will try to take advantage of this health crisis,” said United States Attorney Brown.  “The Justice Department has made it a priority to stop scams and frauds, and we will move aggressively against anyone who does that.  We encourage anyone who becomes aware of a potential fraud, to report it.”

          Scammers have already devised numerous methods for defrauding people in connection with COVID-19.  They are setting up websites, contacting people by phone and email, and posting disinformation on social media platforms.  To report fraud, please contact:

• National Center for Disaster Fraud (NCDF):
  Telephone hotline:1-866-720-5721 
  Email address:  disaster@leo.gov  

• Federal Bureau of Investigation (FBI): 
• Submit a complaint online at https://tips.fbi.gov/  
  For cyber or internet related scams, submit your complaint at https://www.ic3.gov/default.aspx  
  Telephone:  1-800-CALL-FBI (225-5324) 

• EDTX COVID-19 Fraud Coordinator, Assistant U.S. Attorney Frank Coan 
  Telephone:  903-590-1400

      Some examples of scams linked to COVID-19 include:  

• Treatment scams: Scammers are selling fake vaccines, medicines, tests, and cures for COVID-19. 
• Supply scams: Scammers are claiming they have in-demand products, like cleaning, household, health, and medical supplies.  When an order is placed, the scammer takes the money and never delivers the order. 
• Charity scams: Scammers are fraudulently soliciting donations for non-existent charities to help people affected by the COVID-19 crisis.  Scammers often use names that are similar to the names of real charities.
• Phishing scams: Scammers, posing as national and global health authorities such as the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC), are sending fake emails or texts to trick the recipient into sharing their personal information, including account numbers, Social Security numbers, or login IDs and passwords.  
• App scams: Scammers are creating mobile apps designed to track the spread of COVID-19 to insert malware that will compromise users’ devices and steal personal information.
• Provider scams: Scammers pretending to be doctors and hospitals that have treated a friend or relative for COVID-19 and demand payment for that treatment. 
• Investment scams: Scammers are promoting the stock of small companies, which have limited publicly-available information, using false or misleading claims that the companies’ stock will increase dramatically due to the COVID-19 outbreak, such as claims that a company can prevent, detect, or cure COVID-19.
• Price gouging: Individuals and businesses selling essential goods, like hand sanitizer, for significantly higher prices than in a non-emergency setting.

          The public can take the following steps to help protect against these scams:

• Independently verify the identity of any company, charity, or individual that contacts you regarding COVID-19.
• Check the websites and email addresses offering information, products, or services related to COVID-19.  Be aware that scammers often employ addresses that differ only slightly from those belonging to the entities they are impersonating. For example, they might use “cdc.com” or “cdc.org” instead of “cdc.gov.” 
• Be wary of unsolicited emails offering information, supplies, or treatment for COVID-19 or requesting your personal information for medical purposes.  Legitimate health authorities will not contact the general public this way.
• Do not click on links or open email attachments from unknown or unverified sources.  Doing so could download a virus onto your computer or device. 
• Make sure that the anti-malware and anti-virus software on your computer is operating and up to date.
• Ignore social media and email offers for a COVID-19 vaccine, cure, or treatment. Remember, if there is a medical breakthrough, you will not hear about it for the first time through an email, online ad, or unsolicited sales pitch.
• Check online reviews of any company offering COVID-19 products or supplies.  Avoid companies whose customers have complained about not receiving items.
• Research any charities or crowdfunding sites soliciting donations in connection with COVID-19 before giving. Remember, an organization may not be legitimate even if it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials. For online resources on donating wisely, visit the Federal Trade Commission (FTC) website (https://www.consumer.ftc.gov/features/how-donate-wisely-and-avoid-charity-scams).
• Be wary of any business, charity, or individual requesting payments or donations in cash, by wire transfer, gift card, or through the mail.  Do not send money through any of these channels.
• Be cautious of “investment opportunities” tied to COVID-19, especially those based on claims that a small company’s products or services can help stop the virus.  If you decide to invest, carefully research the investment beforehand.  For information on how to avoid investment fraud, visit the U.S. Securities and Exchange Commission (SEC) website (https://www.investor.gov/protect-your-investments/fraud/how-avoid-fraud/what-you-can-do-avoid-investment-fraud).

          The United States Attorney’s Office also cautions against individuals or businesses that may have accumulated medical supplies or devices beyond what they reasonably need on a daily basis for the purpose of selling them in excess of prevailing market prices.  It is illegal to acquire medical supplies and devices designated by the Secretary of Health and Human Services as scarce in order to hoard them or sell them for excessive prices.  Although no items have yet been so designated, the process for such designation is underway, and it is anticipated that certain supplies will be designated in the near future.

          This does not mean that the Justice Department will pursue regular Americans who are stocking up on the necessities of daily life or businesses acquiring materials reasonably needed for their own use.  Similarly, no action will be taken against manufacturers or suppliers who are working with the government and health care providers to combat this crisis.   However, bad actors who amass critical supplies either far beyond what they could use or for the purpose of profiteering will be aggressively pursued.  Scarce medical supplies need to be going to hospitals for immediate use in care, not to warehouses for later overcharging.

          For the most up to date information on the COVID-19 outbreak and the federal response, check https://www.cdc.gov/coronavirus/2019-ncov/index.html

               TEXARKANA, Texas –A 45-year-old Mexia, Texas man has been indicted for possession of cocaine with intent to distribute in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

               Cedric Ellis was named in an indictment returned by a federal grand jury on March 18, 2020. Ellis appeared in federal court today in Texarkana and will be held in custody until the resolution of this case.

               According to the indictment and other court documents, on Feb.21, 2020, Ellis was driving east on Interstate 30 through Titus County when a Trooper with the Texas Department of Public Safety, Highway Patrol Division stopped him for following too closely. After the trooper’s interactions with Ellis and his passengers—an adult female and a minor—raised his suspicion, the trooper deployed his canine partner, who alerted to the presence of a controlled substance. Inside the vehicle, the trooper found 14 kilogram-sized bundles of cocaine.  Ellis took responsibility for the cocaine and was arrested.

               If convicted, Springer faces a minimum of ten years and up to life in federal prison, a fine of up to $10 million, and forfeiture of $420,000.00 in U.S. currency.

               This case is being investigated by the Tyler Resident Office of the Dallas Division of the Drug Enforcement Administration with assistance from the Texas Department of Public Safety, Highway Patrol and Criminal Investigation Divisions in Mt. Pleasant. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

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

TEXARKANA, Texas –A 60-year-old Bowie County man has been indicted for possessing child pornography in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

               William Johnson Springer was named in an indictment returned by a federal grand jury on March 18, 2020. Springer appeared in federal court today in Texarkana and will be held in custody until the resolution of this case.

               According to the indictment, on Sep. 18, 2019, Springer possessed child pornography on a cell phone. Included among the images of child pornography were videos that depict the rape of a prepubescent minor, an infant, and a child in bondage.

               Springer was previously convicted of possession of child pornography in the U.S. District Court for the Northern District of Oklahoma. On Feb. 9, 2009, he was sentenced to 67 months in federal prison and five years of supervised release as a result of that conviction. Springer also has pending charges for failure to comply with registration requirements in the 202nd District Court in Bowie County.

