Northern District of Texas

A DFW nightclub magnate was sentenced to 16 years in federal prison for operating an empire of clubs in which drugs were sold openly, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.

In November 2021, a federal jury found OK Corral/ Far West owner Alfredo Hinojosa, general manager Miguel Casas, and noted promoter Martin Salvador Rodriguez guilty of managing drug premises, conspiracy to manage drug premises, and conspiracy to possess with intent to distribute cocaine. Mr. Hinojosa was sentenced on Friday by U.S. District Judge Sam A. Lindsay, who imposed a $120,000 fine in addition to the prison time.

The overall case included more than 30 defendants, all of whom have been convicted, including former Dallas Police Officers Eddie Villarreal and Craig Woods. At sentencing, Judge Lindsay called Mr. Hinojosa the “top dog” in the scheme, and noted that the “buck stopped” with him.

According to evidence presented at trial, Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez ran a conglomeration of businesses that brought in revenue of more than $107 million over a four-year period. 

The defendants allowed cocaine to be sold in the bathrooms of their nightclubs on a daily basis, because such drug sales attracted customers and provided them with a competitive edge over rival clubs.  These drugs sales increased revenue at the clubs between $9 million and $12 million.

“These defendants made millions by explicitly allowing cocaine trafficking in nightclubs across DFW. They assumed that permitting bathroom drug deals would be their ‘competitive edge.’ Instead, it was their downfall,” Acting U.S. Attorney Chad Meacham said following the conviction. “The United States Attorney’s Office and the FBI will not permit nightclub owners – or anyone else – to willfully turn a blind eye to drug trafficking happening on their premises.”

“This conspiracy was designed to elevate the status of the defendants at a very high cost to our society,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Their extensive plans to conceal nightly high-volume drug sales included the recruitment of law enforcement officers as employees. We will continue to work with our local, state, and federal partners to protect the integrity of the profession, uphold the public’s trust, and prevent access to illicit drugs in our greater Dallas-Fort Worth communities.”

At trial, prosecutors presented evidence of 17 controlled drug buys that occurred at the OK Corral Dallas, OK Corral Fort Worth, and Far West nightclubs between 2013 and 2016. Half a dozen informants, all under the supervision of FBI agents, bought bag after bag of cocaine from traffickers operating out of club bathrooms.

Multiple security guards who worked inside the clubs testified at trial that Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez knew the drug trafficking was occurring and openly ordered security personnel to allow it.  Drug traffickers, previously charged and convicted in the case, also testified that they were allowed to operate freely.

At trial, FBI agents explained that in 2015, they installed court-ordered microphones and a camera in Mr. Hinojosa’s office, unbeknownst to the defendants.  Agent also sought and obtained more a dozen wiretaps in the case.  During these recorded calls and intercepted communications, Mr. Hinojosa could be heard saying, “we can’t really clean it because then we lose business,” and “we need cocaine, man.”

Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez eventually confessed to knowing that the drug sales were ongoing and allowed.  Prosecutors played Mr. Hinojosa’s 45-minute recorded interview for the jury.  Other agents recounted statements made by Mr. Casas and Mr. Rodriguez.

According to one agent’s notes, Mr. Casas told a task force officer that when club management realized the business was “tanking,” they told bouncers to allow the drug sales to resume and leave drug dealers alone as long as they were “discreet.”

The Federal Bureau of Investigation’s Dallas Field Office and the Dallas Police Department conducted the investigation, which was dubbed “Operation Closing Time.” The Texas Alcoholic Beverage Commission's Enforcement Division, IRS – Criminal Investigations, and the Texas Attorney General’s Office provided valuable assistance. Assistant U.S. Attorneys P.J. Meitl, Nicole Dana, and Melanie Smith prosecuted the case.

 

A former police officer who sexually assaulted at least two teenage boys was sentenced this week to 20 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Delia Ruiz, an 31-year-old former officer with the Friona Police Department, pleaded guilty to enticement of a minor in January. She was sentenced on Wednesday by U.S. District Judge Matthew J. Kacsmaryk.

In plea papers, Ms. Ruiz admitted that began having sexual intercourse with her 16-year-old victim, identified in court documents as John Doe 2, in fall 2020, and continued the relationship through spring 2021, when the boy turned 17.

She further admitted that she began having sexual intercourse with her 15-year-old victim, John Doe 1, in spring of 2021 after meeting him at John Doe 2’s home.

She sent the child flirtatious messages and arranged to meet him in a church parking lot for sex in her car on at least three occasions. She sent him sexually explicit photos and videos of herself and warned him not to tell anyone about what they did because she could get into “big trouble.”

She was arrested in October 2021 and later fired from the Fiona Police Department.

The Texas Rangers, Federal Bureau of Investigation’s Dallas Field Office – Lubbock Resident Agency, and the Amarillo Police Department conducted the investigation with the complete cooperation of the Fiona Police Department. Assistant U.S. Attorney Callie Woolam prosecuted the case with the help of Assistant U.S. Attorney Meredith Pinkham.

A California man who ran a $1.4 million Ponzi scheme from behind bars while serving time on another fraud conviction was sentenced Tuesday to eight additional years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Michael David Carroll, 46, of Long Beach CA, pleaded guilty in November 2021 to wire fraud. He was sentenced yesterday by U.S. District Judge David C. Godbey, who also ordered him to pay $1,346,499.90 in restitution to his victims.

“This defendant had the audacity to mount a million dollar Ponzi scheme while serving time for a prior fraud. But for a second time, his avarice caught up with him: A federal judge more than doubled his sentence,” said U.S. Attorney Chad Meacham. “The U.S. Attorney’s Office and the FBI are determined to hold accountable those who defraud honest investors.”

“The defendant deceived dozens of investors to preserve his complex financial scheme and fund a lavish lifestyle. Many Ponzi scheme victims do not recover their investment and are often left financially devastated,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The FBI will continue working with our partners to hold individuals accountable for defrauding investors and robbing them of their livelihood. We encourage the public to thoroughly research investment opportunities and to report any potential fraud to the FBI’s Internet Crime Complaint Center at ic3.gov.”

According to court documents, in September 2017, Mr. Carroll – already 36 months into a 70-month sentence for a prior fraud conviction – lied to investors about his intention to secure funding for their ventures and invest their funds into legitimate investment ventures.

He admitted that he pitched investors on bridge loans, short term loans used to buy assets or cover obligations until longer-term financing is found, promising 40 to 50 percent rates of return in just one to three months.  He claimed that each bridge loan was backed by a bank and therefore guaranteed.

He concealed the fact that he was a convicted felon, and if asked about it, claimed he had been falsely accused and had the charges dismissed.

Instead of actually investing the money, however, he set up a Ponzi scheme, secretly using new investor funds to make payments to older investors. This gave them the false impression that their “investments” were yielding profits, thereby lulling them into a false sense of security and encouraging them to make more fraudulent investments.  

He used excess money from his scheme to fund his lavish lifestyle, which included for a private jet service, luxury vehicles, high-end dining, and suites at NFL games.

He preyed on more than two dozen victims and fraudulently obtained at least $1.4 million, inducing multiple fraudulent transfers from investor accounts into accounts associated with his businesses, MCC Holdings, SLJ Holdings, and STR America Holdings.

Mr. Carroll is currently incarcerated at the federal correctional institution in Seagoville, TX.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorney Dimitri Rocha prosecuted the case with the help of auditor Sheila Powell.

A Euless woman pleaded guilty on Friday to embezzling more than $2.6 million from her former employer, an international global logistics and freight forwarding company, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Vika Latai Moa, 36, was charged via felony information on March 17 and pleaded guilty to wire fraud before U.S. Magistrate Judge Irma Ramirez on March 27.

In court documents, Ms. Moa admitted that between June 2016 and October 2019, she was employed as an operations manager at Savino Del Bene USA, Inc. (Savino USA) in the Dallas area.

Savino USA, headquartered in New Jersey, is the American subsidiary of Savino Del Bene S.p.A., a global logistics and freight forwarding company based in Florence, Italy. Among other things, Savino USA provides transportation services to its customers in the United States by subcontracting local deliveries to third-party trucking companies.

In her role at Savino USA, Ms. Moa was responsible for selecting and paying these local subcontractors.

Between June 2016, and October 2019, Ms. Moa falsely represented to Savino USA employees that invoices for trucking services were owed, which caused Savino USA to pay more than $2.6 million to a bank account to which she had access.

For instance, as part of her scheme to misappropriate funds from Savino USA, Ms. Moa misrepresented to Savino USA employees that a fictitious business was an actual transportation company. She created fraudulent invoices for trucking services that the fictitious business purportedly provided to Savino USA.

Ms. Moa then directed Savino USA to pay the fictitious business based on these false invoices, knowing full well that the company did not perform any services for Savino USA, as it was not a real business and did not have any operations

Ms. Moa faces up to 20 years in federal prison. As part of the plea agreement, she also agreed to pay restitution in the amount of $2,623,888.44.  Her sentencing is scheduled for September 22 before U.S. District Court Judge Karen Gren Scholer.

The Federal Bureau of Investigation’s Dallas Field office conducted the investigation. Assistant U.S. Attorney Fabio Leonardi is prosecuting the case.

Two men who allegedly trafficked teenage girls have been federally charged, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

LaDarius Alton Smith, 33, and Ulises Rene Garcia, 22, were indicted on Tuesday on two counts of sex trafficking a child. Both have been ordered detained pending trial.

According to court documents, the case began when the Texas Department of Family and Protective Services contacted the North Texas Trafficking Task Force to report that a 16-year-old runaway, identified in court documents as JD 1, had been spotted on megapersonals.eu, a known commercial sex database.

An undercover agent initiated conversation with the individual who posted the ad and arranged for a commercial-sex date at a hotel in Dallas on April 12.

Once there, the agent encountered a 17-year-old girl, identified as JD 2, who said she had locked herself out of the room. Mr. Garcia gave JD 2 a key to that room, and then she began conversing with the agent. Another individual, later determined to be Mr. Smith, spoke with the agent on the telephone and promised to bring JD 1 to the hotel soon.

A surveillance team then observed a dark blue BMW enter the hotel parking lot. Mr. Smith got out and escorted JD 1 and another 17-year-old, JD 3, to the hotel room.

Agents recovered the girls and transported them to the Dallas Children’s Advocacy Center for comprehensive care.

Meanwhile, law enforcement conducted a search of the hotel room, where they found a backpack containing JD1’s high school schedule.

An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Garcia and Mr. Smith are presumed innocent until proven guilty.

If convicted, they each face up to life in federal prison.

Homeland Security Investigation’s Dallas Field Division conducted the investigation. Assistant U.S. Attorney Joe Magliolo is prosecuting the case.

If you believe you or someone you know is a victim of human trafficking, call local law enforcement or the confidential National Human Trafficking Hotline, staffed 24/7, at 1-888-373-7888.

 

A federally licensed firearms dealer was sentenced today to four years in federal prison for selling guns to unlicensed dealers for resale, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Jonathan Ludlow, 48, pleaded guilty in January to conspiracy to deal in firearms without a license and make false statements on ATF forms as well as possession of an unregistered silencer. He was sentenced Friday by U.S. District Judge Reed C. O’Connor in Fort Worth.

“Federal firearm laws are designed to keep guns out the wrong hands. Responsible licensed gun dealers are often the first line of defense in this endeavor. Licensed dealers who know their buyers intend to immediately resell their guns – quite possibly to individuals who cannot pass a background check – must not complete that sale. Doing so could have deadly serious consequences,” said U.S. Attorney Chad Meacham. “ATF and the U.S. Attorney’s Office will not allow people like Mr. Ludlow to flout laws that save lives.”

 “Today is a good day for ATF and all of its partners with this sentencing. Mr. Ludlow, a federal firearms licensee, knew the laws and intentionally skirted them. By doing so, he has put hundreds of guns on the streets of the DFW metroplex and beyond. Because of his recklessness, we will continue to relive his crimes for years as more of his crime guns are recovered,” said ATF Dallas Special Agent in Charge Jeffrey C. Boshek II. “ATF remains staunch in its tireless pursuit of licensed firearms dealers that commit criminal acts.”

In plea papers, Mr. Ludlow, a federally licensed firearms dealer (FFL), admitted he regularly sold large quantities of identical firearms – including numerous AR-15 style pistols – to unlicensed associates, knowing full well that they intended to immediately engage in the business of reselling the guns for profit. The transactions were conducted out of Mr. Ludlow’s vehicle in various locations across the DFW Metroplex, and were typically completed in cash.

Two such associates, Romello Harris and Christopher Meza, pleaded guilty to conspiring with Mr. Ludlow to deal firearms without licenses. (Mr. Harris was sentenced earlier this month to 37 months in federal prison; Mr. Meza is awaiting sentencing.)

In order to conceal their crimes, Mr. Harris and Mr. Meza lied on ATF form 4473, indicating that they were the “actual transferees” of the firearms when they were not. On those same forms, Mr. Ludlow often lied about the date and location of the transaction, the type of firearms sold, and details regarding compliance with the NICS background check.

Under federal law, FFLs are prohibited from selling to straw purchasers or unlicensed dealers who they know are “engaged in the business of selling firearms,” defined as repeatedly devoting time and attention to purchasing and reselling guns for pecuniary gain. Background checks are not necessarily required for in-state, private transfers, but those engaged in the business of selling firearms must be federally licensed and run background checks on their buyers.

In July 2021, ATF executed a federal search warrant on Mr. Ludlow’s residence in Aledo, Texas, where agents seized more than 100 firearms, including 17 AR-15 style firearms, 12 Glock pistols, and approximately 10 unregistered silencers, all of which were later forfeited. At that time, Mr. Ludlow surrendered his federal firearms license.

At Friday’s sentencing hearing, prosecutors said that traces linked Mr. Ludlow to numerous guns recovered from crime scenes across the state of Texas, including multiple homicides.  Others guns that originated with Mr. Ludlow were found in the hands of criminals, and still more were recovered in foreign countries.  

In addition to the conspiracy, Mr. Ludlow admitted to possession of an unregistered silencer roughly 6 inches long and 1 3/8 inches in diameter.

The Bureau of Alcohol, Tobacco, Firearms, & Explosives’ Dallas Field Office conducted the investigation. Assistant U.S. Attorney Levi Thomas is prosecuting all three cases.

The owners of a Duncanville tax preparation business were sentenced to a combined five and a half years in federal prison for defrauding the IRS out of more than $3.3 million, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Valencia Janee Mack, 40, and her former husband, Rodney Lamond Bowman, 47, pleaded guilty in fall 2021 to conspiracy to defraud the United States. Mr. Bowman was sentenced on May 19 by U.S. District Judge Jane J. Boyle to 36 months imprisonment; Ms. Mack was sentenced Thursday to 30 months imprisonment. The pair was ordered jointly and severally liable for $210,442 in restitution.

“Return preparer fraud is like a contagious disease: It affects not only the preparer, but their own clients and the tax-paying public,” said Christopher J. Altemus, Jr., Special Agent in Charge, IRS Criminal Investigation, Dallas Field Office. “Ms. Mack and Mr. Bowman wreaked havoc on our nation’s tax system and, as a result, will serve jail time. I hope this outcome sends a strong message that tampering with the integrity of our tax system will result in jail time."

According to court filings, from January 2015 through April 2019, Ms. Mack owned and operated Phase US Tax Services, where she and Mr. Bowman knowingly prepared and filed fraudulent client tax returns with the IRS.

The false tax returns reported fictitious Schedule C losses and Schedule A itemized deductions, intended to cause the IRS to pay fraudulent refunds.

The false Schedule Cs included purported losses from travel businesses Phase 4 Global (a real business based in Decatur, Alabama) or PlanNet (a real business based in Atlanta, Georgia), to reduce clients’ total income and entitle them to larger refunds from the IRS.

The clients were not legitimate employees, contractors, or franchisees of Phase 4 Global or PlanNet. Moreover, neither of these entities knew that Mack falsely claimed business expenses associated their companies on client tax returns.

Mr. Bowman and Ms. Mack hid the false Schedule C losses that were included on client tax returns by, among other things, omitting relevant pages in the paper copy of the tax returns they provided to clients.

Ms. Mack and Mr. Bowman provided fraudulent documentation clients who were being audited by the IRS, including fake mileage logs and other documents that appeared to substantiate the false business expenses in the fraudulent Schedule Cs. The pair instructed their clients to send these fraudulent documents to the IRS.

Ms. Mack further admitted that she fraudulently filed her 2014 personal tax return, failing to report any income or expenses from Phase US Tax Services and that she failed to file her personal tax return for tax years 2015, 2016, 2017, and 2018, despite earning income from Phase US Tax Services.

The couple shared in the benefits of the tax fraud by splitting the preparation fees deposited into the Phase US Tax Services business account.

The IRS Criminal Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Douglas Brasher prosecuted the case.

A Christ the King finance manager who embezzled more than a quarter of a million dollars from the church was sentenced today to more than four years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Former Christ the King Cathedral Church Lubbock employee Nathan Allen Webb, 43, pleaded guilty in February to wire fraud. He was sentenced Thursday to 51 months in federal prison by U.S. District Judge James Wesley Hendrix, who ordered him to pay $261,440.20 in restitution.

According to plea papers, Mr. Webb – the only church employee with access to the church’s PayPal and Venmo accounts – admitted he transferred $261,440.20 in parishioner donations from the church to himself using those platforms.  Over the course of 18 months, he made more than 230 unauthorized transfers.  He then altered church bank statements to make PayPal and Venmo debits appear as credits, thus concealing his criminal activity from the church finance committee and diocese.

On February 23, 2021, Mr. Webb traveled to Colombia, South America, taking a church laptop with him. While in Colombia, on March 2, he transferred $2,914.07 from the Church’s PayPal account to his personal PayPal account and then to his bank account. The church discovered his fraud and confronted him the following day.

At his sentencing hearing, prosecutors told the judge that following the confrontation, Mr. Webb remained in Colombia, eventually overstaying his visa. The Colombian government ordered him to leave the country, so he purchased a ticket from Cartagena to Fort Lauderdale, where he knew FBI agents would be waiting for him. Instead of boarding the flight, however, he traveled more than 500 miles inland to Pereira. Colombian officials there located and detained him; they continued to hold him based upon an Interpol Red Notice until the U.S. government negotiated his release and returned him to Texas.

Given Mr. Webb’s calculated plot to evade law enforcement, the judge agreed an obstruction of justice enhancement was appropriate.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation with substantial assistance from FBI agents stationed in Colombia. Assistant U.S. Attorney Ann Howey prosecuted the case.  

Two drug traffickers who plotted to assassinate a DEA task force office have plead guilty, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Manuel Gomez-Garcia, 35, and Jorge Humberto Velazco Larios, 29, were indicted in the summer of 2020. Mr. Gomez pleaded guilty to possession with intent to distribute methamphetamine in September 2020 and to conspiracy to use interstate commerce in the commission of murder-for-hire in March 2022. Mr. Larios pleaded guilty to conspiracy to possess with the intent to distribute methamphetamine, possession of methamphetamine with the intent to distribute, and conspiracy to use interstate commerce in the commission of murder-for-hire today.   

Both defendants, believed to be affiliated with Cartel Jalisco Nueva Generation (CJNG), one of Mexico’s most violent and powerful drug cartels – admitted to plotting a hit on a DEA task force office assigned to their drug case.

“These defendants plotted to murder an officer who routinely risks his own safety to rid our streets of dangerous drugs,” said U.S. Attorney Chad Meacham. “The Justice Department will not tolerate retaliatory violence against its own. We are prepared to move mountains to protect the men and women who protect us.”    

“DEA Special Agents and Task Forces Officers know the inherent risks they face when they go out to enforce our mission, disrupt criminal networks, and curb the flow of drugs from reaching our neighborhoods.  Drug related violence affects us all and there is nothing more serious than the intent to take a person’s life,” said Eduardo A. Chávez, Special Agent in Charge of DEA’s Dallas Field Division.  “Through our drug investigation and the tenacious efforts from our colleagues at FBI Dallas to hold these individuals accountable, we are pleased that their admission of guilt means they will now pay for their crimes.”

“Last year 73 law enforcement officers were feloniously killed in line of duty incidents. Those statistics are a stark reminder that officers face a multitude of threats every day,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The FBI is committed to keeping our law enforcement partners safe. In this instance, a dangerous act was prevented and ensured that a law enforcement officer made it home safely.”

According to court documents, while behind bars on drug charges, Mr. Gomez told another individual at the jail he wanted to “off” the officer. He set the budget at $20,000: $5,000 up front and $15,000 following the hit.

In a subsequent phone call with an individual outside the jail, Mr. Gomez confirmed he wanted the DEA Task Force Officer murdered.

Mr. Gomez then called his girlfriend and his sister in Mexico to arrange for delivery of the murder-for-hire fee. He advised them that the co-defendant in his drug case, Mr. Larios, would also contribute to the up-front payment.

Meanwhile, Mr. Larios, also behind bars, called an unindicted co-conspirator and asked him to deliver money to a workshop “so we can take care of something.”

On June 11, the unindicted co-conspirator, referred to in court documents by the nickname “Roberto,” made a $3,000 “down payment” for the murder of the agent. Five days later, he made an additional $2,000 payment on behalf of Mr. Gomez and Mr. Larios.

Mr. Gomez once again called his contact outside the jail. He described the DEA agent he wanted killed, then instructed the individual to call his girlfriend and sister, who he said had documents that could help the hit man figure out the name of the target.

Shortly thereafter, his sister received a photo of DEA task force officer “T.H.” via the messaging app, WhatsApp. The following day, she flashed the image during a jailhouse video call with Mr. Gomez.  

“Yes, that’s him,” Mr. Gomez told her, smiling.

The defendants now face up to life in federal prison.

The U.S. Drug Enforcement Administration’s Dallas Field Division, the Federal Bureau of Investigation’s Dallas Field Office, the Texas Department of Public Security, the U.S. Marshals Service, and ICE Enforcement & Removal Operations investigated the drug case with the assistance of the Midlothian Police Department and Ellis County Sheriff’s Office. The FBI’s Dallas Field Office - Violent Crime Task Force investigated the murder-for-hire in close collaboration with the DEA. The Johnson County Sheriff’s Office, U.S. Marshals Service, and U.S. Customs & Border Protection assisted. Assistant U.S. Attorneys PJ Meitl and Travis Elder prosecuted the drug case. Assistant U.S. Attorney Rick Calvert is prosecuting the murder-for-hire.

 

Four United Development Funding executives have been sentenced to a combined 20 years in federal prison for fraud, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

In January, a federal jury convicted UDF CEO Hollis Morrison Greenlaw, UDF Partnership President Benjamin Lee Wissink, UDF CFO Cara Delin Obert, and UDF Asset Management Director Jeffrey Brandon Jester of ten counts, including conspiracy to commit wire fraud affecting a financial institution, conspiracy to commit securities fraud, and securities fraud. They were sentenced today by U.S. District Judge Reed C. O’Connor.

Mr. Greenlaw was sentenced to seven years in federal prison; Mr. Wissink to five years; Ms. Obert to five years; and Mr. Jester to three years. The judge also ordered Mr. Greenlaw, Mr. Wissink, and Ms. Obert to pay fines of $50,000 each. 

“UDF executives comingled funds, shuffling money from one fund to another without disclosing their actions to investors or regulators,” U.S. Attorney Chad Meacham said following the verdict. “The Northern District of Texas has always been tenacious in its pursuit of white collar criminals and this case is no exception. We were proud to bring these defendants before a jury and are pleased that the judge saw fit to sentence them to a lengthy prison term.”

“Today’s sentences reaffirm the FBI’s commitment to hold executives accountable for engaging in corporate fraud and defrauding investors. We will continue working with our partners to investigate anyone that attempts to manipulate investment funds for their own personal benefit,” said Matthew DeSarno, Special Agent in Charge of the FBI’s Dallas Field Office. “Our agents, analysts, and forensic accountants dedicated years to ensuring this investigation was done with the utmost precision. It is the reason why these defendants will now spend years in federal prison.”

According to evidence presented at trial, the defendants orchestrated a scheme to mislead investors and the SEC about their funds’ performance. 

Founded in 2003 and headquartered in Grapevine, UDF utilized a family of five funds – UDF I, II, III, IV, and V – to invest in various residential real estate developers and private homebuilders.

When developers failed to repay money they borrowed from one fund, triggering multi-million dollar shortfalls, the defendants transferred money out of another fund in order to pay distributions to the original fund’s investors, all without disclosing the transfers to the SEC and the investing public.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Tiffany H. Eggers (NDTX Criminal Chief), Rachael Jones, Elyse Lyons, and Errin Martin prosecuted the case.

A former federal correctional officer pleaded guilty today to sexually abusing multiple inmates in Fort Worth, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Luis Curiel, 47, pleaded guilty on Wednesday to two counts of sexual abuse of a ward. 

“Curiel abused his authority as a correctional officer and sexually abused several inmates under his supervision.  Sexual abuse of inmates is never tolerated, and the Department of Justice Office of the Inspector General will continue to investigate and hold accountable those who engage in this kind of conduct,” said Cloey C. Pierce, Special Agent in Charge of the Department of Justice Office of the Inspector General Dallas Field Office.

According to plea papers, Mr. Curiel, a former Federal Bureau of Prisons correctional officer at the Carswell Federal Medical Center, admitted to sexually abusing at least three inmates, identified in court documents as B.B.M., M.C., and N.R.

In October 2021, Mr. Curiel admitted, he met one inmate by a staff elevator and engaged in sexual acts with her in a nearby stairwell. That same month, he engaged in sexual acts with two more inmates outside the same staff elevator. At the time, all three victims were in official detention and under his custodial, supervisory, or disciplinary authority.

FMC Carswell is an administrative security federal prison that serves female inmates with specialized medical and mental health needs.

Mr. Curiel now faces up to 30 years in federal prison (15 years per count). His sentencing has been set for Sept. 8.

The Department of Justice Office of Inspector General conducted the investigation with the full cooperation of the Federal Bureau of Prisons. Assistant U.S. Attorney Aisha Saleem is prosecuting the case.

Eight alleged methamphetamine traffickers were arrested in Tulia, Texas on Tuesday in Operation Tulia Takedown, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham. Two additional defendants who were already in state custody have also been charged federally.

During Tuesday’s bust, agents and officers also seized five firearms, hundreds of rounds of ammunition, 1.4 pounds of methamphetamine, 2.6 pounds of marijuana, and 93 Xanax pills.

The defendants were charged in an eight count indictment unsealed Thursday. Those charged include:

• Manuel Socorro Urenda, aka “Bossman,” charged with conspiracy to distribute methamphetamine

• Jamie Catina Haddock, aka “Jamie Hurt,” charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Gilbert Lee Basaldua, charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Santiago James Carrasco (already in custody), charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Rojelio “Roy” Reyes, charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Gabriel Trevino, charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Raul Mancha Montoya, charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Lydia Delgado Hawthorne, charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Jim Bob Been, charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

• Cayetano Vela Medrano (already in custody), charged with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine

“FBI Dallas’ criminal investigative focus is to target any criminal enterprise that drives violence and threatens to destroy neighborhoods, from rural towns to sprawling cities,“ said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Through our extensive partnerships and task forces we’re sending a direct message to offenders that committing continual criminal incidents will not be tolerated, and that we will deploy our collective strength to ensure the safety and security of our communities.”

An indictment is merely an allegation of criminal conduct, not evidence. All defendants are presumed innocent until proven guilty in a court of law.

If convicted, Mr. Urenda and Ms. Haddock face up to life in federal prison; the remaining defendants face up to 20 years.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation with the assistance of the Amarillo Police Department, the Tulia Police Department, the Texas Department of Public Safety, and the Randall County Sheriff’s Office. Assistant U.S. Attorney Meredith Pinkham is prosecuting the case.

A Dallas man pleaded guilty yesterday to running a brutal sex trafficking ring for nearly two decades, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Anthony Johnson, 45, pleaded guilty to conspiracy to commit sex trafficking through force, fraud, and coercion, and sex trafficking on May 10, narrowly avoiding his trial, which was scheduled to begin the same day.

“Like Tremont Blakemore, a north Texas trafficker who pleaded guilty just two weeks ago, Anthony Johnson systematically tormented his victims, convincing them they had no choice but to bend to his will,” said U.S. Attorney Chad Meacham. “It’s difficult to fathom that human trafficking happens on the streets of Dallas, but it does, every day. If you or someone you know is being victimized, reach out for help. As impossible as it may seem in the moment, there is a way out.”  

“Those attempting to profit from commercial sex through the viciousness of human trafficking are causing significant harm in our communities,” said Acting Special Agent in Charge of HSI Dallas Christopher Miller. “This defendant’s guilty plea moves one step closer to finding justice for the victims he brutalized and manipulated.”

In plea papers, Mr. Johnson, aka “Macc Bucc,” admitted he forced numerous women to engage in commercial sex acts and turn the proceeds over to him. He set “quotas,” compelled the women to work for hours on end, and brutally beat them with an extension cord when they came up short, “disrespected” him, or did not follow his rules. He also required the women to steal from commercial sex customers, instructing them to rifle through customers’ pockets for cash or jewelry and check their cars for valuables.

One woman, identified in court documents as “Adult Victim 7,” endured his abuse for several years. The night he recruited AV7, Mr. Johnson directed his second-in-command, Demetrice Deckard, to take her to Harry Hines and teach her how to solicit commercial sex customers. She engaged in commercial sex with her first customer just a few days later. Throughout her time in his trafficking organization, AV7 was forced to travel cross-country to engage in commercial sex and was routinely beaten when she tried to leave the organization.

In a pretrial filing, prosecutors indicated they were prepared to introduce into evidence a 911 call placed by a different victim’s mother after her daughter called her in tears from a passerby’s phone. 

“She said, ‘mamma, I wanna come home, they won’t let me come home,’ she said, ‘they got everything I got,’” the woman told the dispatcher. “‘Mamma, he got me by gunpoint, he’s got these girls following me, he beat me up real bad.’”

In another pretrial filing, prosecutors indicated that they were also prepared to introduce evidence that Mr. Johnson obtained a contraband cell phone while in jail awaiting trial and used the phone to continue running his organization.  According to prosecutors, text messages obtained from the cell phone showed that Mr. Johnson continued to instruct women where to work, which hotels to use, how to steal from customers, and when they could finish work for the night.  Mr. Johnson also directed women to send him videos of themselves having sex with commercial sex customers.   In plea papers, Mr. Johnson admitted that he also ran his trafficking organization from behind bars from 2014 to 2019, following a conviction for aggravated assault with a deadly weapon.

Mr. Johnson now faces up to life in federal prison.

Ms. Deckard pleaded guilty in April to conspiracy to engage in trafficking through force, fraud, and coercion and faces up to life in federal prison.  Another co-defendant, Ashley Neice, pled guilty to conspiracy to obstruct an official proceeding and admitted to conspiring with Mr. Johnson to contact a victim in the criminal case in order to tell her not to cooperate with law enforcement. Ms. Neice faces up to 20 years in federal prison.

Homeland Security Investigations’ Dallas Field Division conducted the investigation with the assistance of the Dallas Police Department, Miami Police Department, and the Miami Office of Attorney General. Assistant U.S. Attorneys Melanie Smith and Renee Hunter prosecuted the case with the help of appellate liaison Brian McKay.

If you believe you or someone you know is a victim of human trafficking, call local law enforcement or the 24/7 confidential National Human Trafficking Hotline at 1-888-373-7888.

An alleged Dallas drug trafficker who rammed his vehicle into a police car during his arrest has been charged with gun and drug crimes, announced U.S Attorney for the Northern District of Texas Chad E. Meacham.

Angel Manuel Fuentes-Melendez, 23, was indicted on Tuesday with one count of conspiracy to possess with intent to distribute methamphetamine, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm during a drug trafficking crime.

According to a criminal complained filed previously, in mid-April, DEA agents instructed a confidential source to negotiate the purchase of five kilograms of meth from a Mexican drug supplier he knew through the chat application WhatsApp. The Mexican drug supplier directed the source to meet a local drug supplier – later identified as Mr. Fuentes – at a parking lot on Lombardy Lane in northwest Dallas. 

Early in the evening on April 14, teams observed Mr. Fuentes’ black Lincoln SUV exit the parking lot of a nearby apartment complex and pull up behind the source’s vehicle, which was parked in the gas station lot. The source then exited his vehicle and approached Mr. Fuentes’ vehicle to chat; while there, he observed methamphetamine in the defendant’s back seat.