               If convicted, Springer faces not less than ten and not more than 20 years in federal prison.

               This case is being investigated by the Texarkana Resident Agency of the Dallas Field Office of the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

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

TYLER, Texas – A 56-year-old Grand Saline, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.                

          Andrew Mark Harris pleaded guilty on Aug. 26, 2019, to conspiracy to distribute and possess with intent to distribute methamphetamine and was sentenced to 71 months in federal prison by U.S. District Judge Jeremy D. Kernodle on March 17, 2020.  Judge Kernodle also ordered  forfeiture of $1500, representing proceeds received by the defendant because of his drug distribution. 

          According to information presented in court, on July 14, 2018, Harris was stopped in Van Zandt County, Texas, for a traffic violation. At the time of the stop, he possessed approximately 1.4 grams of a mixture or substance containing methamphetamine, which he possessed with intentions to distribute to others. 

          Harris admitted to being involved in a conspiracy with others to obtain and distribute methamphetamine from July 2018 through at least May 2019.  As part of that conspiracy, he obtained methamphetamine for resale and sold methamphetamine to others.  He admitted that he was responsible, directly, for the possession with intent to distribute of at least 50 grams of a mixture or substance containing methamphetamine, and that the value of that methamphetamine was at least $1,500. 

          This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Van Zandt County Sheriff’s Office and the Texas Department of Public Safety and prosecuted by Assistant U.S. Attorney Alan Jackson.

MARSHALL, Texas - U.S. Attorney Joseph D. Brown announced today that three individuals have been arrested pursuant to a federal indictment charging them with drug and firearms violations in the Eastern District of Texas.

               A federal grand jury returned the 15-count indictment on Feb. 19, 2020, charging Danny Brian Hernandez, 27; Ronald Charles Parker, 31; and Armando Ivan De La Torre, 24, all of Marshall, with being involved in a conspiracy to traffic methamphetamine in the area.

               According to court documents, the defendants have been charged with one count of conspiracy to distribute methamphetamine, 13 counts of possession with intent to distribute methamphetamine, and one count of carrying a firearm during a drug offense.  Hernandez, Parker, and De La Torre were arrested today in Marshall.  If convicted, the defendants face up to life in federal prison.

               This case is the result of a joint investigation by the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas Department of Public Safety; Marshall Police Department, and Harrison County Sheriff's Office.  The case is being prosecuted by Assistant U.S. Attorney Lucas Machicek.

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

TYLER, Texas – A 27-year-old Tyler, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.             

          Dakota Allen pleaded guilty on Sep. 12, 2019, to possession with intent to distribute methamphetamine and was sentenced to 235 months in federal prison by U.S. District Judge Jeremy D. Kernodle on March 17, 2020.  Judge Kernodle also ordered forfeiture of $5,000 seized from the defendant. 

          According to information presented in court, on March 7, 2019, Allen and co-defendant, Haleigh Morris, were stopped in Smith County, Texas, for a traffic violation. At the time of the stop, they were in possession of approximately one kilogram of methamphetamine located in a camo zipper bag, along with $6,250 in cash, ziplock bags, a digital scale, and drug paraphernalia.  Another $956 cash was in the center console.  During the traffic stop, Allen attempted to drive off and evade arrest.  During this time, the defendants threw the camo zipper bag out the window before Allen wrecked the vehicle.  They were both indicted on April 17, 2019. 

          This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Allen Hurst.

PLANO, Texas – A 23-year-old Richardson, Texas man has been sentenced to prison for federal violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown and FBI Special Agent in Charge Matthew J. DeSarno.                

        Rahul Ramesh Joshi pleaded guilty on Oct. 3, 2019 to sending threatening communications to injure another, in interstate commerce, and was sentenced to 48 months in federal prison by U.S. District Judge Amos Mazzant on March 6, 2020.

        According to information presented in court, in December 2018, a federal law enforcement agent began investigating a complaint from a female Snapchat user.  She allegedly received threatening messages on different messaging apps from several different users that all seemed to be connected.  Further investigation revealed at least four confirmed victims in different states all receiving similar threatening messages.  Joshi had lived in Michigan before attending the University of Texas and eventually moving to Richardson, Texas. 

        This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office, University of Pittsburgh Police Department, University of Texas Police Department, and Wellesley Police Department in Massachusetts.

TYLER, Texas – A 54-year-old Houston Registered Nurse has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

         Beryl-Anne Tufon Lobe pleaded guilty to conspiracy to pay for patient referrals in violation of the Anti-Kickback Statute today before U.S. Magistrate Judge John D. Love.

         According to information presented in court, Lobe, a registered nurse, was the sole owner of Axion Healthcare Services, LLC.  Based in Missouri City, Texas, Axion provided home health services to Medicare beneficiaries in the Eastern District of Texas and elsewhere.  From approximately May-August 2015, Lobe engaged in a conspiracy to pay for patient referrals, in violation of the Anti-Kickback Statute.  To find eligible Medicare beneficiaries, Lobe made illegal kickback payments to community liaisons – also known as “recruiters” or “marketers” – who recruited and referred Medicare beneficiaries to Axion.  Kickbacks were also paid to Medicare beneficiaries for the purpose of arranging for home health services.  Axion then billed Medicare more than $225,000 for home health services purportedly provided to those beneficiaries who had been obtained through these kickback arrangements.  

         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, TRICARE, and Medicaid.  The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

         Under federal statutes, Lobe faces up to 5 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

         This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the State of Texas Medicaid Fraud Control Unit.  This case is being prosecuted by Assistant U.S. Attorney L. Frank Coan, Jr.

TYLER, Texas – A 29-year-old Tyler, Texas, man has pleaded guilty to federal drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

            Victor Hernandez, Jr., pleaded guilty to possession with intent to distribute methamphetamine before U.S. Magistrate Judge K. Nicole Mitchell on March 5, 2020.           

            According to information presented in court, on July 26, 2019, Hernandez distributed approximately 25 grams of methamphetamine to another person for $400 in an undercover transaction.  During a later search of his residence, officers discovered ammunition.  Hernandez admitted to being responsible for the distribution of between 20 and 35 grams of methamphetamine. 

            Under federal statutes, Hernandez faces up to 40 years in federal prison at sentencing.  The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

            This case was investigated by the Federal Bureau of Investigation, the Smith County Sheriff’s Office, and the Tyler Police Department and prosecuted by Assistant U.S. Attorney Alan Jackson.

BEAUMONT, Texas – A 38-year-old Katy, Texas man has been indicted for federal drug trafficking and firearms violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

                Paul Andrew Cabiro was indicted by a federal grand jury on March 4, 2020 and charged with possession with intent to distribute LSD, methamphetamine, cocaine, heroin, and fentanyl and possession of a firearm in furtherance of a drug trafficking offense.

                According to the indictment, Feb. 21, 2020, Cabiro was stopped for a traffic violation on Interstate-10in Beaumont.  During the stop, a narcotics canine alerted on the vehicle.  Inside the vehicle, officers discovered 480 dosage units of LSD, approximately 48.2 grams of methamphetamine., approximately 48 grams of cocaine, approximately 53.2 grams of “China White” heroin, and approximately 68.4 grams of “tar” heroin, two firearms and over $10,000 cash.