Agents in covert police vehicles surrounded Mr. Fuentes’ vehicle, then activated their lights. Mr. Fuentes immediately placed the vehicle in reverse and collided with the police car behind him, which at the time was flashing red and blue.  He was apprehended without further incident and transported to a police station, where he allegedly admitted that he’d been directed to deliver five kilograms of methamphetamine to the confidential source. He said he’d been receiving and delivering roughly 15 to 20 kilograms of meth per month for four to five months.

Meanwhile, agents searched an apartment where Mr. Fuentes had been staying. There, they found 33 kilograms of crystal meth stashed in the bedroom and adjoining closet and a Ruger 9mm pistol placed on top of the dresser in plain view.

Agents noted that three young toddlers were present and playing in the apartment at the time.

An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Fuentes is presumed innocent until proven guilty in a court of law.

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

The Drug Enforcement Administration’s Dallas Field Office and the Dallas Police Department conducted the investigation. Assistant U.S. Attorney L. Rachael Jones is prosecuting the case.

Eargo Inc. (Eargo), a for-profit public corporation headquartered in California that sells and dispenses hearing aid devices directly to customers nationwide, has agreed to pay $34.37 million to resolve allegations that it submitted or caused the submission of claims for hearing aid devices for reimbursement to the Federal Employees Health Benefits Program (FEHBP) that contained unsupported hearing loss diagnosis codes.

The FEHBP, administered by the U.S. Office of Personnel Management (OPM), is the largest employer-sponsored group health insurance program in the world. It provides health benefits through various health insurance carriers and covers over eight million federal employees, retirees, former employees, family members and former spouses. Certain FEHBP health insurance plans elect to offer a hearing aid benefit, which varies from plan to plan. FEHBP carriers that offer a hearing aid benefit require that claims for hearing aid devices include a hearing loss-related diagnosis code. These diagnosis codes must be supported by a hearing loss diagnosis, which is typically based on a hearing test performed by a health care provider.

“The FEHBP plays a vital role in ensuring the health and wellbeing of our nation’s dedicated civil servants and their families,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice is committed to the integrity of this program and will pursue appropriate remedies against providers who misuse it.”

“Public servants rely on the FEHBP to keep their families healthy,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas. “Billing the program for medical devices patients may not need raises costs across the board. We are proud to hold Eargo accountable for its alleged use of unsupported diagnosis codes.”

“Submitting unsupported claims to the FEHBP, knowingly and otherwise, harms the American taxpayer,” said Deputy Inspector General Norbert E. Vint of OPM Office of the Inspector General (OPM-OIG). “I am incredibly grateful to our investigative staff and partners at the Department of Justice for their unwavering commitment to protecting the integrity of the FEHBP and preserving the trust fund for the health care of our nation’s dedicated civil servants.” 

The United States alleged that, from Jan. 1, 2017, through Jan. 31, 2021, Eargo included unsupported hearing loss-related diagnosis codes on claims for hearing aid devices that Eargo submitted to the FEHBP and on invoices — called superbills — that Eargo provided to FEHBP beneficiaries to obtain reimbursement for such devices from the FEHBP. The United States further alleged that between Feb. 1, 2021, and Sept. 22, 2021, Eargo continued to include these unsupported hearing loss-related diagnosis codes on claims and superbills — even after completing an internal review of its billing and coding practices in January 2021 — resulting in Eargo knowingly submitting or causing the submission of false claims for payment to the FEHBP.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Northern District of Texas, with assistance from OPM-OIG.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Fraud Section Trial Attorney Samuel Lehman and Assistant U.S. Attorney Kenneth Coffin for the Northern District of Texas.

The claims settled by this agreement are allegations only and there has been no determination of liability.

A Dallas man who called himself “Macknificent” pleaded guilty today to human trafficking, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Tremont Blakemore, 42, was first charged in September 2019. He pleaded guilty Wednesday to sex trafficking through force, fraud, and coercion before U.S. District Judge Ada Brown.

“This defendant systematically brutalized his victims, convincing them that they had no choice but to live life according to his dictates,” said U.S. Attorney Chad Meacham. “We formed the North Texas Trafficking Task Force – a coalition of federal, state, and local law enforcement dedicated to ending the scourge of human trafficking – to pursue cases just like this one. We hope that this guilty plea will be a balm to survivors as they work to rebuild their lives.”

“This defendant’s era of coercing and violently forcing individuals into the perils of sex trafficking is over thanks to the work of our special agents and law enforcement partners who investigated and arrested this deviant criminal,” said acting Deputy Special Agent in Charge of HIS Dallas Bradley Hudson.  “He will soon face the harsh realities of his transgressions as he spends a good portion of his life behind bars.”

In plea papers, Mr. Blakemore admitted to running a large-scale human trafficking organization, using the threat of grotesque violence to force women to engage in commercial sex acts for his financial benefit.

He compelled the women to travel cross-country to engage in commercial sex and posted ads for them on sites like Backpage.com. He demanded that the women to turn all proceeds over to him and required them to seek permission for personal expenditures.

Mr. Blakemore further admitted that when his victims disobeyed his “rules” – leaving the house without his permission, keeping money for themselves, etc. – he used violence to quell them into submission. According to court documents, victims told law enforcement that he slapped, punched, choked, kicked, and burned them with cigarettes.

“I’m going to make an example out of someone soon,” he wrote in a group text message to victims. “I will not continue to tolerate disrespect that’s one of my biggest pet peeves.” 

In an effort to appear successful in order to recruit additional victims to his trafficking organization, Mr. Blakemore admitted, he used proceeds of his victim’s sexual encounters to purchase luxury goods, including multiple pieces of diamond and gold jewelry and multiple Rolex watches.  He flouted his lifestyle to impress other traffickers, and even sported multiple trophies touting his success as a “pimp.”

Mr. Blakemore now faces up to 20 years in federal prison. His sentencing has been set for Thursday, Oct. 6.

Homeland Security Investigations’ Dallas Field Office conducted the investigation with the assistance of the Oakridge Police Department, the Dallas Police Department, the Federal Bureau of Investigation’s Dallas Field Office, and the North Texas Trafficking Task Force’s law enforcement partners. Assistant U.S. Attorneys Melanie Smith and Nicole Dana prosecuted the case.

If you believe you or someone you know is a victim of human trafficking, call local law enforcement or the confidential National Human Trafficking Hotline, staffed 24/7, at 1-888-373-7888.

The final defendant in the Han Gil drug trafficking case was sentenced today to 40 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

In June 2021, after seven days of trial, a jury convicted Bryan Reshad Hill, 39, of conspiracy to distribute heroin and crack cocaine. He was sentenced Monday by U.S. District Judge Karen Gren Scholer.

According to evidence presented at trial, Mr. Hill, aka “Black,” dealt heroin and cocaine out of Han Gil Hotel Town, a drug infested establishment shut down by the feds in March 2019. He and other dealers paid an inflated daily rate, dubbed a “drug tax,” to induce the hotel’s proprietor to turn a blind eye to the trafficking occurring inside the building.   

The Han Gil – which served as home base for numerous high-level traffickers – saw four confirmed deaths, two non-fatal shootings, and dozens of drug-related incidents in the months before its closure. Numerous drug users, who often injected themselves while still on the premises, were subjected to brutality (including beatings and burnings with a butane torch) and sexual abuse by the dealers headquartered there. The hotel, once located caddy-corner to a local elementary school, has since been demolished.

According to evidence presented at his sentencing hearing, Mr. Hill raped and presumably murdered a 19-year-old drug user inside one of the Han Gil trap rooms on Dec. 27, 2018.

A witness to the assault testified at Mr. Hill’s jury trial that she heard the defendant tell the victim, “stop fighting, you cannot win.” The witness later saw the girl’s lifeless body on the floor of restroom after Mr. Hill exited. Her corpse was dumped in a park in Oak Cliff and recovered a month later.

During the hearing, Judge Scholer stated on the record that based upon her review of surveillance footage taken from the hotel – which showed the defendant carry the near-unconscious victim into the bathroom, then exit the bathroom a short time later wearing gloves on both hands (download footage here) - she determined that because the girl was unable to consent to a sex act, Mr. Hill had perpetrated a sexual assault against a vulnerable victim.

Her death was just one of several stemming from drug incidents at Han Gil. Two former Coppell High School students, both age 22, died of overdoses during the summer of 2018, and the body of an unknown male was removed from the property that fall.

Twenty three additional defendants have already been sentenced in this case, including Han Gil owner Su Amos Mun, who pleaded guilty to maintaining a drug involved premises and was sentenced to 20 years in federal prison, and lead dealer Eric Dewayne Freeman, who pleaded guilty to conspiracy to possess with the intent to distribute heroin, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a felon and was sentenced to 30 years in federal prison.

“Behind the walls of the Han Gil, this defendant committed truly heinous acts,” said U.S. Attorney Chad Meacham. “It has been four years since our office began its investigation of Han Gil Hotel Town, and today, we are proud to bring this sordid case to a close. We know, however, that our work is far from over. We will continue our crack down on violent drug traffickers and the establishments that allow them to operate.”

“To say the crimes that occurred at the Han Gil Hotel were horrendous would not be enough to describe the degree of violence, viciousness, and pain that occurred at the hands of Mr. Hill and others,” said DEA Special Agent in Charge Eduardo A. Chávez.  “During this time where we honor Victims’ Rights Week, DEA Dallas will continue to work tirelessly to keep these atrocities and other acts of drug-related violence from repeating themselves.”

The Drug Enforcement Administration’s Dallas Field Division conducted the investigation with assistance from the Federal Bureau of Investigation’s Dallas Field Office, the Coppell Police Department, the Dallas Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Office, the U.S. Marshal’s Service, IRS - Criminal Investigations, Homeland Security Investigations, the U.S. Postal Inspection Service, and the Grand Prairie, Arlington, Grapevine, Lancaster, Plano, Farmers Branch, Garland, Rowlett, Denton, Lewisville, and McKinney police departments.

Assistant U.S. Attorneys Rick Calvert and Phelesa Guy prosecuted the criminal case. Assistant U.S. Attorneys Scott Hogan, Lindsey Beran (fmr.), and Braden Civins handled the civil case. Assistant U.S. Attorneys Beverly Chapman and Melissa Childs oversaw the forfeiture

Two Lubbock postal contractors have been sentenced to a combined seven years and 10 months in federal prison for possession of stolen mail, announced Acting U.S. Attorney Chad E. Meacham.

The investigation – which culminated in the recovery of more than 8,000 pieces of mail with face values in excess of $4 million – marked the largest ever seizure of stolen mail in Northern District of Texas history.

Joe Roy Rivas, III, 22, and Jessica Lynn Solomon, 35, were indicted in October 2021. Mr. Rivas pleaded guilty in December 2021 to conspiracy to possess stolen mail and he was sentenced earlier this month to 57 months in federal prison. Two weeks after Mr. Rivas entered his plea, Ms. Solomon pleaded guilty to the same charges; she was sentenced Thursday to 37 months in federal prison.

“The U.S. Postal Inspection Service takes any report of mail theft seriously and will conduct an aggressive investigation,” said Thomas Noyes, Postal Inspector in Charge of the Fort Worth Division.  “An egregious element of this case was the discovery of these few contractors who chose to violate their position of trust.  This action brought to bear a swift and comprehensive response by both Postal Inspectors and our law enforcement partners aimed at bringing the criminal activity to an end.  We thank the U.S. Attorney’s Office in the Northern District of Texas for their commitment in seeking justice on behalf of those who were affected by the crimes this group committed.  Postal Inspectors will not cease in their ongoing effort to safeguard the U.S. Postal Service, its customers and ensure public trust in the mail.”

According to plea papers, Mr. Rivas and Ms. Solomon were former co-workers at Cargo Force, Inc., a company that contracts with the United States Postal Service to load mail into and out of air containers destined for flights to and from the Lubbock International Airport.

The defendants admitted they began stealing mail at the start of their employment with Cargo Force, approximately two years before they were caught.  During their shifts, they sifted through mail looking for items containing merchandise, cash, gift cards, checks, and money orders. 

The 8,000 pieces of stolen mail law enforcement recovered from the Rivas and Solomon were post-marked within a four-day period.  Law enforcement found the staggering heap of stolen mail stuffed into 55-gallon trash bags and stockpiled inside a residence the two shared in Slaton, Texas.  

The investigation revealed that the conspiracy involved regular “washing” of checks – removing the name of one payee to replace it with another – and selling cell phones removed from mail handled by Cargo Force. 

At their sentencing hearings, prosecutors advised that the mail was destined for 36 states within the contiguous United States, Washington, D.C., and the Virgin Islands. 

Prosecutors highlighted some of the mail that had been kept from its proper recipients: a multitude of payments to entities such as mortgage bankers; over 40 pieces of mail related to federal court proceedings; more than 50 letters from local college admissions offices to applicants; and numerous greeting cards intended to brighten someone’s day. The addresses and addressors included churches, charitable organizations, prison ministries, local judicial and law enforcement entities, financial institutions, trust companies, banks, lenders, local school districts, hospitals, hospices, pharmaceutical companies, medical equipment companies, and funeral homes.

The U.S. Postal Inspection Service conducted the investigation with the assistance of the Texas Department of Public Safety and the Slaton Police Department. Assistant U.S. Attorneys Ann Howey and Jeff Haag prosecuted the case.

 

A local Dallas cell head who worked with the Santa Rosa Lima Drug Cartel and other Mexico-based drug trafficking organizations was sentenced Wednesday to more than 16 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Carlos Espinoza Juarez, an 33-year-old Mexican national, pleaded guilty in July 2020 to money laundering and conspiracy to possess with intent to distribute heroin. He was sentenced by U.S. District Judge Ed Kinkeade.

According to plea papers, Mr. Juarez admitted he conspired to traffic drugs.

On Feb. 8, 2015, he admitted, he directed codefendant Heriberto Talamantes-Ceballos to deliver approximately one ounce of heroin to a buyer in exchange for $880.00; about a month later, on March 12, he directed codefendant Edwin Contreras-Diaz to deliver approximately three ounces of heroin to a buyer in exchange for $2640.00. Both men did so.  The defendant also admitted to sending approximately three kilograms of heroin to Dorchester, Massachusetts.

Mr. Juarez further admitted to orchestrating a series of other drug deliveries, spanning from Texas to South Carolina, over the course of at least four years.

He also admitted to using fake names to wire money to recipients in Guanajuato, Mexico, in an effort to launder the proceeds of his illegal drug dealing.

As part of his plea deal, Mr. Juarez agreed to forfeit more than $35,000, six firearms, and two vehicles, including a Chevy Tahoe and a GMC Sierra. A foreign citizen in the U.S. illegally, he will face deportation proceedings after serving his sentence.

Seven additional defendants have been convicted in this case: 

• Edwin Contreras-Diaz, aka “Flaco” – pleaded guilty to possession with intent to distribute heroin
• Heriberto Talamantes-Ceballos – pleaded guilty to possession with intent to distribute heroin
• Marcos Fernando Valle – pleaded guilty to conspiracy to possess with intent to distribute cocaine 
• Adrian Lopez Olalde – pleaded guilty to money laundering and was sentenced to 72 months in federal prison
• Omar Suarez-Garcia – pleaded guilty to conspiracy to possess with intent to distribute heroin
• Bianca Jeannette Martinez – pleaded guilty to conspiracy to possess with intent to distribute heroin
• John Paul Sanchez – pleaded guilty to conspiracy to possess with intent to distribute heroin 
   

The Drug Enforcement Administration’s Dallas Field Division and the Texas Department of Public Safety conducted the investigation with the assistance of the Grand Prairie Police Department, Grapevine Police Department, Lancaster Police Department, Dallas Police Department, Haltom City Police Department, the DEA’s Boston Field Division, the 24th Judicial district Drug and Violent Crime Drug Task Force, Decatur County, TN, U.S. Customs and Border Patrol, the Will County Sheriff’s Office, Peotone, IL., the Illinois State Police, Columbia Police Department, Columbia, South Carolina and IRS - Criminal Investigations.  The case was prosecuted by Assistant United States Attorney George Leal.

The case stemmed from an Organized Crime Drug Task Force (OCDETF) investigation led by the North Texas OCEDTF Strike Force.  The OCDETF program was established in 1982 in order to attack and reduce the supply of illegal drugs entering the United States and to diminish violence and other criminal activity associated with the drug trade.  The OCDETF program works with federal, state, and local law enforcement agencies to identify, disrupt, and dismantle, drug traffickers and drug trafficking networks.

A Liberian national who orchestrated a fraudulent scheme to secure more than $23 million in forgivable Paycheck Protection Program (PPP) loans was sentenced Thursday afternoon to 10 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Steven Jalloul, a 43-year-old tax consultant from the Dallas area, was first charged via criminal complaint in September 2020; he pleaded guilty on in October 2021 to a superseding information charging him with one count of engaging in monetary transactions using property derived from unlawful activity. He was sentenced by U.S. District Judge Jane J. Boyle.

“Mr. Jalloul callously exploited the Paycheck Protection Program, which was designed to keep struggling businesses afloat during the pandemic. He took money out of the hands of businesspeople who truly needed it,” said U.S. Attorney Chad E. Meacham. “The Justice Department will not stand for PPP fraud.”

According to plea papers, Mr. Jalloul admitted he defrauded lenders participating in the Paycheck Protection Program — a measure authorized by Congress in the early days of the pandemic to award forgivable loans to small business impacted by COVID-19 — while awaiting sentencing in a separate tax fraud case.

In court documents, he admitted that he submitted roughly 170 falsified PPP loan applications to lenders (including through a fintech company) seeking more than $23 million on behalf of over 160 clients of his tax preparation business, Royalty Tax & Financial Services LLC.

Mr. Jalloul admitted he inflated clients’ employee rosters and monthly payroll expenses in order to increase the amount of PPP funds for which their businesses would be eligible.  He generally charged clients a 2 to 20 percent commission on the PPP loans they received and even listed his ex-wife as Royalty Tax’s authorized representative, without her consent, when seeking an inflated PPP loan for his own business.

In total, 97 false PPP loan applications were ultimately approved, and Mr. Jalloul’s clients were awarded more than $12 million in PPP money. Those clients paid him at least $972,114 in fees. Mr. Jalloul also admitted to submitting a fraudulent PPP loan application on behalf of his tax preparer company and received $163,500 in PPP funds.

Mr. Jalloul was already behind bars at FCI-Seagoville, having pleaded guilty to tax fraud in the separate case in January 2020; in that case, he was sentenced to six years in federal prison. Judge Boyle ruled that he will serve his sentence in the PPP case consecutive to his sentence in the tax fraud case.

The Dallas Field Offices of the Federal Deposit Insurance Corporation's Office of Inspector General and IRS - Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Fabio Leonardi and Marty Basu are prosecuting the case. Assistant U.S. Attorney Dimitri Rocha is handling the asset-forfeiture component of the case.

The Paycheck Protection Program was authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted on March 29, 2020, to provide emergency financial assistance to Americans suffering economic hardship due to the COVID-19 pandemic. The PPP initially provided for up to $349 billion in forgivable loans to small businesses for payroll costs and certain other expenses, including rent; in April 2020, Congress authorized more than $300 billion in additional PPP funding. The PPP allows qualifying small businesses to receive loans with a maturity of two years and an interest rate of 1 percent. In addition, the PPP allows both the interest and principal on the loans to be forgiven if the business spends the money on qualifying expenses within a designated period of time

A Fort Worth man was sentenced today to 35 years in federal prison for sexually abusing a 7-year-old girl, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Sherman Moore, 65, pleaded guilty in November 2021 to sexual exploitation of children. He was sentenced Friday by U.S. District Judge Reed C. O’Connor.

According to plea papers, Mr. Moore admitted that in the fall of 2019, he enticed a 7-year-old child into sexually explicit conduct in order to videotape her.  

On Sept. 7, Mr. Moore recorded a video focusing on the victim’s genitals as she walked across her mother’s bed in her home in Fort Worth. He then uploaded the file to his Google Drive.

Fort Worth Police Department and Homeland Security Investigations’ Fort Worth Field Division conducted the investigation. Assistant U.S. Attorney Aisha Saleem prosecuted the case.

Just two months after being charged, all 11 defendants implicated in the $300 million Spectrum/Reliable healthcare fraud have pleaded guilty, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Ten defendants, including two medical doctors, were indicted February 9. An eleventh defendant was charged on March 16.

Six of the original ten defendants – Laredo-based internal medicine doctor Eduardo Canova, family medicine doctor Jose Maldonado, nurse practitioner Keith Wichinski, Reliable Labs cofounder Abraham Phillips, marketing firm owner Juan David Rojas, and marketing employee Laura Ortiz – filed plea papers on February 11, just two days after being indicted. The final defendant – Reliable Labs cofounder Biby Kurian – filed plea papers on April 6 and entered her plea on April 13.

“The swift resolution of this case is a testament to both our office and to the investigative agencies that worked diligently to ensure our case was airtight,” said U.S. Attorney Chad Meacham. “We cannot allow physicians’ judgement to be clouded by financial considerations.”

“This proactive investigation identified an illegal kickback conspiracy that resulted in substantial evidence and a guilty plea from each defendant,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “I commend our partners and the Northern District of Texas for their meticulous work in unraveling the schemes perpetrated by these defendants, and for their work to protect American taxpayers and the integrity of our healthcare system.”

According to court documents, the founders of several lab companies, including Unified Laboratory Services, Spectrum Diagnostic Laboratory, and Reliable Labs LLC, paid kickbacks to induce medical professionals to order medically unnecessary lab tests, which they then billed to Medicare and other federal healthcare programs.

The medical professionals -- including Dr. Canova, Dr. Maldonado, and Mr. Wichinski – accepted the bribes and ordered millions of dollars’ worth of tests.

Meanwhile, Unified, Spectrum, and Reliable disguised the kickbacks as legitimate business transactions, including as medical advisor agreement payments, salary offsets, lease payments, and marketing commissions.

The labs, through marketers, paid doctors hundreds of thousands of dollars for “advisory services” which were never performed in return for lab test referrals. They also paid portions of the doctors’ staff’s salaries and a portion of their office leases, contingent on the number of lab tests they referred each month. In some instances, lab marketers even made direct payments to the provider’s spouse.  (When the labs threatened one provider that payments would cease if he didn’t refer more tests, he immediately increased his lab referrals, averaging approximately 20 to 30 referrals per day.)

Knowing they could disguise additional kickbacks using a provider-ownership model, the founder of Spectrum and Unified, Jeffrey Madison, convinced the co-founders of Reliable to convert Reliable into a physician-owned lab. Reliable offered physicians ownership opportunities only if those physicians referred an adequate number of lab tests. In some cases, they made advance disbursement payment to physicians in an effort to appease the physician and ensure he would not send samples to other labs.

As a result of these kickbacks, laboratories controlled by the defendants were able to submit more than $300 million in billing to federal government healthcare programs. 

In plea papers, Dr. Maldonado admitted he received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests; Dr. Canova admitted he received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests.

Defendants’ pleas are as follows:

• Jeffrey Paul Madison, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory – conspiracy to pay and receive healthcare kickbacks and a substantive count of paying and receiving healthcare kickbacks (two counts)

• Mark Christopher Boggess, chief operating officer for Spectrum and Unified – misprison (concealment) of a felony

• Biby Ancy Kurian, co-founder of Reliable Labs, LLC – conspiracy to pay kickbacks

• Abraham Phillips, co-founder of Reliable Labs, LLC – conspiracy to pay kickbacks

• Dr. Jose Roel Maldonado, family medicine doctor based in Laredo – conspiracy to solicit and receive illegal kickbacks

• Dr. Eduardo Carlos Canova, internal medicine specialist based in Laredo – conspiracy to solicit and receive illegal kickbacks

• Keith Allen Wichinski, board-certified nurse practitioner based in San Antonio – conspiracy to solicit or receive kickbacks

• David Michael Lizcano, owner of DCLH, a marketing firm engaged by Unified, Spectrum, and Reliable – conspiracy to pay and receive healthcare kickbacks and a substantive count of paying and receiving healthcare kickbacks (two counts)

• Laura Ortiz, sister of David Lizcano and employee at his marketing firm – conspiracy to pay and receive healthcare kickbacks

• Juan David Rojas, owner of Rojas & Associates, another marketing firm engaged by Unified, Spectrum, and Reliable – conspiracy to pay and receive healthcare kickbacks

• Sherman Kennerson, investor in Unified (charged via criminal information) – conspiracy to pay kickbacks

 

Under the applicable statutes, Mr. Madison and Mr. Lizcano face up to 15 years each in federal prison. Mr. Kennerson, Ms. Ortiz, Mr. Phillips, Ms. Kurian, Dr. Maldonado, Dr. Canova, Mr. Wichinski, and Mr. Rojas face up to five years; Mr. Boggess faces up to three years.

“The expeditious resolution of this matter is a testament to the thorough investigation and valuable collaboration between investigative partners and prosecutors,” said Miranda L. Bennett, Special Agent in Charge for the Office of Inspector General of the U.S. Health and Human Services.  “We will continue working with our partners to protect federal health care programs and the beneficiaries who depend on these programs for treatment and care.”

“As the investigative arm of the DoD Office of Inspector General, the Defense Criminal Investigative Service (DCIS) and our colleagues work hard to hold accountable those who undermine Federal health care programs such as TRICARE, “said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office.  "Safeguarding TRICARE not only protects our warfighters, their families, and retirees, but it also preserves valuable taxpayer resources."

The Federal Bureau of Investigation’s Dallas Field Office – Fort Worth Resident Agency conducted the investigation with the assistance of the U.S. Department of Health and Human Services’ Office of Investigations, the Defense Criminal Investigative Service (DCIS), and the Veterans Affairs’ Office of Inspector General. Assistant U.S. Attorney P.J. Meitl is prosecuting the case.

A Dallas gang member who sold multiple firearms to an undercover ATF agent was sentenced today to more than 15 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Vinson Lee Willis, Jr., aka “Man Man,” pleaded guilty in September 2021 to three counts of being a felon in possession of a firearm. He was sentenced Tuesday to 188 months in federal prison.

In plea papers, Mr. Willis, a convicted felon, admitted to unlawful possession of at least 17 firearms, including one with an obliterated serial number.

According to court documents, an undercover agent made contact with Mr. Willis through a drug dealer and fugitive, Derek Orban, who told a confidential informant that Mr. Willis sold firearms.

On Aug. 8, 2019, the agent accompanied the drug dealer and the confidential informant to a residence on Life Avenue, where the undercover purchased three firearms from Mr. Willis. Over the next two weeks, the agent purchased eight additional firearms from Mr. Willis.

During a transaction on Aug. 13, a Texas Department of Public Safety helicopter conducting aerial surveillance recorded Mr. Willis retrieving an assault rifle from a vehicle parked on Life Avenue, then delivering it to the undercover agent and confidential informant.

At Mr. Willis’ sentencing hearing, an agent testified that one of the firearms Mr. Willis sold the undercover was submitted to the National Integrated Ballistic Information Network (NIBIN) and determined to have been the murder weapon used in a homicide that occurred only months earlier.

The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division conducted the investigation with the assistance of the Texas Department of Public Safety and the Irving Police Department. Assistant U.S. Attorneys Abe McGlothin and Cara Pierce (fmr.) prosecuted the case.

A Lubbock man pleaded guilty today to threatening to kill his ex-wife, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Gene Garcia Solis, 48, was charged via criminal complaint in November 2021 and indicted the following month. He pleaded guilty on Monday to interstate threatening communications.

According to plea papers, Mr. Solis admitted that on Nov. 24, 2021 – the day before Thanksgiving – he told a Lubbock police officer that he planned to kill his ex-wife and anyone who tried to stop him and then commit suicide.

Fearing for his ex-wife’s safety, officers set up surveillance at her residence. That evening, at around 10:30 p.m., Mr. Solis drove by the home.

When officers attempted to stop his car, he fled. Nearly three hours later, law enforcement spotted the defendant in Hale Center, Texas, and once again attempted to stop his car. He attempted to flee, but hit a spike strip and crashed in the parking lot of a Texas National Guard Armory.

Mr. Solis exited the vehicle, fired several rounds from an AR 15-style rifle, and ran inside the Armory.  He finally surrendered to law enforcement after about a 30-hours standoff.

He now faces up to five years in federal prison. His sentencing date has not yet been set.

The Federal Bureau of Investigation’s Dallas Field Office, Lubbock Resident Agency, and the Lubbock Police Department conducted the investigation with the assistance of the Hale County Sheriff’s Department, the Lubbock County Sheriff’s Office, and the Texas Department of Public Safety. Assistant U.S. Attorneys Jeff Haag and Callie Woolam are prosecuting the case.

A cocaine trafficker from Tulsa was convicted at trial of drug and gun charges, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

After three days of trial and seven hours of deliberation, a federal jury in Dallas found Roberto Chairez, 33, guilty of one count of attempted possession with intent to distribute a controlled substance and one count of possession of a firearm in furtherance of a drug trafficking crime.

According to evidence presented at trial, in July 2020, Mr. Chairez negotiated the purchase of two kilograms of cocaine with another individual in Dallas in exchange for $58,000 in cash. Later that month, he drove from his home in Tulsa to Dallas to purchase the cocaine, renting a hotel room in Dallas for the night.

The morning of the intended purchase,  he communicated again with the cocaine supplier, and began driving to the drug deal.  On his way there, a Texas Department of Public Safety trooper, working in partnership with the DEA, stopped his car and found $58,000 hidden inside. The trooper also found a high-capacity firearm in Mr. Chairez’s center console.

“Drug trafficking and its frequent companion, drug-related violence, threaten the health and safety of every single one of us,” said Eduardo A. Chávez, Special Agent in Charge of DEA’s Dallas Field Division.  “Mr. Chairez’s conviction holds him directly responsible for his intended actions and has undoubtedly saved lives, with a weapon off the streets and drugs that will never find a life to destroy.”

Mr. Chairez now faces up to life in federal prison. His sentencing date has not yet been set.

The Drug Enforcement Administration’s Dallas Field Office and the Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorneys P.J. Meitl and John Kull prosecuted the case. Chief U.S. District Judge Barbara M.G. Lynn presided over trial.

 

Two Amarillo men who defrauded a manufacturer of cattle feed supplements out of more than $474,000 pleaded guilty today to wire fraud, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham. 

Philip Ian Thomas, 41, and Hadley Lane Jones, 30, pleaded guilty Wednesday to conspiracy to commit wire fraud.

In plea papers, the pair admitted they defrauded Westway Feed Products, LLC, a North American liquid feed supplement company.

The company hired Mr. Thomas to manage its Dimmitt, Texas plant in October 2014, giving him discretion to approve repair and maintenance projects costing up to $3,000.

Two years later, Mr. Thomas and Mr. Jones concocted a scheme in which Mr. Thomas would create and approve fraudulent invoices for work Mr. Jones purportedly – but did not actually – perform.

In November 2016, Mr. Thomas instructed Westway’s accounting department to add Mr. Jones as an approved contractor. He then created two invoices for welding he said Mr. Jones had performed, one for $1,490 and another for $1,200.

Despite knowing that Mr. Jones had performed only one project listed on the first invoice, a welding job itemized at $495, Mr. Thomas stamped and signed the contracts. Westway’s accounting department then paid the invoices. When the $2,690 transfer reached Mr. Jones’ bank account, he immediately withdrew $2,000 and gave it to Mr. Thomas. 

The pair continued the scheme into March 2020, repeatedly submitting fraudulent invoices to the Westway’s accounting department, which the company paid to Mr. Jones, who split the cash with Mr. Thomas.

To further the fraudulent scheme, Mr. Jones even created a sham business, “Elite Welding Service,” to make the invoices appear more legitimate.

In total, Mr. Thomas fabricated hundreds of fictitious invoices detailing jobs Mr. Jones purportedly performed, inducing his employer to pay Mr. Jones more than $474,429. With the exception of one $5,000 invoice, Mr. Thomas set all of the invoices at or below the $3,000 approval limit, thus avoiding scrutiny by upper level management.

Both Mr. Thomas and Mr. Jones now face up to 20 years in federal prison. Their sentencing date has not yet been set.

The U.S. Secret Service’s Lubbock Resident Office, conducted the investigation. Assistant U.S. Attorney Ann Howey prosecuted the case.

A 72 year-old El Paso man was found guilty of attempted bank robbery on Tuesday, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

After two days of trial and just two hours of deliberation, a federal jury in Lubbock convicted James Earl Green, Jr. of attempted bank robbery.