                If convicted, Cabiro faces up to life in federal prison.

                This case is being investigated by the U.S. Drug Enforcement Administration and the Jefferson County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Christopher T. Rapp.

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

BEAUMONT, Texas – Two Beaumont men have been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

                Thaddiaus Joseph Thomas, 34, and Tremaurice Arthur Randall, 24, were indicted by a federal grand jury on March 4, 2020 and charged with conspiracy to commit carjacking, carjacking, possession of a firearm during a crime of violence, and possession of a firearm by a prohibited person.

                According to the indictment, on Dec. 21, 2019, Thomas and Randall traveled to the Excellent Carwash located at 5010 Haden Road in Beaumont, Texas, wearing masks, where they approached a man who was sitting in the driver’s seat of his 2003 Dodge Ram pickup truck. Thomas pointed a pistol at the man and Randall ordered him to “give it up” before Randall and Thomas then pulled the man out of his truck and threw him on the ground. Thomas then hit the man's head with the pistol and fired one shot toward his feet.  Randall and Thomas then entered the pickup truck and drove away.

                If convicted, Thomas and Randall each face up to 20 years in federal prison.

                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 John B. Ross.

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

         BEAUMONT, Texas –A 36-year-old Houston man has been sentenced to prison for federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

         Carlos Garcia pleaded guilty on July 11, 2019, to conspiracy to commit access device (credit card) fraud and was sentenced to 18 months in federal prison by U.S. District Judge Thad Heartfield on March 5, 2020. 

         According to information presented in court, on Nov. 10, 2017, law enforcement officers responded to a suspicious activity call at the Gator’s convenience store located at 2890 Dowlen Road in Beaumont, Texas.  Upon arrival, the officers located Garcia and Alfredo Angel Almaguer-Almira, along with a red Dodge truck next to a gas pump at the store.  The door of the truck was open revealing a credit card skimming device consisting of a computer chip and two connector wires.  There was wet caulk around the door frame and on the floorboard of the truck was a caulk gun and a screwdriver.  A search of Garcia revealed he had a set of universal gas pump keys in his pocket.  Forensic analysis of the skimming device found 258 credit card account numbers had been recorded without authorization, many of the numbers identified as belonging to Beaumont residents and businesses who frequently used the gasoline pumps.  Bank records showed that the available credit on the 258 accounts totaled approximately $1.2 million. 

         Garcia and Almaguer-Almira were indicted by a federal grand jury on Oct. 3, 2019.  Almaguer-Almira pleaded guilty and was sentenced to 10 months in federal prison on Jan. 9, 2020.

         This case was investigated by the U.S. Secret Service and the Beaumont Police Department and prosecuted by the Assistant U.S. Attorney Robert L. Rawls. 

TEXARKANA, Texas – A 28-year-old Dallas, Texas, man has been convicted of federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

          Collin Garrett Hayden was found guilty by a jury of obstruction of justice on March 6, 2020 following a five-day trial before U.S. District Judge Robert W. Schroeder, III.  Hayden pleaded guilty to possessing a weapon in jail before the trial began.

          According to information presented in court, in 2016, law enforcement began working a drug trafficking investigation into methamphetamine trafficking from Dallas into East Texas.  During the investigation, Hayden and his roommate were heard on an undercover recording offering to sell drugs to another individual. Further investigation revealed Hayden had been personally selling cocaine in the Dallas strip clubs in which he performed and had been supplying methamphetamine to a Shreveport, Louisiana, buyer who was traveling through East Texas to purchase from Hayden.  When Hayden became aware of his pending federal charges, he turned on his roommate and threatened to use his association with a white supremacist group to have the roommate killed.  While in custody at the Titus County jail, Hayden obtained a shank-type weapon and threatened to kill any guards who entered his cell in retaliation for a guard reporting Hayden had attempted to obtain a cell phone by bribe.  Hayden was indicted by a federal grand jury on April 19, 2017, and charged with federal violations.

          Under federal statutes, Hayden 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

          The case was investigated by the Mount Pleasant office of the Texas Department of Public Safety, Criminal Investigation Division and prosecuted by Assistant U.S. Attorneys Jonathan R. Hornok and Donald Carter.

BEAUMONT, Texas – A 32-year-old Beaumont, Texas, man has been convicted of federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.                                                                                                                               

                Larry Young, Jr., was found guilty of being a felon in possession of a firearm following a two-day trial before U.S. District Judge Marcia A. Crone.  The jury returned their verdict in the afternoon on Tuesday, March 3, 2020.

                According to information presented in court, on Jan. 17, 2019, law enforcement officers executed a search warrant at a home where Young was residing.  Inside the residence, officers discovered several firearms, including one which had been reported as stolen, a ballistic vest, and numerous rounds of ammunition.  Further investigation revealed Young had been convicted of multiple felonies and as a convicted felon, prohibited from owning or possessing firearms or ammunition.  Young was indicted by a federal grand jury on June 5, 2019, and charged with firearms violations.

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

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

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

PLANO, Texas – A 38-year-old Gainesville, Texas, man has been convicted of federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.                                                                                               

            William Randall Brannan was found guilty of being a felon in possession of a firearm and two counts of possession of a firearm in furtherance of a drug trafficking crime today  following a week-long trial before U.S. District Judge Sean D. Jordan.

            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.

            “Brannan has a long criminal history, and continues to mix drugs, guns, and violence,” said U.S. Attorney Joseph D. Brown.  “This conviction should keep him off the streets for a long time.”

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

            This case was investigated by the 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.

TYLER, Texas – A 46-year-old Dallas man has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

          Steven Ray Breckenridge pleaded guilty on Oct. 7, 2019, to being a felon in possession of a firearm and was sentenced to 51 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.           

          According to information presented in court, on June 19, 2019, Breckenridge was stopped in Canton, Texas by law enforcement.  A search of the vehicle was conducted as Breckenridge had an active warrant.  During the search, officers located a pistol.  Further investigation revealed Breckenridge was a convicted felon, having been previously convicted of eight felonies.    It is a violation of federal law for a convicted felon to own or possess a firearm or ammunition.  Breckenridge was indicted by a federal grand jury on Aug. 21, 2019, and charged with federal firearms violations.

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

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Van Zandt County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Frank Coan.

BEAUMONT, Texas – Two Texas men have been sentenced to federal prison for drug and gun violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.                 

         Tommy Joe Tomlin, 48, of Lubbock, pleaded guilty on Aug. 15, 2019, to possession with intent to distribute methamphetamine and possession of a firearm during a drug trafficking crime and was sentenced to 120 months in federal prison for the drug trafficking violation and 60 months for the firearms violation.  Tomlin was sentenced today by U.S. District Judge Marcia A. Crone.  Judge Crone ordered the sentences to run consecutively for a total of 180 months in federal prison. 

         Patrick Ray Glenn, 35, of San Antonio, pleaded guilty on July 31, 2019, to being a felon in possession of a firearm and was sentenced to 110 months in federal prison today by U.S. District Judge Marcia A. Crone. 

         According to information presented in court, in February 2019, Tomlin and Glenn, both convicted felons and members of the Aryan Brotherhood of Texas, were arrested in Cleveland, Texas following a drug transaction at an area hotel. 