According to evidence presented at trial, at approximately 7:40 a.m. on Sept. 24, 2019, Mr. Green accosted a First State Bank employee as she was attempting to enter the bank for opening.

Mr. Green held a handgun to the employee’s head and pushed her inside the bank, where he held her for approximately 20 minutes. During that time, surveillance video caught the defendant on camera pacing back and forth with an identifiable limp.

A second bank employee arrived at 7:57 a.m., and a struggle ensued. (Download surveillance footage here.) During the melee, Mr. Green struck the first employee on the head with his handgun. He then fled on foot without obtaining any money, leaving his two duffel bags behind.

An anonymous tipster notified the Abilene Police Department that a gold Cadillac had been parked across the street from the bank the morning before the robbery. Law enforcement then identified the Cadillac – a four door sedan with its front right hub cap cover missing – in surveillance video pulled from the bank’s vicinity. An employee of the City of Abilene narrowed down gold Cadillacs from a list of more than 11,000 to locate a matching gold Cadillac belonging to Mr. Green.  

After learning that Mr. Green lived in El Paso, officers reached out to an individual there that knew him, who reviewed the bank surveillance video and noted that the robber in the video walked in a similar manner to Mr. Green, who wore a prosthetic leg. She also shared a photo of Mr. Green’s Cadillac, which was gold and missing its front right hub cap cover.

Meanwhile, the Texas Department of Public Safety’s Crime Lab extracted a DNA profile from the duffel bag, ran it through the FBI’s Combined DNA Index System (CODIS), and found a match to a sample from Mr. Green.  Additionally, a member of the FBI’s Cellular Analysis Survey Team obtained historical cell phone data from Mr. Green’s cell phone provider and placed Mr. Green’s cell phone traveling to Abilene from El Paso days before the attempted bank robbery and returning from Abilene to El Paso immediately following the attempted robbery.

Mr. Green now faces up to 20 years in federal prison. His sentencing has been set for July 21.

The Abilene Police Department, the Federal Bureau of Investigation’s Dallas and El Paso Field Offices, and the Texas Department of Public Safety’s Crime Laboratory conducted the investigation. Assistant U.S. Attorneys Callie Woolam and Ryan Redd tried the case. U.S. District Judge James Wesley Hendrix presided over the trial.

The owner of a medical consulting company was sentenced today to two years in federal prison for defrauding health insurers, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Steven Berglund, the 52-year-old owner of Elite Healthcare, pleaded guilty to conspiracy to commit wire fraud and healthcare fraud on Nov. 10, 2021 – three days into his criminal trial. He later attempted to withdraw his plea, arguing that the stress of the trial had left him with diminished mental capacity. The court rejected his attempts, ruling that Mr. Berglund had understood his plea and entered it knowingly and voluntarily. He was sentenced Tuesday by U.S. Senior District Judge Terry Means.

At his trial, the government had introduced evidence showing that Mr. Berglund had organized and led an elaborate “pass-through billing” scheme in which health insurers were deceived into paying Palo Pinto General Hospital for laboratory tests were actually performed by out-of-network laboratories. (Due to its status as a rural hospital, Palo Pinto was often able to receive higher reimbursements than urban hospitals or out-of-network labs.)

The evidence also showed that Mr. Berglund and his coconspirators used an overseas company to conduct the fraudulent billing, and used front companies to pay kickbacks to induce doctors to order more laboratory tests.

In plea papers, Mr. Berglund admitted to the scheme.

According to court documents, Mr. Berglund and other members of the conspiracy submitted more than $54 million in laboratory services claims; as a result, insurers paid Palo Pinto more than $8 million. After paying the out-of-network labs, the billing company involved in the scheme, and kickbacks, the coconspirators divvied up rest of the proceeds.

Four of Mr. Berglund’s coconspirators were previously sentenced:

• Aaron Cerpanya, co-owner of Elite, pleaded guilty to conspiracy to commit healthcare fraud and was sentenced to 12 months + one day in prison.
   
• Adam Gardner, co-founder of MedHealth Solutions, also pleaded guilty to conspiracy to commit healthcare fraud and was sentenced to 12 months + one day in prison.
   
• Cody Waddell, co-founder of MedHealth Solutions, pleaded guilty to conspiracy to commit healthcare fraud and was sentenced to 18 months in prison.
   
• Harris Brooks, former CEO of Palo Pinto, pleaded guilty to conspiracy to commit healthcare fraud and was sentenced to five years’ probation.

 

The court ordered all five defendants jointly and severally liable for $2.4 million in restitution.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Matt Weybrecht, Mark Nichols, and Megan Fahey (fmr) prosecuted the case.

 

Three drug traffickers who attempted to run a sheriff’s office vehicle off the road have been sentenced to a combined 48 years in federal prison, announce U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Kyle Willeke, 31, pleaded guilty in November 2021 to possession with intent to distribute methamphetamine and was sentenced Thursday by U.S. District Judge Matthew Kacsmaryk to 20 years in federal prison. His coconspirator, Ricardo Rodriguez, 35, pleaded guilty to the same charge and was sentenced on Wednesday to 20 years in federal prison. Monique Derau, 26, pleaded guilty in November 2021 to conspiracy to distribute methamphetamine and misprison of a felony and was sentenced Wednesday to eight years in federal prison. 

According to plea papers, on Aug. 19, 2021, a Potter County Sheriff’s Office deputy attempted to pull over a Toyota Rav4 for a traffic violation. The deputy activated his lights, but a Nissan Infiniti struck his patrol car, causing the vehicle to spin out of control. Both the Rav4 and the Infiniti continued without stopping following the collision.

Law enforcement later identified the diver of the Rav4 as Ricardo Rodriguez, the driver of the Infiniti as Monique Derau, and the passenger who grabbed the wheel of the Infiniti to strike the deputy’s vehicle as Kyle Willeke.

Officers traced Ms. Derau’s phone and located her traveling east on Interstate 40 in a rental car. They stopped the vehicle, which at that point was carrying Ms. Derau, Mr. Rodriguez, and Mr. Willeke.

During a safety sweep of Ms. Derau’s rental, they found a box containing seven bags of methamphetamine weighing approximately 7.57 kilograms. Ms. Derau later told HSI agents that the drugs belonged to Mr. Rodriguez and Mr. Willeke. When asked about their travel plans, she changed her story several times.

Homeland Security Investigations’ Dallas Field Division and the Potter County Sheriff’s Office conducted the investigation with the assistance of the Drug Enforcement Administration’s South Central Laboratory. Assistant U.S. Attorney Josh Fausto prosecuted the case.

A former Dallas police officer was sentenced Thursday evening to 30 months in federal prison for lying to federal agents about his role in obstructing an FBI investigation into a nightclub magnate later convicted of a massive drug conspiracy, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Eddie Villarreal, 53, pleaded guilty in January 2018 to making a false statement to the FBI. He was sentenced Thursday by U.S. District Judge Sam A. Lindsay, who ordered him to pay a fine of $10,000.

“This is not what a police officer is supposed to do. It is the opposite,” Judge Lindsay remarked at sentencing. “When that trust is broken, a police officer must be held accountable, that’s the bottom line.”

According to his plea papers, during his tenure as a Dallas police officer, Mr. Villarreal also served as head of security for Alfredo Hinojosa, the owner of a string of nightclubs including Ok Corral and Far West, and routinely assisted Mr. Hinojosa and his employees with criminal matters. 

On April 14, 2014, Mr. Villarreal admitted, he answered a call from club promoter Martin “Chava” Rodriguez, who informed Mr. Villarreal that he suspected he was being followed by law enforcement. (In fact, he was being tailed by FBI.) Mr. Villarreal instructed Mr. Rodriguez to pull over, then drove out to meet him.

Upon arriving, Mr. Villarreal pulled up behind the FBI vehicle and activated his red and blue emergency lights. After confirming the vehicle’s occupants were FBI agents, he introduced himself as a DPD officer and offered to help them with their investigation into Mr. Rodriguez. In reality, Mr. Villarreal later admitted, he never intended to assist the FBI, but rather wanted to learn more about the investigations in order to pass the information along to Mr. Hinojosa, Mr. Rodriguez, and others.

Shortly thereafter, Mr. Villarreal called one of the agents and provided information about a target who he said was dealing cocaine out of nightclub bathrooms. He later admitted that he did so in order to deflect attention from Mr. Hinojosa.

The following day, FBI agents called Mr. Villarreal to advise him of a grand jury investigation into Mr. Rodriguez and others. 

Subsequent to that conversation, Mr. Villarreal admitted, he visited Mr. Hinojosa at his office and informed him of the investigation and its targets, telling Mr. Hinojosa, “you got detectives that don’t know anything about you… I can get in trouble if they think I’m warning you.”  Upon learning that the FBI might be surveilling his nightclubs, Mr. Hinojosa said he wanted to “tighten down” on drug sales in club bathrooms.

On May 7, 2015, FBI agents reached out to Mr. Villarreal to ask if he had informed anyone of the Rodriguez stop or grand jury investigation. Mr. Villarreal denied any such disclosures.

He resigned from the police department five months later, in October 2015.

“By alerting his clients to an ongoing investigation, Mr. Villarreal undermined the hard work of his law enforcement colleagues and sullied his badge,” said U.S. Attorney Chad Meacham. “He took an oath to serve and protect – and promptly did the opposite. The Justice Department will not allow this kind of misconduct to go unpunished.”

“The public expects police officers to be honest, trustworthy, and to prioritize protecting their community from dangerous individuals. The defendant not only failed to protect his community, but also lied to a fellow law enforcement officer. He provided sensitive information that could have jeopardized the outcome of a criminal investigation. The FBI and our law enforcement partners will hold accountable any officer that breaks the law and endangers the lives of others,” said FBI Dallas Special Agent in Charge Matthew DeSarno.

Mr. Hinojosa and Mr. Rodriguez were later convicted at trial of managing drug premises, conspiracy to manage drug premises, and conspiracy to possess with intent to distribute cocaine. Multiple witnesses testified that the pair knew drug trafficking was occurring on their premises and openly ordered security personnel to allow it. Mr. Hinojosa and Mr. Rodriguez are now facing up to life in federal prison. Their sentencing has been set for June 3 and July 22, respectively.

More than 30 defendants – including Mr. Villarreal’s former DPD colleague, Craig Woods – have been convicted in connection with the case.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation, dubbed “Operation Closing Time,” with the assistance of the Dallas Police Department. The Texas Alcoholic Beverage Commission's Enforcement Division provided valuable assistance. Assistant U.S. Attorneys P.J. Meitl, Errin Martin, Nicole Dana, and Melanie Smith prosecuted the case.

The perpetrators of a $1.5 million Apple gift card scheme have been sentenced to a combined eight years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham. 

Syed Ali, 29, and his co-conspirator, Jason Tout-Puissant, 27, both pleaded guilty to wire fraud in 2019. Mr. Ali was sentenced in October 2021 by U.S. District Judge David Godbey to 37 months in federal prison; Mr. Tout-Puissant was sentenced today by the same judge to 60 months in federal prison and ordered to pay $1.26 million in restitution to Apple.  

According to plea papers, Mr. Tout-Puissant admitted that he stole multiple Apple point-of-sale devices – nicknamed “Isaacs” – from an Apple store in Southlake, Texas, then sat outside the store, logged onto the store’s wifi network, and loaded thousands of dollars of fraudulent store credits onto gift cards.

He then loaded the giftcards onto Apple Passbook, an application that generates QR codes for the value of gift cards, and sent screenshots of those codes to Mr. Ali.

In his plea papers, Mr. Ali admitted that he and an unindicted coconspirator used those QR codes to purchase thousands of dollars’ worth of Apple products from brick-and-mortar retail stores in New York.

According to the indictment, the conspiracy involved more than $1.5 million in fraudulently obtained Apple gift cards.

“If these defendants thought their million-dollar fraud would go unnoticed simply because they targeted a trillion-dollar company, they were sorely mistaken,” said U.S. Attorney Chad Meacham. “The Justice Department will not tolerate fraud against any company, be it a multinational corporation or a mom-and-pop operation. We are grateful to our FBI partners for their work on this case.”

 “The FBI is committed to tackling fraud schemes from every angle, and today the defendants will now be held accountable,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “This carefully orchestrated scheme resulted in financial loss for a large corporation, and that fraud also victimizes American consumers.”

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. The New York Field Office assisted with Mr. Ali’s arrest. Assistant U.S. Attorney Sid Mody prosecuted the case. 

An Albuquerque man suspected of committing a string of bank robberies across Texas, Arizona, New Mexico, Mississippi, and California has been federally charged, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Fernando Enriquez, 35, was charged via criminal complaint on Wednesday with one count of bank robbery. He made his initial appearance Thursday afternoon before U.S. Magistrate Judge John R. Parker.

According to the complaint, on Tuesday, Mr. Enriquez allegedly entered a Chase Bank in Abilene, Texas, brandished a firearm, demanded cash from the teller, and then fled the scene.

The teller, who activated her silent alarm during the robbery, later described the suspect as a heavy-set Hispanic man wearing a face mask, grey hoodie, jeans, and a baseball cap.

A witness who was inside the bank during the incident used his phone to record video footage of the suspect exiting the bank and entering a white Chevrolet suburban bearing Mississippi license plates. He immediately turned the video over to law enforcement.

Forty-five minutes later, Texas DPS and Abilene Police Department officers pulled over the suburban in Merkel, Texas and detained Mr. Enriquez and his girlfriend, Crystal Quispe. Inside the vehicle, officers found a firearm, a gray hoodie, baseball cap, and a significant sum of U.S. currency.

Law enforcement transported Mr. Enriquez and Ms. Quispe to the Abilene Police Department, where Ms. Quispe told FBI agents that over the past 14 months, she and Mr. Enriquez have lived in Arizona, Mississippi, New Mexico, and California. She stated that though Mr. Enriquez was not employed most of that time, he always seemed to have cash on hand.

She told officers that prior to the robbery, Mr. Enriquez left her and his children at a motel, stating he had to fill the car with gas. When he returned, she said, he rushed to get the vehicle loaded and leave. She described Mr. Enriquez’s driving during their departure from Abilene as faster and more erratic than usual.

Based on physical description and the modus operandi, investigators believed that the suspect who committed the Abilene robbery may have committed similar robberies in Arizona, Mississippi, New Mexico, and California. They showed Ms. Quispe two photographs from the other bank robberies, both provided by FBI Phoenix. Ms. Quispe identified the man in the photographs as Mr. Enriquez.

A criminal complaint is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Enriquez is presumed innocent until proven guilty in a court of law. (Ms. Quispe has not been charged with any crimes.)

If convicted, Mr. Enriquez faces up to 25 years in federal prison.

The Federal Bureau of Investigations’ Phoenix and Dallas Field Offices conducted the investigation with the assistance of the Texas Department of Public Safety, the Abilene Police Department, and the Taylor County Sheriff’s Office. Assistant U.S. Attorney Matthew Tusing of the Northern District of Texas is prosecuting the case with significant support from the U.S. Attorney’s Office in the District of Arizona.

A former Perryton police officer was sentenced Thursday to 17 years in federal prison for child pornography offenses, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Aaron Bennett Daugherty, 36, pleaded guilty in July to transportation of child pornography. He was sentenced by U.S. District Judge Matthew J. Kacsmaryk, who also ordered a lifetime of supervised release following completion of the sentence.

According to plea papers, Mr. Daugherty was nabbed in an undercover FBI investigation into individuals using Kik, a social media app popular among teenagers, to share explicit images of children.

On June 9 2020, a Kik user with an obscene screenname – later identified as Mr. Daugherty – shared a video file depicting an adult male engaged in sexual acts with a blindfolded prepubescent child.

“I’m here to look at CP, everybody,” the user posted two weeks later. “Go on with the CP content!”

Law enforcement later contacted Mr. Daugherty at the Perryton Police Department. He admitted that he used Kik to view and share child pornography, adding that child porn did not “bother” him.

The Federal Bureau of Investigation’s Dallas Field Office – Amarillo Resident Agency, the Texas Rangers, and the Winnebago County Sheriff’s Office conducted the investigation with the full cooperation of the Perryton Police Department. Assistant U.S. Attorney Joshua Frausto is prosecuting the case.