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

BEAUMONT, Texas – A 27-year-old Beaumont, Texas man has been sentenced to federal prison for firearms violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.                 

        Bernard James Bell pleaded guilty on July 23, 2019, to being a felon in possession of a firearm and was sentenced to 71 months in federal prison today by U.S. District Judge Marcia A. Crone. 

        According to information presented in court, on Apr. 11, 2019, law enforcement officers began investigating a homicide that occurred in Beaumont’s west end.  On Apr. 14, 2019, investigators learned that Bell was provided a firearm that was used in connection with that homicide so that he could dispose of it or hide it.  After speaking with Bell, investigators recovered the firearm and determined that Bell had possessed it.  Further investigation revealed Bell is a convicted felon having several convictions in Jefferson County, Texas in 2011 and 2012.  As a convicted felon, Bell is prohibited from owning or possessing firearms or ammunition.  Bell was indicted on those charges by a federal grand jury on May 1, 2019.

        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 Russell James.

BEAUMONT, Texas – A federal inmate has been sentenced for escaping from a Bureau of Prisons facility in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today. 

            Victor Luis Pescador, 57, of Laredo, pleaded guilty on Nov. 21, 2019, to escape and was sentenced to 24 months in federal prison today by U.S. District Judge Marcia Crone.  This sentence will be added to the remainder of the federal sentence Pescador was serving as a result of his 2007 conviction on federal drug trafficking charges at the time of his escape from federal custody earlier this year. 

            According to information presented in court, on July 12, 2019, Pescador and another inmate were discovered missing from the Bureau of Prison Camp Facility in west Jefferson County.  Pescador was subsequently arrested near Roma, Texas on Aug. 29, 2019.

           “This is one of several inmates who have walked away in recent months from the prison camp, which is a minimum security facility for low risk inmates, usually serving the final portion of their sentences,” said United States Attorney Joseph D. Brown.  “Regardless of the circumstances, they escaped from a prison facility and anyone who does so will be prosecuted, along with anyone on the outside who helps the escape.”

            Pescador was sentenced to 20 years in federal prison in 2007 for possession with intent to distribute over 1000 pounds of marijuana in the Southern District of Texas.

            This case was investigated by the Federal Bureau of Prisons and the United States Marshals Service and prosecuted by Assistant U.S. Attorney Joe Batte.

PLANO, Texas – Attorney General Maria Consuelo Porras Argueta, of the Republic of Guatemala, joined United States Attorney Joseph D. Brown, Adam Cohen, Director of the Department of Justice’s Organized Crime Drug Enforcement Task Forces (OCDETF), and  Drug Enforcement Administration Assistant Special Agent in Charge of the Dallas Field Division Guy Baker in the Eastern District of Texas today to discuss investigations and advancements in joint efforts to curtail transnational criminal organizations operating between  the United States and Guatemala.

               During the meeting, officials discussed the surrender and extradition of Erik Salvador Suniga Rodriguez, also known as “El Pocho.”  Suniga Rodriguez was indicted by a federal grand jury on June 13, 2018 in the Eastern District of Texas and charged with drug and money laundering violations.  The mayor of Ayutla, a town on the border with Mexico, Suniga Rodriguez surrendered to U.S. Drug Enforcement agents in Guatemala on Dec. 19, 2019 and was extradited to McKinney, Texas.  His trial is scheduled to begin in the federal courthouse in Plano.

               Suniga Rodriguez has been identified by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) as a significant foreign narcotics trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act).  As a result, all assets in which Suniga Rodriguez has an interest in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.

               “We are very appreciative of the cooperation of the government of Guatemala as we jointly fight narco-trafficking,” said United States Attorney Joseph D. Brown.  “Attorney General Porras visit shows her country’s commitment to standing up against the drug cartels and her recognition that both of our countries benefit when we move aggressively against these criminal organizations.  We have excellent juries and judges in East Texas that do not tolerate crime and these kinds of international prosecutions are one of our priorities.”

               “This case highlights the importance of law enforcement coordination and information sharing,” said OCDETF Director Adam Cohen.  “By coordinating effort and leveraging resources, we are able to disrupt and dismantle the operations of criminal networks that pose the greatest threat to our communities and to the Nation.”

               “Criminals who attempt to stay above the law through positions of public trust 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. Chavez. “We applaud the bravery and resolve of our Guatemalan 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.”

               This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Forces (OCDETF).  OCDETF agents and prosecutors handle complex investigations and prosecutions of the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States.

               The Department of Justice’s Office of International Affairs provided significant assistance in securing the defendant’s return from Guatemala.  This case is being investigated by the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Colleen Bloss.

BEAUMONT, Texas – A 30-year-old Vidor, Texas man has pleaded guilty to federal violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown.             

            Taylor Graham Cozart pleaded guilty to being a felon in possession of a firearm today before U.S. Magistrate Judge Keith F. Giblin.

            According to information presented in court, on July 30, 2019, law enforcement officers responded to a motorcycle accident on Interstate Highway 10 in Orange County, Texas.  The defendant was the driver of the motorcycle, which was later determined to be stolen.  Cozart was transported to a nearby hospital and the accident scene was cleared, during which time officers located a backpack affixed to the motorcycle.  The backpack contained a pistol, ammunition, $3,000 cash, methamphetamine, Xanax and Hydrocodone pills.  Further investigation revealed Cozart was a convicted felon having three prior felony drug convictions.  As a convicted felon, Cozart is prohibited from owning or possessing firearms or ammunition.

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

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

            This case was investigated by the Texas Department of Public Safety and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Michelle S. Englade.

BEAUMONT, Texas – A 44-year-old Houston man has pleaded guilty to federal violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.             

        Curtric DeMaine White pleaded guilty to interstate transportation of stolen property today before U.S. Magistrate Judge Keith F. Giblin.

        According to information presented in court, during the early morning hours of July 31, 2019, White and others burglarized Best Buy in Mobile, Alabama and D’Iberville, Mississippi.  Later in the evening of that same day, law enforcement officers conducted a traffic stop on Interstate 10 West in Vidor, Texas on a vehicle having a fictitious license plate.  White was identified as one of the two occupants of the vehicle.  While questioning the occupants, the officer noticed a steel security cage in the vehicle.  After getting consent to search, the cage was found to have the Best Buy “Geek Squad” insignia on it and contained approximately 20 new Apple iPhones, all of which were determined to belong to Best Buy.  In total, the two Best Buy stores suffered a combined loss of $117,363.97 in stolen items and damage to their property.

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

        This case was investigated by the Federal Bureau of Investigation and the Vidor Police Department and prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.

BEAUMONT, Texas – A 35-year-old St. Petersburg, Florida woman has pleaded guilty to federal drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

               Erica Ann Lang pleaded guilty to conspiracy to distribute and possess methamphetamine today before U.S. Magistrate Judge Keith F. Giblin.  Ryan Andrew Davis, 35, of Clearwater, Florida pleaded guilty to the same charge on Jan. 16, 2020.              

               According to information presented in court, on Oct. 24, 2019, Davis and Lang were stopped for a traffic violation on Interstate Highway 10 East in Beaumont, Texas.  A certified narcotics detection dog alerted on the car and a search was performed revealing approximately one kilogram of methamphetamine hidden in the trunk of the vehicle.

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

               This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney John B. Ross.

               TYLER, Texas –A 53-year-old Tyler, Texas woman has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown and FBI Special Agent in Charge Matthew J. DeSarno today.

               Virginia Colis Rodriguez pleaded guilty on Sep. 30, 2019 to conspiracy to produce and transfer false identification documents and was sentenced to 20 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.  The court also ordered forfeiture of  firearms and ammunition; a computer and three printers; $30,961.09 in currency and bank accounts; and two pieces of real property in Flint, Texas. 

               According to information presented in court, beginning in April 2009, Rodriguez conspired with others, including her husband, Jose Luis Marquez Rodriguez, to produce and sell fictitious U.S. identification documents to others.  The false documents included U.S. Social Security cards and Permanent Residence cards. Rodriguez admitted to being personally responsible for the transfer of over 25 false identification documents as part of this conspiracy. Marquez Rodriguez will be sentenced later this month.  The defendants were indicted by a federal grand jury on April 23, 2019.

               This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office – Tyler Resident Agency, Smith County Sheriff’s Office, U.S. Drug Enforcement Administration, U.S. Immigration and Customs Enforcement, and Texas Department of Public Safety.  This case was prosecuted by Assistant U.S. Attorney Alan R. Jackson.

SHERMAN, Texas – A 41-year-old Allen, Texas man has been sentenced for child pornography violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown and FBI Special Agent in Charge Matthew J. DeSarno today.

            Richard Denver Belden pleaded guilty on June 20, 2019 to receipt and possession of child pornography and was sentenced to 420 months in federal prison by U.S. District Judge Amos Mazzant on Feb. 6, 2020.

            According to information presented in court, in May 2018, a detective with the Plano Police Department was conducting an undercover investigation into Internet programs know for trading child pornography and located a user, later identified as Belden, who was making a large quantity of child pornography available for download.  Over the course of two days, the detective downloaded over 4,000 images and videos of child pornography from Belden. 

            Members of the Collin County Sheriff's Office obtained a search warrant for Belden's apartment, in Allen, Texas and on May 15, 2018, the Sheriff's Office and Plano Police Department executed the search warrant.  Upon entering the residence, they discovered Belden actively downloading and distributing child pornography on a laptop computer.  In addition to the laptop, Belden owned a tower containing 15 hard drives, totaling 57 TB of storage.  The Plano Police Department and FBI child exploitation task force spent months forensically analyzing Belden's digital media.  Officers located thousands of images and videos of child pornography, including depictions of children as young as toddlers and depictions of sadistic or masochistic abuse.  Belden was indicted by a federal grand jury in June 2018.

            During the sentencing hearing, a Plano Police Department Detective testified about the undercover investigation, the forensic review of Belden's devices, and the content of those devices.  Belden's sentencing guidelines included a term of imprisonment of 210 to 262 months.  The government requested that the Judge vary upward and impose a sentence of 420 months.  Based on Belden's history and characteristics and the nature and circumstances of his offense, Judge Mazzant granted the government's motion and sentenced Belden to a total term of 420 months (35 years) imprisonment, to be followed by 20 years of supervised release.

            “These type of cases show the real depravity of parts of our society,” said U.S. Attorney Joseph D. Brown.  “We are fortunate that law enforcement is out there looking for these people.”

            “Today’s result is the product of the outstanding collaboration between the FBI and its local partners,” said FBI Special Agent in Charge Matthew J. DeSarno.  “The FBI, through the North Texas Child Exploitation and Human Trafficking Task Force, will continue to work tirelessly to keep our kids safe.  This lengthy sentence will hopefully serve as a warning for all those who would seek to prey on the most vulnerable among us.”

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

            This case was investigated by the North Texas Child Exploitation and Human Trafficking Task Force, which is made up of FBI agents and officers from the Dallas, Plano and Grand Prairie Police Departments and Collin County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Marisa Miller.

          BEAUMONT, Texas –A Beaumont, Texas business owner and his wife have been convicted of federal tax violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

          Dick Brocato, Jr., 68, and his wife, Judith L. Brocato, 65, both of Beaumont, Texas, were convicted on Feb. 5, 2020 by a jury following a three-day trial before U.S. District Judge Marcia A. Crone.  The Brocatos were found guilty of conspiracy to defraud the United States for purposes of impeding the government functions of the Internal Revenue Service (IRS) in the collection of income tax and six counts of making and submitting false tax returns on both their personal and business for 2012-2014.

          According to information presented in court, the Brocatos owned a lawn service company, Superior Lawn Service, which was operated for tax purposes as an S corporation.  The Brocatos were the sole shareholders of the company with Judith Brocato as corporate president, maintaining the books and records of the corporation, and signing the corporate tax returns in that capacity.  The Brocatos conspired to defraud the United States for the purpose of impeding, impairing, and obstructing, the lawful government functions of the Internal Revenue Service (IRS) in the ascertainment, computation, assessment, and collection of federal income and other taxes for years 2012, 2013, and 2014. As part of that conspiracy, they filed false corporate and personal income tax returns for years 2012, 2013, and 2014.  To facilitate the scheme, the Brocatos underreported income received by checks from numerous customers of the company after having the checks cashed rather than depositing the checks into the company accounts. They then purposefully failed to report the cash income amount on the various tax returns. According to the indictment, the underreported income amounted to $503,281 in 2012, $687,534 in 2013, and $513,498 in 2014. A federal grand jury returned an indictment on Sep. 4, 2019 charging Dick and Judith Brocato with tax violations.

          “The obligation of all of us to pay our taxes is important, and no one should forget that there are criminal penalties for failing to pay your taxes as required,” said United States Attorney Joseph D. Brown.  “And it is again tax season, so this verdict is a timely reminder.”

          Under federal statutes, the Brocatos each face up to 5 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.     

          This case was investigated by the Internal Revenue Service Criminal Investigation Division and prosecuted by Assistant U.S. Attorneys Robert L. Rawls and John B. Ross

MARSHALL, Texas – A 41-year-old Hughes Springs, Texas man has pleaded guilty to federal drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

                Oscar Dean Davis pleaded guilty to conspiracy to distribute and distribution of methamphetamine today before U.S. Magistrate Judge Roy S. Payne.               

                According to information presented in court, Davis was the leader of an illegal drug distribution network responsible for obtaining multiple-kilogram quantities of methamphetamine from a Mexican-based supplier and selling them throughout East Texas.  Davis admitted to acquiring large numbers of firearms, including pistols, rifles, and high-caliber weapons, and transporting them to the U.S.-Mexico border as a medium of exchange for methamphetamine.  Finally, Davis admitted to directing others to use money services businesses to wire transfer proceeds from methamphetamine sales to his supplier in Mexico.