An Illinois man was convicted at trial of running a multi-million dollar retail crime ring, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

After four days of trial, a federal jury found Artur Gilowski, 48, of Barrington, IL, guilty of conspiracy to commit interstate transportation of stolen property and conspiracy to commit mail fraud. The defendant was ordered detained immediately after the verdict was read on Thursday.

According to evidence presented at trial, Mr. Gilowski’s coconspirators stole tens of thousands of products – valued at over $20 million – from brick-and-mortar retail stores across the United States, then shipped them to Mr. Gilowski, who sold the stolen goods on various e-commerce websites, generating more than $11 million in profits.

The thieves traveled across the country in vehicles registered under false names and used “booster skirts” (garments with concealment pouches for stolen goods) and electronic transmitters designed to disrupt retailers’ anti-theft and loss-prevention measures. Using aliases, they rented storage lockers where they kept the stolen items until they could be shipped to interstate and foreign customers via the U.S. Postal Service, UPS, and FedEx. 

Mr. Gilowski created a network of numerous online seller profiles, multiple bank accounts, and various companies registered in other people’s names to conduct the unlawful online sale scheme and funnel the proceeds of his illicit operation to himself. 

The evidence also showed that Mr. Gilowski received over a million dollars in cash from his crime ring – including $97,000 that was found in the center console of Mr. Gilowski’s truck – which led one of Mr. Gilowski’s coconspirators to testify at trial that Mr. Gilowski “treated money like trash.”

“Mr. Gilowski and his coconspirators swiped thousands of products from retail shelves, then resold stolen goods online,” said U.S. Attorney Chad Meacham. “We are proud to hold these defendants accountable for their crimes, and are grateful to the jury for their careful consideration of our case.”

“Organized retail crime leads to consumers having to pay higher prices for goods, fewer job openings, and a decrease in consumer spending on legitimate goods that small-business owners and other retailers depend on for survival,” said acting Special Agent in Charge Christopher Miller, HSI Dallas. “Working alongside the U. S. Attorney’s Office, U.S. Postal Inspection Service and Arlington Heights (Illinois) Police Department, we were able to secure today’s conviction, and take another step in our ongoing fight against organized retail crime so consumers and retailers don’t have to bear the brunt of those impacts.”

Five of Mr. Gilowski’s coconspirators pleaded guilty prior to trial.

Mr. Gilowski now faces up to 25 years in federal prison. He is set for sentencing on August 2.

The Arlington Heights Police Department in Illinois conducted the investigation with assistance from Homeland Security Investigations’ Dallas Field Office and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Fabio Leonardi and Camille Sparks prosecuted the case. Chief U.S. District Judge Barbara M.G. Lynn presided over the trial.

Twelve alleged drug traffickers were arrested Wednesday in Operation Tormenta De Arena (“Sandstorm”), announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

During the bust in Lubbock, Brownfield, and Lamesa, DEA agents and their law enforcement partners also seized roughly 27 pounds of suspected methamphetamine, U.S. currency, and two firearms, including one that had been stolen.

Ten of the defendants were charged in a 12-count indictment unsealed today. Those charged in the indictment include:

• Jamey Jimenez, aka “Shorty,” charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Celia Zurita, charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Alfred Miranda, charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Rorigo Gonzales-Gonzales, aka “Canelo,” charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Patricia Renee Guerrero (née Lopez), charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Christina Fuentes, charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Jessica Moreno, charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Amanda Uresti Salgado, charged with conspiracy to distribute methamphetamine and distribution and possession with intent to distribute methamphetamine
• Lauren Mackenzie Helbert (née McCarroll), charged with conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine
• Christopher Matthew Vasquez, aka “Peeps,” charged with conspiracy to distribute methamphetamine

Another two were charged via criminal complaint.

“Methamphetamine trafficking penetrates every aspect of our society and threatens the safety of our neighborhoods,” said Eduardo A. Chávez, Special Agent in Charge of the DEA Dallas Field Division, which oversees operations in Lubbock. “DEA Lubbock and our law enforcement partners are committed to identifying and destroying the networks and criminal organizations who distribute this poison throughout La Mesa and Terry counties, and the overall greater Lubbock area.”

Defendants’ initial appearances will begin Thursday, March 31 at 1:30 p.m. in Lubbock.

An indictment is merely an allegation of criminal conduct, not evidence. All defendants are presumed innocent until proven guilty in a court of law.

If convicted, some defendants face up to life in federal prison; others face up to 20 years.

The operation was the result of the hard work of the Caprock HIDTA (High-Intensity Drug Trafficking Area) Task Force. The Drug Enforcement Administration’s Dallas Field Division – Lubbock Resident Office and Caprock HIDTA led the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms, & Explosives’ Dallas Field Division, Homeland Security Investigations, Texas Department of Public Safety, Lubbock County Sheriff’s Office, Dawson County Sheriff’s Office, Terry County Sheriff’s Office, Lubbock Police Department, Brownfield Police Department, Lamesa Police Department, and the Texas Anti-Gang Unit. Assistant U.S. Attorneys Jeffrey R. Haag and Stephen J. Rancourt are prosecuting the case.

A Wichita Falls man who called in fake bomb threats was sentenced today to two years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Tommy Jay Hollis, 27, pleaded guilty in December 2021 to one count of making a hoax bomb threat. He was sentenced Friday by U.S. District Judge Reed C. O’Connor.

According to plea papers, Mr. Hollis admitted that posing as a friend, he submitted the bomb threat to the FBI National Threat Operations Center (NTOC) via tips.fbi.gov.

“I’m planning on bombing the downtown Wichita Falls,” he wrote in the tip, which was submitted on Aug. 30, 2021.

In an interview with law enforcement, Mr. Hollis admitted that he made the threat from an email account he created in his friend’s name in an attempt to cause law enforcement to arrest the friend. He claimed he did not intend to carry out an attack.

“Making threats to prompt a law enforcement response is dangerous and instills fear throughout the community,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “The FBI is proud to work with our partners at the Wichita Falls Police Department and the U.S. Attorney’s Office to ensure that defendants like Mr. Hollis are held fully accountable for their actions.”

According to court documents, Mr. Hollis had a history of making threats in other people’s names.

Posting as another friend, he reported to the NTOC that he was allowing a two-year-old to play with loaded firearms.

“He is my son I beat him with my hand and rape him too,” he said in the tip, submitted on July 26, 2021.

A welfare check on the child in question revealed no firearms or visible injuries.

Several weeks later, Mr. Hollis, posing as that same friend, reported to a local principal that he planned to attack his school.

“I’m letting you know I plan on attacking your school,” he wrote in the tip, submitted on Aug. 16, 2021. “Please if you care about the kids and the little girls you will report immediately I need to be locked up.”

Based on the hoax threat, the Burkburnett ISD Police Department added extra officers to protect every school in the district for the next two days.

The Federal Bureau of Investigation’s Dallas Field Office – Wichita Falls Resident Agency conducted the investigation with the assistance of the Wichita Falls Police Department. Assistant U.S. Attorneys Joseph Lo Galbo, Jay Weimer, and Taylor Winn prosecuted the case.

San Angelo’s former Chief of Police has been convicted of accepting bribes, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

After a three-day trial and about seven hours of deliberation, a federal jury found Timothy Ray Vasquez, 52, guilty of one count of receipt of a bribe by an agent of an organization receiving federal funds and three counts of honest services mail fraud.  Mr. Vasquez – who was elected Chief of Police in 2004, then reelected in 2008 and 2012 – was first indicted in January 2020. 

“Law enforcement officers, particularly those in leadership positions, should be bastions of integrity. By accepting bribes, Mr. Vasquez defiled his badge,” said U.S. Attorney Chad Meacham. “The Justice Department is determined to root out public corruption wherever we find it. Our citizens deserve honest public servants.”

“Mr. Vasquez will now be held accountable for using his official position for financial gain at the expense of the residents of San Angelo. Each act of greed and dishonor affected fundamental aspects of the government processes and procedures that were designed to benefit the people they serve,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “Our communities should not have to question the integrity and trust of public officials, and today’s verdict is a step in restoring that confidence.”

According to evidence presented at trial, Mr. Vasquez used his official position to help Dailey & Wells Communications, Inc., a radio system vendor, land a $5.7-million-dollar contract with the City of San Angelo, Texas. In return, Dailey & Wells and its affiliates funneled Mr. Vasquez and his band, “Funky Munky,” more than $175,000. Dailey & Wells and its affiliates also provided him tickets for luxury suites at Dallas Cowboys and San Antonio Spurs games, tickets for a luxury suite at Journey concert, and free use of a luxury condominium at Alteza Condos in San Antonio.

Mr. Vasquez never disclosed to the City of San Angelo or the City Council that he had a business relationship with Dailey & Wells. The Texas Local Government Code, the City of San Angelo Employee Manual, and the San Angelo Purchasing Policy Manual all required Mr. Vasquez to disclose this relationship.

In February 2007, the City of San Angelo solicited bids for a new radio system for first responders, including the police department. In April, a committee recommended the city award the $5.6 million contract to Dailey & Wells, which was eventually selected for the contract.

Three months later, in July, Juniper Valley, L.P., an affiliate of Dailey & Wells, cut a $10,000 check to “Funky Munky Band.” Mr. Vasquez deposited the funds into his personal checking account.  For the next eight years, Mr. Vasquez received yearly payments of approximately $8,000 from Dailey & Wells or its affiliates, Buster & Buddy and Trixie & Fini, either made out to Mr. Vasquez or his band. Testimony at trial revealed that Funky Munky’s average fee to play at an event was about $2,000. By June 2, 2015, Mr. Vasquez and Funky Munky had collected more than $84,000.

In 2014 and 2015, Dailey & Wells contacted the City of San Angelo about updating its radio system from a proprietary EDACS system, which was in the process of being phased out, to a P25 Phase II system.  When the City’s IT Manager told Mr. Vasquez of the estimated cost of $6 million dollars and that it would have to go through the bidding process, Mr. Vasquez told the IT Manager they were not going through the bidding process and were going to continue to use Dailey & Wells. Mr. Vasquez suggested that the IT Manager use a public safety exception to avoid the bidding process and the IT Manager agreed. Ultimately, a purchasing cooperative was used to purchase the Dailey & Wells system.

Mr. Vasquez contacted a San Angelo City Councilmember and lobbied her to place the Dailey & Wells contract on the City Council’s agenda.  Mr. Vasquez advocated for the Dailey & Wells contract before the City Council on December 16, 2014, and June 2, 2015.

Six people who were city council members at the time testified that Mr. Vasquez had significant influence with the City Council and it relied upon his advice in public safety matters. All six stated that they did not know Mr. Vasquez had a business relationship with Dailey & Wells before the vote on June 2, 2015. Five of those former city council members testified that if they had known that fact they would have voted against awarding the contract to Dailey & Wells. Two of the former city council members stated that if they had known of the payments then they would have disqualified Dailey & Wells from being a radio vendor to the city.

Following a presentation made by then-Chief Vasquez and another employee, San Angelo awarded a new $5.7 million contract to Dailey & Wells in late 2015. 

In November 2016, Mr. Vasquez became aware that he was under investigation for the radio contract with Dailey & Wells. About one month later, Dailey & Wells wrote a $50,000 retainer check to “Funky Munky,” noting “Timothy R. Vasquez” in the check’s memo section. A few days later, Mr. Vasquez endorsed the $50,000 check and deposited the entire amount into his personal bank account.

In total, Mr. Vasquez, through Funky Munky, received at least $175,000 from Dailey & Wells and its affiliates. 

The defendant was remanded to the custody of the U.S. Marshals Service after the verdict. Mr. Vasquez faces up to 70 years in federal person.

The Federal Bureau of Investigation, the Tom Green County Sheriff’s Office, and the Texas Rangers conducted the investigation with the full cooperation of the San Angelo Police Department and the City of San Angelo.  Assistant U.S. Attorneys Jeff Haag, Sean Long, and Juanita Fielden are prosecuting the case.

An Arlington physician has been sentenced to 12 years in federal prison for fraud and drug crimes, announced U.S. Attorney for the Northern District of Texas Chad Meacham.

In July 2021, a federal jury convicted physician Clinton Battle, 69, of one count of conspiracy to distribute controlled substances and one count of distribution of a controlled substance. In a separate proceeding later that month, the defendant pleaded guilty to conspiracy to commit mail fraud. He was sentenced Thursday by U.S. District Judge Mark Pittman, who also ordered him to pay $376,368 in restitution.

According to evidence presented at trial,  Dr. Battle routinely issued prescriptions for controlled substances – including hydrocodone, alprazolam, acetaminophen with codeine, tramadol, and phentermine – outside the usual course of professional practice and without a legitimate medical purpose. At times, he issued prescriptions for controlled substances without conducting any medical examination at all, sometimes telling office staff to issue prescriptions for whichever controlled substance the patient wanted. He also issued prescriptions for friends or family members with whom he had no physician-patient relationship.

At trial, one of Dr. Battle’s former employees testified that she, her husband, and Dr. Battle agreed that Dr. Battle would provide the employee’s husband with illegal controlled substance prescriptions in exchange for cocaine.

In addition to cocaine, the evidence also showed that Dr. Battle would receive money in the form of fees paid by “patients” of $200 for an initial visit and $80 for return visits in exchange for controlled substance prescriptions.

Dr. Battle also allowed his nurse practitioner, coconspirator Donna Green, to use his DEA registration number and medical credentials to issue prescriptions for controlled substances, despite knowing that Ms. Green was not legally authorized to issue such prescriptions. (On the morning trial was set to begin, Ms. Green pled guilty to one count of acquiring a controlled substance through fraud.)

Throughout the course of the five-year conspiracy, Dr. Battle issued more than 50,000 controlled substance prescriptions, 17,000 of which were for the powerful opioid hydrocodone.

“Dealers of illegal drugs come in many forms.  This is a case of the abuse of trust and position,” said DEA Special Agent in Charge Eduardo A. Chávez. “Dr. Battle and his co-conspirators used their authority to push pills into our neighborhoods disregarding the inherent harm they cause.  DEA’s teamwork with our federal and local area law enforcement agencies make it possible to pursue any person distributing illegal drugs, no matter the disguise.”

Dr. Battle also defrauded worker’s compensation and health insurers by conspiring to submit claims for functional capacity evaluations (FCEs) that he claimed he himself administered over the course of several hours, according to his plea papers. In reality, his unlicensed assistants administered the evaluations, which took significantly less time than he claimed. In addition, Dr. Battle billed for physical therapy sessions that were conducted by unlicensed assistants or, at times, not conducted at all. He and his coconspirators also “upcoded” by billing for higher reimbursement levels than were authorized for the level of examination they performed.

The Drug Enforcement Administration’s Dallas Field Division, the U.S. Department of Labor, the U.S. Postal Service Office of Inspector General, IRS – Criminal Investigations, and the Texas Department of Insurance conducted the investigation. Assistant U.S. Attorneys Matthew Weybrecht and Jay Weimer are prosecuting the case with the help of their appellate liaison, Assistant U.S. Attorney Leigha Simonton.

A Fort Worth man who allegedly sold fake Percocet pills laced with fentanyl has been charged with a federal drug crime, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Troy Wright, 40, was indicted on three counts of possession with intent to distribute fentanyl. He made his initial appearance before U.S. Magistrate Judge Rebecca Rutherford after a criminal complaint was filed against him earlier this month.

“Mr. Wright demonstrated his wanton disregard for the lives of his neighbors and their children when he allegedly pushed onto the streets large numbers of counterfeit pills containing fentanyl,” said Eduardo A. Chávez, Special Agent in Charge of DEA Dallas. “DEA and its local law enforcement partners will continue to improve the safety of our neighborhoods by working together to remove dangerous illegal drugs from our streets and hold accountable those who make these drugs available.”

According to court documents, a confidential source told DEA agents that Mr. Wright, aka “Roy,” had contacted him regarding sale of the fake pills.

At the agents’ direction, the source ordered 200 pills for $8 apiece. He and Mr. Wright met outside a hardware store in Irving, where Mr. Wright allegedly handed over the pills in exchange for $1,600. (Agents then confiscated the pills from the source.)

Two weeks later, the source ordered 400 pills for $7 apiece. Agents followed Mr. Wright from his home in Fort Worth to a discount clothing store in Hurst, Texas, where Mr. Wright allegedly gave the source the pills in exchange for $2,800. (Agents again confiscated the pills from the source.)

Immediately after the transaction, the source texted Mr. Wright asking to purchase additional pills.