                Fourteen other individuals have previously entered pleas of guilty for their involvement in the drug and firearms trafficking organization. Stephanie Bennett Mata, 35, of Daingerfield; Gary O'Neal Gibson, 62, of Henderson; Felix Antonio Jaime, 37, of Mt. Pleasant; Charlie Jake Porter, 34, of Marietta; Tony King, 41, of Daingerfield; and Gerald Wayne Furlow, 55, of Hughes Springs; each pleaded guilty to possessing or conspiring to possess with the intent to distribute methamphetamine.  Raymond Danny Moore, 43, of Avinger; Jennifer Michelle Kirkham, 39, of Jena, Louisiana; Donna Gail Sertuche, 53, of Hughes Springs; Jamie Nicole Browning, 40, of Gilmer; Joshua Nickie Soto, 35, of Leesville, Louisiana; and James Drakeford Scholl, 41, of Naples; pleaded guilty to either unlawfully obtaining firearms from licensed dealers or transporting firearms to the U.S.-Mexico border in furtherance of the drug trafficking conspiracy.  Christina Felipe, 37, of Hughes Springs, and Angelica Arreola, 28, of El Paso, have pleaded guilty to conduct including transferring or transporting money from the U.S. to Mexico.

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

                This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF).  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.  Davis was indicted by a federal grand jury on Oct. 10, 2018 and charged with drug trafficking violations.   

                This case was investigated by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Lucas Machicek.

            SHERMAN, Texas –Two Texas men have been sentenced to federal prison for an investment fraud scheme in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown and FBI Special Agent in Charge Matthew J. DeSarno today.

Thurman Bryant, III, 46, of Frisco, Texas and Arthur Franz Wammel, 46, of Houston, were convicted by a jury on Apr. 3, 2019, of conspiracy to commit wire fraud and were sentenced to federal prison on Jan. 29, 2020 by U.S. District Judge Amos Mazzant.  Bryant was sentenced to 240 months in federal prison and ordered to pay restitution in the amount of $9,103,088.12.  Wammel was sentenced to 136 months in federal prison and was also ordered to pay restitution in the amount of $9,103,088.12. 

According to information presented in court, the defendants devised and executed an investment fraud scheme that claimed to earn investors a guaranteed minimum 30% annual return on investment.  In addition, Bryant promised an investment that would be placed in a secure escrow account, when in fact the money was funneled to Wammel for  securities trading and other purposes. Evidence at trial showed that the defendants separately spent money on personal expenses such as home leases, home improvements, car leases, expensive jewelry, and private school tuition, and that defendant Wammel spent a large amount of money on expenses related to a Rolls-Royce, a Ferrari and a Range Rover.  Additional evidence showed that the investors contributed over $22 million to the scheme. 

Bryant and Wammel were indicted by a federal grand jury on Dec. 13, 2017.

“The defendants’ Ponzi scheme hurt people badly,” said U.S. Attorney Joseph D. Brown.  “Many of the victims were friends and family of these men, and the amount of loss was just tremendous.  The length of their sentences reflect that.”

"Today’s sentencing sends a strong message to all white collar criminals. The FBI will thoroughly investigate and expose your fraud,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Victims can rest assured that these individuals will be held accountable for their actions.”

This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office – Frisco Resident Agency and prosecuted by the United States Attorney’s Office for the Eastern District of Texas. 

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BEAUMONT, Texas – A 41-year-old Ft. Lauderdale, Florida woman has pleaded guilty to federal drug trafficking charges in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.                 

                Shenita Denise Peterson pleaded guilty to possession with intent to distribute cocaine  before U.S. District Judge Michael Truncale on Jan. 28, 2020.

                According to information provided in court, on Aug. 23, 2019, Peterson was stopped by Beaumont Police for a traffic violation on Interstate Highway 10 in Beaumont, Texas.  A search of the vehicle revealed approximately 45 individual kilograms of cocaine, which were concealed in the door panels of the vehicle.  Peterson was indicted by a federal grand jury on Sep. 4, 2019 and charged with drug trafficking violations.

                Under federal statutes, Peterson faces up to life in federal prison at sentencing.  The maximum penalty 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 Beaumont Police Department and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Robert L. Rawls. 

TEXARKANA, Texas – A 42-year-old Texarkana, Texas woman has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

            Nikki Diane May pleaded guilty on Sep. 12, 2019 to wire fraud and was sentenced to 23 months in federal prison today by U.S. District Judge Robert W. Schroeder III. 

            According to information presented in court, during 2017 and 2018, May served as the treasurer of the Pleasant Grove High School Showstoppers Booster Club, in Texarkana, Texas. The club exists primarily to support the educational enrichment of the Showstoppers dance team by raising funds that allow them to participate in events across Texas and the United States.  To further that goal, the club solicits the public for charitable donations and participation for the benefit of the students involved.  As treasurer of the organization, May was entrusted with all funds received by the club and was responsible for depositing cash and checks received through various fundraising sources.  May was also responsible for maintaining appropriate records of the funds received and expenditures made on behalf of the club.  As treasurer, May was also entrusted with a debit card attached to the club’s bank account to be used for club business.  However, from June 2017 to around November 2018, May defrauded the club by stealing cash that had been received as donations to the club and using the debit card to withdraw funds from the club’s bank account all for her own personal use.  May prepared treasurer reports that falsely stated the club’s bank balances in order to hide her scheme from club officers and members.  May’s fraudulent scheme resulted in the theft of more than $60,000 from the booster club.

            This case was investigated by the Federal Bureau of Investigation’s Texarkana Resident Agency of the Dallas Field Office and prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

TYLER, Texas - U.S. Attorney Joseph D. Brown announced today that nine individuals have been arrested pursuant to a federal indictment charging them with drug and firearms violations in the Eastern District of Texas.

                A federal grand jury returned the 42-count indictment on Jan. 15, 2020, charging the following individuals with being involved in a conspiracy to traffic methamphetamine in Smith, Cherokee, and Rusk counties:

                Alexa Leigh Brown, 50, of Tyler;

                Stanley Wayne Hunter, 43, of Troup, Texas;

                David Raymond Lusk, 41, of Jacksonville, Texas;

                Johnathan Rudy Duke, 30, of Recklaw, Texas;

                Anthony Russell Hamilton, 42, of Tyler;

                Donald Ray Carr, 55, of Tyler;

                Justin Ray Carr, 32, of Tyler;

                Joseph Paul Melancon, 46, of Henderson, Texas; and

                Tonya Hudson Hammonds, 46, of Troup.

                The indictment alleges that the arrested individuals conspired with others to distribute large quantities of methamphetamine in the Eastern District of Texas, and that several of the defendants possessed firearms while being convicted felons and in furtherance of their drug trafficking activities.  The defendants appeared before U.S. Magistrate Judge K. Nicole Mitchell on Jan. 22 and 24, 2020, to be arraigned on charges of conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine, felon in possession of a firearm, and use, carrying, or possession of a firearm during and in furtherance of a drug trafficking crime.  Many of the charged offenses carry a statutory penalty range that includes life in prison.

                This case is the result of a nearly two-year joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Texas Department of Public Safety; Smith County Sheriff's Office, Tyler Police Department, Troup Police Department, Cherokee County Sheriff's Office, Jacksonville Police Department, Rusk County Sheriff's Office, Henderson Police Department, and the U.S. Marshals Service.  The case is being prosecuted by Assistant U.S. Attorney Lucas Machicek.

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

SHERMAN, Texas – A 57-year-old Collinsville, Texas woman has been sentenced to prison for federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.             

        Rosemary Wolf pleaded guilty on June 12, 2019, to conspiracy to commit wire fraud and was sentenced to 51 months in federal prison by U.S. District Judge Amos L. Mazzant on Jan. 2, 2020.