“Picking my kids up from school we can meet up after 4 I can be headed your way,” the defendant responded.

An indictment is merely an allegations of criminal conduct, not evidence. Like all defendants, Mr. Wright is presumed innocent until proven guilty in a court of law.

If convicted, he faces 20 years on each count for a total of up to 60 years in federal prison.

The Drug Enforcement Administration’s Dallas Field Division conducted the investigation with the assistance of Texas Department of Public Safety. Assistant U.S. Attorney Suzanna Etessam is prosecuting the case.

An Irving man who carjacked a woman at gunpoint was sentenced this week to 14 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Markus DeWayne Vine, 28, pleaded guilty in May 2021 to carjacking and brandishing a firearm during a crime of violence. He was sentenced Tuesday by Chief U.S. District Judge Barbara M.G. Lynn.  

According to plea papers, Mr. Vine admitted that on Aug. 20, 2020, he carjacked a woman entering her Toyota Highlander outside a grocery store in Irving.

When the victim noticed him approaching, she attempted to get into her vehicle and lock the doors. Mr. Vine, however, pointed a 9mm pistol at her head and demanded she exit the vehicle. She complied, and he drove away.

Mr. Vine then drove the car to a nearby gas station, where pointed the pistol at the clerk and fled with the money from the cash register. Roughly 15 minutes later, he drove to another gas station, pointed the pistol at that clerk, and made off with even more cash.

He was arrested two days later entering the stolen vehicle, which was parked at an Irving apartment complex. Police recovered the pistol from inside an apartment where he’d been staying.

After his arrest, Mr. Vine claimed the pistol was inoperable. Task Force officers inspected the firearm and determined that while the pistol appeared to be missing parts in both the trigger and firing pin assemblies, it qualified as a firearm under federal law.

“Mr. Vine is one of the reasons as to why ATF exists. ATF and our partners, like the Irving Police Department, are dedicated to taking the worst of the worst off of our streets. He was the definition of a menace to society: a carjacking followed by a gas station robbery. We are safer with him behind bars,” stated ATF Dallas Special Agent in Charge Jeffrey C Boshek II. 

The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division and the Irving Police Department conducted the investigation. Assistant U.S. Attorney Brian McKay prosecuted the case.

Today, United States Attorney Chad E. Meacham presented the Organized Crime Drug Enforcement Task Forces National Award for Significant Contribution to Public Safety and Security to prosecutors and agents who worked Operation Celtic Cobra.

Celtic Cobra, which lasted from 2011 to 2019, led to the indictment of 60 individuals who trafficked drugs and laundered money for a number of drug cartels, including La Familia Drug Cartel, Los Caballeros Templarios, Cartel Nueva Generación de Jalisco, Los Zetas Cartel, Gulf Cartel, Puro Tango Blast Prison Gang, the Aryan Brotherhood of Texas, and Los Paisa’s Prison Gang. 

At one point, undercover agents identified four people who used their positions of employment at the Dallas Fort Worth International Airport to bypass security to smuggle what they believed to be kilogram amounts of methamphetamine onto commercial airlines.  At one point one defendant even agreed to smuggle inert explosives onto cross-country flights.  These four defendants put the flying public at grave risk.

Over the course of the operation, the U.S Attorney’s Office, the Federal Bureau of Investigation’s Dallas Field Office, the Dallas Police Department, and the Internal Revenue Service Criminal Investigation Division seized approximately 50 firearms, $855,513.00 cash, $400,000.00 in real and personal property, 1,025 kilograms of methamphetamine, 12 kilos of cocaine, and 33 kilos of heroin. 

All but three of the 60 defendants were captured; all 57 captured defendants pleaded guilty. One defendant received two life sentences in prison for drug trafficking and several defendants received maximum sentences for money laundering.

Award recipients included: Assistant U.S. Attorney George Leal

Assistant U.S. Attorney John de la Garza

Assistant U.S. Attorney John Kull

FBI Special Agent Robert Benton

FBI Special Agent Joseph Mathews

The OCDETF program was established in 1982 in order to attack and reduce the supply of illegal drugs entering the United States and to diminish violence and other criminal activity associated with the drug trade.  The OCDETF program works with federal, state, and local law enforcement agencies to identify, disrupt, and dismantle, drug traffickers and drug trafficking networks.
 

A 39-year-old man who volunteered to torture a sex trafficking victim for money was sentenced today to 10 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Billie Joe Sanford, of Eustace, Texas, was charged via criminal complaint in November 2020 and indicted the following month. He pleaded guilty in November 2021 to attempted kidnapping and was sentenced today to 10 years’ imprisonment by U.S. District Judge Ada Brown.

According to plea papers, Mr. Sanford admitted that he responded to an online advertisement for a sex trafficking victim who “needs breaking.” Unbeknownst to Mr. Sanford, the ad had been posted by an undercover agent.

“I am willing to help break her into a proper slave,” Mr. Sanford wrote.  

In subsequent messages, he asked for $5,000 a week to brutalize the victim, demanding “complete privacy” without neighbors nearby.

A few weeks later, Mr. Sanford and the undercover agent met in person in Plano, TX.

Posing as the head of a sizable human trafficking ring, the agent told Mr. Sanford he planned to “make a fortune” pimping out the victim, but was concerned by her refusal to engage in commercial sex and her repeated attempts at escape. He stated he had resorted to handcuffing the victim and locking her in a bathroom.

In response, Mr. Sanford bragged that he had “broken” trafficking victims previously and outlined the methods of torture he planned to use: flogging, caging, shock therapy, blaring heavy metal music, whips, and black-out contacts. He explained that while he understood how to cause “excruciating pain,” he would not leave any scars that would affect the victim’s later sale.

“You want someone that when it’s done, if she gets just a smidgen out of line, then you can say, ‘hey, I’m going to call him back,’” he told the agent. “You want her to believe that whenever she leaves her job, if she does not report back to you, she is going back to Bill… I just make sure they understand they never want to experience this again.”

A week later, on Nov. 5, Mr. Sanford and the agent met again in Irving, TX. Mr. Sanford agreed to follow the agent to a nearby location, where a second undercover agent, posing as the victim, sat restrained in the back seat of a vehicle.

When he arrived, Mr. Sanford unloaded a suitcase and bag containing leather restraints, flogs, spurs, and other equipment.

In a subsequent interview with law enforcement, Mr. Sanford said he’d been living the “kink” lifestyle for several years. Asked about the victim he’d offered to break, Mr. Sanford stated he was hard up for money and simply wanted to “help her enjoy life.”

“Tragically, all human trafficking victims endure trauma. But the cruelty this defendant was prepared to inflict is almost unthinkable. We are grateful agents were able to apprehend Mr. Sanford before he could get his hands on a living, breathing young woman,” said U.S. Attorney Chad E. Meacham. “The U.S. Attorney’s Office, in partnership with HSI, will do everything in its power to end the scourge of human trafficking.”

“This sentence is a result of the investigative efforts of the HSI Dallas led, North Texas Trafficking Task Force that was organized to combat the horrific abuses  of human trafficking,” said Christopher Miller, acting Special Agent in Charge HSI Dallas. “We will exhaust all resources to stop the predators who seek to exploit vulnerable individuals through this form of modern-day slavery.” 

Homeland Security Investigations’ Dallas Field Division conducted the investigation with the assistance of the Dallas County Sheriff’s Office, Dallas County District Attorney’s Office Investigator, the Fort Worth Police Department, the Colleyville Police Department, and the Texas Alcoholic Beverage Commission. Assistant U.S. Attorneys Andrew Briggs and Rebekah Ricketts are prosecuting the case.

A Weatogue, Connecticut man who conspired with an IRS officer to con the United States out of $4 million in overdue employment taxes has been sentenced to four years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Carmine Bianco, 49, pleaded guilty in September 2021 to conspiracy to defraud the United States. He was sentenced Tuesday by Senior U.S. District Judge Terry R. Means, who ordered him to pay $4,744,326 in restitution.

According to plea papers, Mr. Bianco admitted that at the suggestion of Sonya Vivar – an IRS revenue officer with whom he was friends – he acquired the assets of three businesses that were delinquent on their employment taxes, including a restaurant, an emergency services medical company, and a rehabilitation center.

In contracts with the business owners, Mr. Bianco pledged to resolve the businesses’ tax liabilities. He did not. Instead, he transferred their assets into newly formed business entities, then continued to operate the businesses under different names without paying the delinquent taxes.

Meanwhile, Ms. Vivar made sure the businesses’ tax cases were assigned to her and used her position to ensure that Bianco’s companies would not have to pay the taxes owed.

Eventually, however, the rehabilitation center case was transferred to another revenue officer, who suspected fraud and referred the case to the U.S. Treasury Inspector General for Tax Administration and  IRS – Criminal Investigations.

When she learned the case had been referred, Ms. Vivar made entries into IRS’s records system indicating Mr. Bianco was not responsible for paying employment taxes to the IRS. She then attempted to conceal her relationship with Mr. Bianco from federal investigators.  

Ms. Vivar pleaded guilty in November 2020 to corrupt endeavor to obstruct or impede the due administration of internal revenue laws and was sentenced in July 2021 to three years in federal prison.

At Friday’s sentencing hearing, the judge found that due to the defendants’ crimes, the IRS lost the opportunity to collect more than $4 million in taxes and ordered restitution.

IRS – Criminal Investigations conducted the investigation. Assistant U.S. Attorneys Jay Weimer and Rob Boudreau prosecuted the case.

A Dallas man who sold at least nine Glock “switches” – devices that convert ordinary semiautomatic pistols into fully automatic machineguns – was sentenced yesterday to four years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Martin Aviña, 34, pleaded guilty in July 2021 to conspiracy to possess unregistered firearms and possession of unregistered firearms. He was sentenced on Monday by U.S. District Judge David C. Godbey, who noted that selling Glock switches into the community was extremely dangerous.

According to plea papers, Mr. Aviña admitted he possessed – and later delivered for sale – at least nine Glock switches, which are classified as machineguns under federal law.

Unlike semiautomatic firearms, machineguns – weapons that can fire more than one round, without manual reloading, by single function of the trigger – are generally unlawful for non-licensed civilians under the National Firearms Act. A pistol equipped with a conversion device (also called an “auto sear”) can fire up to 1200 rounds per minute, a faster rate of fire than the standard M-4 machinegun issued to U.S. military service members.

Glock switches have been linked to gun violence across the country, including the murder of a Houston police officer last fall.

According to court filings, Mr. Aviña and his coconspirators, brothers José Bermudez and Victor Bermudez, sold 20 Glock switches to an undercover agent in four separate transactions. The switches were advertised for sale on Snapchat and sold for up to $900 apiece.

José and Victor Bermudez, who each pleaded guilty to conspiracy to possess unregistered firearms and possession of unregistered firearms, are awaiting sentencing.

“Conversion switches pose a grave threat to public safety,” said U.S. Attorney Chad Meacham. “Quick and easy to install, these devices turn everyday pistols into highly lethal machineguns. While we respect law-abiding citizens’ right to bear firearms, we cannot allow sears to proliferate on the streets of Dallas.”

“Mr. Avina knowingly put machine guns all over the streets of our Dallas neighborhoods. By utilizing social media, these defendants were able to advance their criminal enterprise and put the lives of others at risk. ATF is relentless in its pursuit to investigate and arrest all those involved in the illegal sales of these devices,” stated ATF Dallas Field Division Special Agent in Charge Jeffrey C. Boshek II.

The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Office conducted the investigation with the help of the Dallas Police Department. Assistant U.S. Attorney Rebekah Ricketts is prosecuting the case.

Reagor Dykes Auto Group owner Bart Reagor was sentenced today to 14 years in federal prison for lying to a bank about his company's prospects, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

In October 2021, a  federal jury found Bart Wade Reagor, 55, guilty of making false statements to a bank insured by the FDIC. Mr. Reagor was sentenced today by U.S. District Judge Matthew J. Kacsmaryk, who ordered him to pay $9,378,817.28 in restitution.

At his sentencing hearing, prosecutors introduced into evidence videos of Mr. Reagor berating his employees for not hitting their sales targets.

“You gotta want to win more than you want to live. I do. I [expletive] die to win. I want to win every [expletive] day. Every [expletive] day, every [expletive] deal,” he says in one meeting. (Clip here.)

“Some of you weren’t there because you didn’t sell 20 units… Boo [expletive] hoo. Cry your way to the weak zone. Cry your way to the loser zone. How many times have ya’ll head me crying? I can’t be crying because I got to take care of a lot of [expletive] crybabies... Somebody’s got to be strong, somebody’s got to be consistent, and somebody’s got to be a [expletive] leader. I chose me,” he said in another “Come on up to the front, come on up to the beast feast, come on up to the millionaire zone, come on up to the jet-flying, private jet-owning, gator-wearing, Rolex-wearing club. Come on up! It’s a choice you gotta make! Or you can cry your way to sleep with all the other [expletive] losers.” (Clip here.)

According to evidence presented at trial, in 2017, Mr. Reagor told International Bank of Commerce (IBC) that the auto group was experiencing tremendous growth and expected to go public. He claimed the company needed a cash infusion to sustain its upward trajectory and maintain a cash cushion for each of the dealerships to operate.

Relying on that information, IBC granted Reagor Dykes a $10 million working capital loan, which was distributed in two tranches: $5,000,000 in July 2017 and another $5,000,000 in February 2018, to be disbursed to the various RDAG entities.

Instead of investing all of the money into the business as he’d said he would, Mr. Reagor diverted more than $1.7 million to his personal account at Prosperity Bank – $766,277 in July 2017, following IBC’s disbursement of the first tranche of money, and $1 million in February 2018, following IBC’s disbursement of the second tranche of money. At trial, Reagor Dykes’ CFO, Shane Smith, testified that Mr. Reagor and his partner, Rick Dykes, routinely drew money out of the business. Over a 10-year-period, Mr. Smith estimated, the pair withdrew more than $25 million.

In videos introduced at sentencing, Mr. Reagor told employees that anyone bringing home a five-digit salary is “broke as [expletive]” and living “a chump life.”

“Don’t have any skeletons. See, I don’t have any -- and if I had any, I already forgot ‘em. I got a selective memory. I remember what I [expletive] want to remember,” he told his employees. “And everything else doesn’t [expletive] matter.” (Clip here.)

Fifteen of Mr. Reagor’s employees previously pleaded guilty to various crimes involving dummy flooring and check kitting at Reagor Dykes, including:

• Shane Andrew Smith, Reagor Dykes’ CEO, who pleaded guilty in June 2019 to conspiracy to commit wire fraud
• Diana Urias, an office manager in Reagor Dykes’ used car mall in Levelland, who pleaded guilty in September 2019 to conspiracy to commit bank fraud
• Sheila Miller, an RDAG group controller, who pleaded guilty in September 2019 to conspiracy to commit bank fraud
• Paige Johnston, an office manager in Reagor Dykes’ Chevrolet store in Floydada, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Lindsay Williams, and RDAG group accounting manager, who pleaded guilty in October 2019 to conspiracy to commit bank fraud
• Sherri Wood, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Pepper Rickman, an accounting controller at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Brad Fansler, an RDAG group administrative director, who pleaded guilty in November 2019 to conspiracy to commit wire fraud
• Ashley Dunn, executive assistant to the CEO, who pleaded guilty in December 2019 to conspiracy to commit bank fraud
• Whitney Maldonado, an office manager at Reagor Dykes’ Mitsubishi store in Lubbock, who pleaded guilty in December 2019 to conspiracy to commit wire fraud
• Elaina Cabral, an office manager at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in December 2019 to conspiracy to commit wire fraud
• Mistry Canady, an office manager at Reagor Dykes’ Ford store in Lamesa, who pleaded guilty in January 2020 to conspiracy to commit wire fraud
• Andrea Kate Phillips, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in February 2020 to misprision of a felony
• Wesley Neel, RDAG Safety & Compliance Manager, who pleaded guilty in March 2020 to conspiracy to commit wire fraud
• Steven Reinhart, RDAG Legal Compliance Director, who pleaded guilty in February 2021 to misprision of a felony
   

“To Bart Reagor, anyone who isn’t a millionaire is a chump. And Mr. Reagor couldn’t face being a chump. So, instead of doing his best to grow his business honestly, he padded his personal bank account by lying to a federally-insured bank. I imagine he will spend the next 14 years behind bars regretting that decision,” said U.S. Attorney Chad E. Meacham. “The Justice Department will not tolerate abuse of our nation’s financial institutions.”