        According to information presented in court, Wolf conspired with James Michael Murray to defraud Brakebush Brothers, Inc., a food services company formerly known as Trinity Valley Foods, Inc., out of $1,207,163.32 from March of 2014 through November 2015.  Wolf, in her role as Executive Assistant, conspired with Murray to set up fake business entities with similar names of legitimate Brakebush customers in order to divert company funds to bank accounts held by Wolf and Murray.   Wolf caused checks to be issued by Brakebush to the fraudulent businesses and provided the checks to Murray.  Murray deposited the checks in accounts he controlled and shared the ill-gotten funds with Wolf.  Murray and Wolf used the funds to pay for lifestyle expenses including gambling at Oklahoma-based casinos and costs associated with owning horses. 

        “Businesses are vulnerable to insider thefts like this because we all want to trust our employees, especially in smaller companies,” said U.S. Attorney Joseph D. Brown.  “While companies have to rely on their employees, cases like this confirm that they should follow the old saying of ‘Trust, but verify’ as much as possible.”

        On  Aug. 13, 2019, Murray was sentenced to 36 months in federal prison for his role in the scheme.  Both Wolf and Murray were ordered to pay full restitution to Brakebush of $1,207,163.32. 

        Anyone with information on other participants in this scheme are asked to contact law enforcement. 

        This case was investigated by the Internal Revenue Service – Criminal Investigation and prosecuted by Assistant U.S. Attorney Lesley Davis Brooks.

TYLER, Texas – A 46-year-old Whitehouse, Texas business owner has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

Miles Brosang pleaded guilty to one criminal count of willful failure to collect or pay over tax before U.S. Magistrate Judge K. Nicole Mitchell on Jan. 22, 2020.

According to information presented in court, Brosang was the only director, sole shareholder, and general manager of Brosang’s Landscaping, Inc.  As such, he exercised control over every aspect of the business affairs of Brosang’s Landscaping, Inc., including approving all payments by the company and controlling all of the bank accounts of Brosang’s Landscaping, Inc.

During the third quarter of 2015, between approximately July 1, 2015, and September 30, 2015, Brosang’s Landscaping, Inc. withheld payroll taxes from its employees’ paychecks, including federal income taxes, and Medicare and social security taxes (often referred to as Federal Insurance Contribution Act or “FICA” taxes.)   Brosang knew that Brosang’s Landscaping, Inc. was required to make deposits of the payroll taxes to the Internal Revenue Service on a periodic basis.

In his capacity with Brosang’s Landscaping, Inc., Brosang was a “responsible person,” that is, he had the corporate responsibility to collect, truthfully account for, and pay over the payroll taxes for Brosang’s Landscaping, Inc.  During the third quarter of 2015, Brosang’s Landscaping, Inc. failed to make required payments to the Internal Revenue Service.  As a responsible person, Brosang knew that Brosang’s Landscaping, Inc. had a duty to pay, and the ability to make, the required payments, and he intentionally and willfully failed to make and pay over, or have Brosang’s Landscaping, Inc. make and pay over, the payments.  The amount of taxes that should have been, and was not, paid over for the third quarter of 2015 is $49,704.47.  The total of payroll taxes that should have been, and was not, paid over is $229,552. 

“Business owners need to understand the importance of their obligations in the withholding of payroll taxes,” said United States Attorney Joseph D. Brown.  “They hold those taxes in trust for the employee and the government and there are criminal penalties for those who divert those funds for other uses.”

            Under federal statutes, Brosang faces up to five years in federal prison at sentencing.  The maximum penalty 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 IRS – Criminal Investigation and prosecuted by Assistant U.S. Attorney Alan R. Jackson.

BEAUMONT, Texas – A 41-year-old Newton, Texas, man has been convicted of federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.                 

Desmond Deray Gatson was found guilty on Jan. 22, 2020, of being a felon in possession of a firearm following a two-day jury trial before U.S. District Judge Marcia A. Crone.

According to information presented in court, on Feb. 8, 2019, Gatson was stopped by Beaumont police on Lucas Road in Beaumont for having an obstructed license plate.  During the traffic stop, officers could smell marijuana and Gatson indicated that he had just finished smoking marijuana.  Gatson also admitted to having served prison time for a drug conviction.  A search of the vehicle revealed a handgun under the seat and marijuana in the center console.  As a convicted felon, Gatson is prohibited from owning or possessing firearms or ammunition.  Gatson was indicted on Aug. 7, 2019 and charged with federal firearms violations.

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

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

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

MARSHALL, Texas – A 31-year-old Hallsville, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.                 

         Mark McLean Farmer pleaded guilty on Aug. 16, 2019, to conspiracy to possess with intent to distribute and distribution of anabolic steroids and possession of a firearm in furtherance of a drug trafficking crime and was sentenced to 72 months in federal prison by U.S. District Judge Rodney Gilstrap on Jan. 16, 2020.

         According to information presented in court, beginning in August 2018, Farmer began conspiring with others to distribute at least 2,500 units of anabolic steroids.  Farmer served as a distributor of the steroids, receiving the drugs from foreign suppliers and then selling them to other dealers and users by way of the internet and through the United States mail.  Additionally, Farmer was found to be in possession of a pistol while he was in the process of delivering steroids.

         This case was investigated by the DEA Dallas Field Division, Tyler Resident Office and the U.S. Postal Inspection Service, Fort Worth Division.  This case was prosecuted by Assistant U.S. Attorneys Colleen Bloss and Jim Noble.

TYLER, Texas – A 38-year-old Carthage, Texas, man has been convicted of federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.             

Timothy Earl Brown was found guilty today of being a felon in possession of a firearm  and ammunition  following a two-day jury trial before U.S. District Judge Jeremy D. Kernodle.

According to information presented in court, on Oct. 14, 2016, law enforcement officers were dispatched to a rural residence in Panola County for a prowler.  Brown was spotted by law enforcement carrying a rifle in a wooded area near the home.  Brown fled but was apprehended and also found in possession of a revolver.  Further investigation revealed Brown is a convicted felon and prohibited by federal law from owning or possessing firearms or ammunition.  Brown was convicted in Panola County in 2000 for theft, in 2000 for escape and in 2011 for sexual assault.  He also has a prior conviction in the Eastern District of Texas for being a felon in possession of a firearm in 2004.   Brown was indicted for this incident on June 21, 2018 and charged with federal firearms violations.

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

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

This case was investigated by the Panola County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorneys Jim Noble and Alan Jackson.

TYLER, Texas – A 57-year-old Longview, Texas man has been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

               Joseph Valdie Kimble pleaded guilty on Sep. 11, 2019, to health care fraud and was sentenced to 30 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.  Kimble was also ordered to pay restitution in the amount of $751,986.30 to Medicare and Medicaid and was ordered not to seek or retain employment in the health care fraud industry while serving three years of supervised release.

               According to information presented in court, Kimble operated Tiger EMS, a business providing non-emergency ambulance transport, mostly between skilled nursing centers and hospitals and dialysis centers.  Ambulance providers may bill for ambulance services only if there is a demonstrated medical need, which requires that either a beneficiary be bed-confined and it is documented that other methods of transportation are contraindicated; or the beneficiary's medical condition is such that transportation by ambulance is medically required.  Kimble disregarded medical necessity requirements and billed Medicare and Medicaid for ambulance services provided to patients for whom ambulance transport was not medically necessary. 

               This case was investigated by U.S. Health and Human Services – Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit and prosecuted by Assistant U.S. Attorneys Alan R. Jackson and Frank Coan.

TYLER, Texas – A 31-year-old Houston woman has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.             

         Angelica Iczayana Jaimes-Loredo pleaded guilty on July 25, 2019 to conspiracy to possess with intent to distribute and distribution of 50 grams or more of methamphetamine and was sentenced to 92 months in federal prison by U.S. District Judge Robert W. Schroeder III.

         According to information presented in court, between January 2018 and August 2018, Jaimes-Loredo and others were involved in a conspiracy to distribute methamphetamine in the Smith County, Texas area.  On Nov.14, 2018, Jaimes-Loredo; Suri Surai Rivera-Zuniga, 25, of Houston; Kevin Russ Ivy, 58, of Whitehouse, Texas; and Stephen Paul Barton, 55, of Tyler; were charged in a six-count indictment with conspiracy to possess with intent to distribute and distribution of 50 grams or more of methamphetamine.  Jaimes-Loredo and Rivera-Zuniga admitted to distributing approximately three kilograms of methamphetamine on Aug. 18, 2018 in Whitehouse, Texas.  Ivy admitted to possessing with intent to distribute 88 grams of methamphetamine on Aug. 16, 2018 in Whitehouse, Texas.  Barton admitted to distributing 48.7 grams of methamphetamine on Aug. 16, 2018 and 35.7 grams of methamphetamine on July 20, 2018 in Whitehouse, Texas. 

         Rivera-Zuniga pleaded guilty on April 2, 2019 to conspiracy to possess with intent to distribute and distribution of 50 grams or more of methamphetamine and was sentenced to 63 months in federal prison on Sep. 26, 2019.  Ivy pleaded guilty on May 13, 2019 to conspiracy to possess with intent to distribute and distribution of 50 grams or more of methamphetamine and was sentenced to 49 months in federal prison on Sep. 19, 2019.  Barton pleaded guilty on July 25, 2019 to possession with intent to distribute 5 grams or more of methamphetamine and was sentenced to 87 months in federal prison on Jan. 13, 2020.   

         This case was investigated by the Smith County Sheriff’s Office Narcotics Unit, the Texas Department of Public Safety Criminal Investigation Division and Highway Patrol, and the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Allen Hurst.

TYLER, Texas – A 24-year-old Jacksonville, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.                 

                David Anthony Ebanez pleaded guilty on Sep. 4, 2019, to possession with intent to distribute methamphetamine and was sentenced to 84 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.    

                According to information presented in court, on April 10, 2019, Ebanez was found in possession of over 50 grams of a substance containing methamphetamine at the Cherokee County Courthouse in Rusk, Texas.  Ebanez was indicted by a federal grand jury on May 15, 2019, and charged with federal drug trafficking violations.

                This case was investigated by the DEA Dallas Field Division, Tyler Resident Office; the Cherokee County Sheriff’s Office, Jacksonville Police Department, and the Smith County Sheriff’s Office.  This case was prosecuted by Assistant U.S. Attorneys Mary Ann Cozby and Colleen Bloss.

BEAUMONT, Texas – Four Houston men have been arrested on federal violations in the Eastern District of Texas announced. U.S. Attorney Joseph D. Brown

            David Nathan Taylor, 28; Prentis Leewood Delaney, 29; Coray Quan Brown, 32; and Jamarius Early Jones, 21; appeared in federal court in Beaumont today for initial appearances.  A criminal complaint charging the individuals with conspiracy to commit Hobbs Act robbery was signed by U.S. Magistrate Judge Zack Hawthorn on Jan. 14, 2020.  The Hobbs Act prohibits actual or attempted robbery that has an effect on interstate commerce by reason of their repetition and aggregate effect on the economy.  Investigators believe the crew is responsible for the October 2019 murder of an armored car guard in northwest Houston.

            According to the criminal complaint filed in the Eastern, District of Texas, the Federal Bureau of Investigation was investigating a series of armored car robberies, including the fatal robbery of a Loomis armored car courier that occurred on Oct. 24, 2019, in Houston.  During that robbery, three individuals brandished firearms and demanded money from the courier.  The courier was shot and killed.  A subsequent investigation led officers to these four subjects.  On Jan. 13, 2020, these individuals were observed together in Houston prior to traveling to Lake Charles in two separate vehicles.  Upon arriving in Lake Charles the subjects were observed by law enforcement following an armored vehicle that then traveled to Beaumont.  After arriving in Beaumont they were encountered by law enforcement and subsequently arrested.  Inside one of the vehicles officers discovered two AR-15 style rifles, a pistol, three masks, three sets of gloves, five cell phones, and two open bottles of rubbing alcohol.

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

            This case is being investigated by the Federal Bureau of Investigation, the Beaumont Police Department, the Texas Department of Public Safety, the Lake Charles Police Department and the Houston Police Department.  This case is being prosecuted by Assistant U.S. Attorney Russell E. James.

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

TEXARKANA, Texas –  Twelve individuals from three states have been charged in a federal indictment returned in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

            Nicolas Arroyo, 38, of Newport Coast, CA, pleaded guilty to conspiracy to defraud the United States on Jan. 14, 2020 before U.S. Magistrate Judge Caroline Craven.

            According to information presented in court, Arroyo was the CEO of a clinical laboratory when he conspired with others to pay and receive kickbacks in exchange for the referral of and arranging for health care business, specifically pharmacogenetic (PGx) tests.  Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variations that effect how an individual patient metabolizes certain drugs. The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California, Irvine, California, and San Diego, California.  More than $28 million in illegal kickback payments were exchanged by the defendants and others during the conspiracy.  On Dec. 11, 2019, a federal grand jury returned an indictment in which Philip Lamb, 44, of Scottsdale, Arizona; Nicolas Arroyo, 38, of Newport Coast, California; Vincent Marchetti, Jr., 55, of Coronado, California; William Flowers, 55, of Houston, Texas; Steven Donofrio, 45, of Temecula, California; James J. Walker, Jr. a/k/a Jimmy Walker, 46, of Frisco, Texas; Timothy Armstrong, 62, of Frisco, Texas; Virginia Blake Herrin, 54, of Frisco, Texas; Patrick Ridgeway, 50, of Jackson, Mississippi; Chismere Mallard, 39, of McAllen, Texas; Ray W. Ng, 61, of Dallas, Texas; and Ashley Kretzschmar, 34, of Aledo, Texas; were indicted for conspiracy to commit illegal remunerations in violation of the Anti-Kickback Statute.  The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for items or services payable under federal health care programs.

            “We continue to see individuals in the healthcare industry creating illegal kickback arrangements, trying to cheat the system and turn healthcare decisions into financial decisions instead of what is best for the patient,” said United States Attorney Joseph D. Brown.  “This must stop, and doctors should be aware of the emphasis that is being put on stopping these practices.”

            Under federal statutes, Arroyo faces up to 5 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

            This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the FBI Dallas – Frisco Resident Agency, and the U.S. Department of Homeland Security, Homeland Security Investigations.  It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and L. Frank Coan, Jr.