“Financial crimes can destroy businesses which in turn causes irreparable damage to our economy. Mr. Reagor’s sentence sends a clear message to any criminal who uses corporate fraud for their own personal gain,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “The FBI and our law enforcement partners will not tolerate this behavior. We will vigorously pursue anyone that uses their executive position to defraud a lending institution, investors, or the public.”

The Federal Bureau of Investigation’s Dallas Field Office and Internal Revenue Services - Criminal Investigation Division conducted the investigation.  Assistant U.S. Attorneys Joshua Frausto, Jeffrey Haag, and Amy Burch prosecuted the case.

The owners of a cryptocurrency company have been sentenced to a combined 8 years in federal prison for tax evasion, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Bitqyck founders Bruce Bise, 61, and Samuel Mendez, 65, were charged with tax evasion in August 2021. Mr. Bise pleaded guilty on Sept. 9, 2021 and was sentenced on March 7, 2022 to 50 months in federal prison; Mr. Mendez pleaded guilty on October 12, 2021 and was sentenced this afternoon to 50 months in prison.  U.S. District Judge Jane J. Boyle ordered the men jointly and severally liable for  $1.6 million apiece.

According to plea papers, Mr. Bise and Mr. Mendez admitted that Bitqyck raised approximately $24 million from more than 13,000 investors. Instead of fulfilling their promises to these investors, the defendants used Bitqyck funds on personal expenses, including casino trips, cars, luxury home furnishings, art, and rent.

“Crypto actors are required to pay their fair share of taxes, just like everyone else,” said U.S. Attorney Chad Meacham. “Not only did these defendants shirk their tax obligations, they lied to investors and made off with their millions. Anyone else contemplating such a scheme should know that the Justice Department and its law enforcement partners have a sharp eye on the cryptocurrency space, and we will not let criminal behavior slide.”

“These criminals committed this scheme to thoroughly deceive and defraud stakeholders and the taxpaying public by cheating cryptocurrency investors,” said Special Agent in Charge Christopher J. Altemus Jr., Dallas Field Office. “The IRS-Criminal Investigation Dallas Field Office is proud to be part of the team that is bringing them to justice and will continue to pursue those who unjustly enrich themselves by not paying their taxes.”

In marketing materials, the pair promoted the company’s cryptocurrency, Bitqy, as a way for “those individuals who missed out on Bitcoin” to get rich. They held their initial coin offering, or ICO, in 2016. (An ICO is a process in which a company attempts to raise capital by selling a new cryptocurrency, which investors may purchase in the hope that the value of the cryptocurrency will increase.)  In an attempt to legitimize Bitqy tokens – and to avoid scrutiny over selling unregistered securities – the company characterized the cryptocurrency as an “earned gift” that rewarded consumers for certain internet purchases.

A white paper posted on the Bitqyck website promised investors that each Bitqy token came with 1/10th of a share of Bitqyck common stock. Mr. Bise and Mr. Mendez admitted, however, that they never actually distributed shares to token holders nor embedded the shares within the Ethereum Smart Contract. The only shares of common stock Bitqyck issued were to Bise and Mendez, who collectively owned 100% of Bitqyck’s common stock.

About nine months after launching Bitqy, Mr. Bise and Mr. Mendez began marketing another token, BitqyM, arbitrarily priced at $1. They claimed buying the token allowed investors to join “Bitcoin mining operations,” by paying to power a Bitqyck Bitcoin mining facility in Washington state. In reality, Mr. Bise and Mr. Mendez admitted in plea papers, no such mining facility ever existed. Unbeknownst to investors, the defendants contracted with an overseas third-party company in an attempt to mine the Bitcoin they’d promised to investors.  

(Bitcoin mining involves solving complex mathematical problems in order to verify transactions on a public ledger, known as the Blockchain. The problems require computing power, which in turn requires a significant amount of electricity.)

Mr. Bise and Mr. Mendez profited from Bitqyck by diverting income from the company for their personal use at their shareholders’ expense. From 2016 to 2018, Mr. Bise and Mr. Mendez raked in roughly $4.68 million and $4.48 million, respectively.

“By misrepresenting unregistered securities to investors who were lured with the appeal of owning shares of interest in a new and exciting marketplace, the defendants took advantage of unsuspecting individuals and defrauded them out of millions of dollars,” said Ryan L. Korner, Special Agent in Charge of IRS-CI’s Los Angeles Field Office. “Today’s sentencing saw justice served not only on the investors of cryptocurrency, but also on honest, hard-working American taxpayers who choose to pay their fair share of income taxes, rather than enriching themselves by evading their tax-paying responsibilities as both Mr. Bise and Mr. Mendez have done.”

Taxpayers transacting in virtual currency are required by law to report those transactions on their tax returns. For 2016 and 2017, Mr. Bise underreported his income to the IRS, resulting in a tax loss of $371,278. For that same period, Mr. Mendez also underreported his income to the IRS, resulting in a tax loss of $311,155. In 2018, Bitqyck failed to file any corporate tax returns at all despite netting more than $3.5 million from investors.  The total tax loss joint and severally to the United States government between Mr. Bise and Mr. Mendez is more than $1.6 million dollars.

The defendants’ guilty pleas came on the heels of a civil settlement with the Securities & Exchange Commission (SEC), in which Bitqyck agreed to pay an $8.3 million penalty to resolve claims that it defrauded investors and operated an unregistered digital asset exchange. As part of that settlement, Mr. Bise and Mr. Mendez agreed to pay disgorgement and penalties of $890,254 and $850,022, respectively.

The Internal Revenue Services’ Criminal Investigations Divisions in Dallas and Los Angeles conducted the investigation. Assistant U.S. Attorney Sid Mody is prosecuting the case.

A man charged with conducting ransomware attacks against multiple victims, including the July 2021 attack against Kaseya, made his initial appearance and was arraigned today in the Northern District of Texas.

According to an August 2021 indictment, Yaroslav Vasinskyi, 22, accessed the internal computer networks of several victim companies and deployed Sodinokibi/REvil ransomware to encrypt the data on the computers of victim companies.

“When last year I announced charges against members of the Sodinokibi/REvil ransomware group, I made clear that the Justice Department will spare no resource in identifying and bringing to justice transnational cybercriminals who target the American people,” said Attorney General Merrick B. Garland. “That is exactly what we have done. The United States, alongside our international partners, will continue to swiftly identify, locate, and apprehend alleged cybercriminals, capture their illicit profits, and bring them to justice.”

“Just eight months after committing his alleged ransomware attack on Kaseya from overseas, this defendant has arrived in a Dallas courtroom to face justice,” said Deputy Attorney General Lisa O. Monaco. “When we are attacked, we will work with our partners here and abroad to go after cybercriminals, wherever they may be.” 

According to the indictment, Vasinskyi was allegedly responsible for the July 2, 2021, ransomware attack against Kaseya. In the alleged attack against Kaseya, Vasinskyi caused the deployment of malicious Sodinokibi/REvil code throughout a Kaseya product that caused the Kaseya production functionality to deploy REvil ransomware to “endpoints” on Kaseya customer networks. After the remote access to Kaseya endpoints was established, the ransomware was executed on those computers, which resulted in the encryption of data on computers of organizations around the world that used Kaseya software.

Through the deployment of Sodinokibi/REvil ransomware, the defendant allegedly left electronic notes in the form of a text file on the victims’ computers. The notes included a web address leading to an open-source privacy network known as Tor, as well as the link to a publicly accessible website address the victims could visit to recover their files. Upon visiting either website, victims were given a ransom demand and provided a virtual currency address to use to pay the ransom. If a victim paid the ransom, the defendant provided the decryption key and the victim then was able to access their files. If a victim did not pay the ransom, the defendant typically posted the victim’s stolen data or claimed they sold the stolen data to third parties, and victims remained unable to access their files.

Vasinskyi is charged with conspiracy to commit fraud and related activity in connection with computers, damage to protected computers, and conspiracy to commit money laundering. If convicted of all counts, he faces a total penalty of 115 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Vasinskyi, a Ukrainian national with ties to a ransomware group linked to Russia-based actors, was taken into custody in Poland where he remained held by authorities pending proceedings in connection with his requested extradition to the United States, pursuant to the extradition treaty between the United States and the Republic of Poland. Vasinskyi was transported to Dallas by U.S. law enforcement authorities where he arrived on March 3. He made his initial court appearance and was arraigned today in the Northern District of Texas.

The FBI’s Dallas and Jackson Field Offices are leading the investigation. Substantial assistance was provided by the Justice Department’s Office of International Affairs and the National Security Division’s Counterintelligence and Export Control Section.

Assistant U.S. Attorney Tiffany H. Eggers for the Northern District of Texas and Senior Counsel Byron M. Jones of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.

The U.S. Attorney’s Office for the Northern District of Texas, the FBI’s Dallas and Jackson Field Offices and the Criminal Division’s Computer Crime and Intellectual Property Section conducted the operation in close cooperation with Europol and Eurojust, which were an integral part of coordination. Investigators and prosecutors from several jurisdictions, including Romania's National Police and the Directorate for Investigating Organised Crime and Terrorism; Canada’s Royal Canadian Mounted Police; France’s Court of Paris and BL2C (anti-cybercrime unit police); the Dutch National Police; Poland’s National Prosecutor’s Office, Border Guard, Internal Security Agency, and Ministry of Justice; and the governments of Norway and Australia provided valuable assistance.

The U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN), the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA); Germany’s Public Prosecutor’s Office Stuttgart and State Office of Criminal Investigation of Baden-Wuerttemberg; Switzerland’s Public Prosecutor’s Office II of the Canton of Zürich and Cantonal Police Zürich; the National Police of Ukraine and the Prosecutor General’s Office of Ukraine; the United Kingdom’s National Crime Agency; the U.S. Secret Service; the Texas Department of Information Resources; BitDefender; McAfee; and Microsoft also provided significant assistance.

For more resources on ransomware prevention and response, visit www.StopRansomware.gov.

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

An Austin man with alleged ties to a double homicide has been charged with a drug crime, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Fernando Molina, 38, was charged via criminal complaint on Feb. 16 and indicted on March 9, charged with conspiracy to possess with intent to distribute a controlled substance. 

According to the complaint, the charges stemmed from an investigation into a drug-related double homicide perpetrated in Parker County, Texas on April 11, 2021. Two weeks after the killings, investigators raided the residence of Mr. Molina’s associate, Jerome Thomas Watkins, and seized more than 3,000 fentanyl-laced counterfeit pills, multiple firearms, and roughly 20 cell phones that allegedly contained evidence of fentanyl, cocaine, methamphetamine, and heroin trafficking.

According to the complaint, a search of those phones revealed text message conversations with a drug supplier saved in the phone under the name “Austin.” Investigators eventually traced “Austin’s” multiple phone numbers to Mr. Molina. One of Mr. Molina’s phones was the last device in contact with a homicide victims before his death; another pinged cell towers in close proximity to the crime scene at the time of the homicide, according to the complaint.

Parker County has charged Mr. Molina with conspiracy to commit murder in connection with the double homicide.

A criminal complaint is merely an allegation of criminal conduct, not evidence. Mr. Molina is presumed innocent until proven guilty in a court of law.  If convicted, he faces life in federal prison.

Mr. Molina’s associate, Mr. Watkins, was convicted at trial in November 2021 of conspiracy to possess with intent to distribute cocaine, methamphetamine, heroin, and fentanyl, possession with intent to distribute fentanyl, and being a felon in possession of a firearm. He is set to be sentenced later this month.

The Drug Enforcement Administration’s Dallas Field Division, the Federal Bureau of Investigation’s Dallas Field Office – Fort Worth Resident Agency, the Parker County Sheriff’s Office, and the Pflugerville Police Department’s Street Crimes Unit conducted the investigation, which was classified a HIDTA (High Intensity Drug Trafficking Area) operation. Assistant U.S. Attorney Shawn Smith is prosecuting the case.

A Romanian hacker has been charged with selling millions of stolen credit card numbers obtained through the use of malware, announced U.S. Attorney for the Northern District of Texas Chad E.  Meacham.

Sorin Becheru, a 34-year-old Romanian citizen living in Bucharest, was charged in March 2021 with conspiracy to commit fraud in connection with access devices. Mr. Becheru was arrested by Romanian authorities on Jan. 1, 2022 based on a request from the United States and in accordance with the bilateral extradition treaty between the United States and Romania. On March 3, 2022, FBI agents flew Mr. Becheru from Bucharest to Dallas. He made his initial appearance before U.S. Magistrate Judge Rebecca Rutherford on March 4.

“Malware is an increasingly insidious threat to U.S. companies and consumers. With just a few keystrokes, sophisticated hackers can compromise millions of accounts,”  said U.S. Attorney Chad Meacham. “The Justice Department will not hesitate to pursue cyber criminals, including those who operate abroad. In the meantime, we encourage Americans to take steps to guard their personally identifiable information online.”

“Financially motivated cybercrime is attractive to a wide range of actors and its results can be devastating for affected consumers and businesses,” said Dallas FBI Special Agent in Charge Matthew DeSarno. “We will continue our proactive private sector engagement for incident response, mitigation, and prevention, and will seek justice for the millions affected by this type of fraudulent activity.”

According to the indictment, Mr. Becheru and his coconspirators allegedly used point-of-sale memory scraping malware to obtain consumers’ credit card information from victim servers located in the U.S. They then allegedly sold the numbers on darkweb carding forums, including “Vendetta” and “Tony Montana.” Buyers used the stolen credit card numbers to purchase goods and services. 

Mr. Becheru – who used various online identities, including “t0r.creep.im,” truan1@jabbim.com, and buchetta@jabb3r.de – allegedly possessed and sold credit card information for millions of cards. At one point, he was in possession of information for more than 240,000 credit cards belonging to victims located in the Northern District of Texas and elsewhere.

An indictment is merely an allegation of wrongdoing, not evidence. Mr. Becheru is presumed innocent unless and until proven guilty in a court of law.

If convicted, he faces up to five years in federal prison.

The Federal Bureau of Investigation and the United States Secret Service conducted the investigation in partnership with the Romanian National Police and the Romanian Ministry of Justice’s Directorate for Investigation of Infractions of Organized Crime and Terrorism (DIICOT). The Justice Department’s Office of International Affairs was instrumental in the extradition. Assistant U.S. Attorney Sid Mody is prosecuting the case.

A former preschool teacher was sentenced today to 20 years in prison for purchasing sexually explicit images of children, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Jason Sherod Baldwin, 29, was charged via criminal complaint in July 2020 and indicted less than a month later. He pleaded guilty in August to one count of receipt of child pornography and was sentenced today by U.S. District Judge Jane J. Boyle. He was ordered to report to the Bureau of Prisons on April 6.

In plea papers, Mr. Baldwin, a former teacher at Dallas’ Hockaday School, admitted that he used Kik, an encrypted messaging app popular among teenagers, to purchase links to child pornography from another Kik user. In chats, Mr. Baldwin requested “mainly preteen boy-on-boy vid[eo]s.”

According to court documents, the investigation into Mr. Baldwin began after FBI agents executed a federal search warrant at the home of a convicted sex offender in Philadelphia. A search of the offender’s phone revealed that he routinely used Kik to solicit payment for links child pornography. One of the accounts with which the offender communicated traced back to Mr. Baldwin.

On Oct. 29, Mr. Baldwin messaged the sex offender about purchasing child pornography. The offender shared a link to a “preview” folder and indicated a cost for the complete file set. Mr. Baldwin sent the money through PayPal and received links to the files a few minutes later.

The investigation showed that Mr. Baldwin purchased child pornography from the offender several times over the ensuing months, on Nov. 11 (two videos of minor males), Dec. 8 (a video and more than 100 images), Dec. 18 (two videos), and Jan. 21 (seven videos).

In an interview with law enforcement after he was arrested, Mr. Baldwin admitted that he had used Kik to purchase sexually explicit images of children. He said he had hundreds of sexually explicit images and videos of children stored on his cell phones, and that he had been viewing child porn for approximately eight years.

The Federal Bureau of Investigation’s Dallas Field Office and the Plano Police Department conducted the investigation with the assistance of the Bureau’s Philadelphia Field Office. Assistant U.S. Attorney Nicole Dana prosecuted the case.