Northern District of Texas

A Liberian national who orchestrated a fraudulent scheme to secure more than $23 million in forgivable Paycheck Protection Program (PPP) loans pleaded guilty today to a federal financial crime, announced Acting 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 and indicted later that month. He pleaded guilty on Tuesday to a superseding information charging him with one count of engaging in monetary transactions using property derived from unlawful activity.

“The Paycheck Protection Program was designed to help hardworking businesspeople keep their companies afloat during the pandemic – not to line the pockets of unscrupulous accountants,” said Acting U.S. Attorney Chad Meacham. “The Justice Department will prosecute anyone who attempts to exploit pandemic-era financial programs. There are countless businesses ravaged by COVID-19 that deserved this money; Mr. Jalloul did not.”

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 now faces up to 10 years in federal prison for the PPP fraud. His sentencing date has not yet been set.

He is 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. 

The Dallas Field Offices of the Federal Deposit Insurance Corporation, Office of Inspector General, and the Internal Revenue Service, 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.

Reagor Dykes Auto Group owner Bart Reagor was convicted today of lying to a bank about his company's prospects, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.

After 12 hours of deliberation, a federal jury found Bart Wade Reagor, 55, guilty of making false statements to a bank insured by the FDIC. Mr. Reagor, whose trial lasted four days, now faces up to 30 years in federal prison.

“Bart Reagor’s greed and insatiable need to flaunt his wealth led him to lie to a federally-insured bank and ultimately resulted in that bank suffering a loss of over $20 million dollars.” said Acting U.S. Attorney Chad Meacham. “He’s now bracing for a possibly decades-long sentence. The Department of Justice will not permit this kind of abuse of our nation’s financial institutions and the funds of its hard-working depositors.”

“This multi-year investigation was extremely complicated and required dedicated complex financial crimes resources and today’s outcome demonstrates the government’s commitment to protecting the best interests of the American people,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “The resulting loss caused by false statements has the potential to harm the U.S. economy and investor confidence, and we will continue to work alongside the U.S. Attorney’s Office and our law enforcement partners to ensure that justice is served.” 

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.

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.

While the jury convicted Mr. Reagor of lying to an FDIC-insured bank, they acquitted him of bank fraud. His sentencing date has not yet been set.

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

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 are prosecuting the case.

A federal grand jury in the Northern District of Texas returned an indictment today charging a former Chief Technical Pilot for Boeing with deceiving the Federal Aviation Administration’s Aircraft Evaluation Group in connection with their evaluation of Boeing’s 737 MAX airplane, and scheming to defraud Boeing’s U.S. based airline customers to obtain tens of millions of dollars for Boeing.

According to court documents, Mark A. Forkner, 49, formerly of Washington State and currently of Keller, Texas, allegedly deceived the FAA AEG during the agency’s evaluation and certification of Boeing’s 737 MAX airplane. As alleged in the indictment, Forkner provided the agency with materially false, inaccurate, and incomplete information about a new part of the flight controls for the Boeing 737 MAX called the Maneuvering Characteristics Augmentation System (MCAS).

Because of his alleged deception, a key document published by the FAA AEG lacked any reference to MCAS. In turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked any reference to MCAS — and Boeing’s U.S.-based airline customers were deprived of important information when making and finalizing their decisions to pay Boeing tens of millions of dollars for 737 MAX airplanes. 

“Forkner allegedly abused his position of trust by intentionally withholding critical information about MCAS during the FAA evaluation and certification of the 737 MAX and from Boeing’s U.S.‑based airline customers,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “In doing so, he deprived airlines and pilots from knowing crucial information about an important part of the airplane’s flight controls. Regulators like the FAA serve a vital function to ensure the safety of the flying public. To anyone contemplating criminally impeding a regulator’s function, this indictment makes clear that the Justice Department will pursue the facts and hold you accountable.”     

“In an attempt to save Boeing money, Forkner allegedly withheld critical information from regulators,” said Acting U.S. Attorney Chad E. Meacham for the Northern District of Texas. “His callous choice to mislead the FAA hampered the agency’s ability to protect the flying public and left pilots in the lurch, lacking information about certain 737 MAX flight controls. The Department of Justice will not tolerate fraud – especially in industries where the stakes are so high."

Forkner allegedly withheld crucial information about the Boeing 737 Max and deceived the FAA, showing blatant disregard for his responsibilities and the safety of airline customers and crews," said Assistant Director Calvin Shivers of the FBI. "The FBI will continue to hold individuals like Forker accountable for their fraudulent acts which undermine public safety." 

“There is no excusing those who deceive safety regulators for the sake of personal gain or commercial expediency,” said Inspector General Eric J. Soskin of the U.S. Department of Transportation. “Our office works continuously to help keep the skies safe for flying and protect the traveling public from needless danger. Today’s charges demonstrate our unwavering commitment to working with our law enforcement and prosecutorial partners to hold responsible those who put lives at risk.”

According to court documents, Boeing began developing and marketing the 737 MAX in and around June 2011. The FAA AEG was responsible for determining the minimum level of pilot training required for a pilot to fly the 737 MAX for a U.S.-based airline, based on the nature and extent of the differences between the 737 MAX and the prior version of Boeing’s 737 airplane, the 737 Next Generation (NG). At the conclusion of this evaluation, the FAA AEG published the 737 MAX Flight Standardization Board Report (FSB Report), which included, among other things, the FAA AEG’s differences-training determination for the 737 MAX, as well as information about differences between the 737 MAX and the 737 NG. All U.S.-based airlines were required to use the information in the 737 MAX FSB Report as the basis for training their pilots to fly the airplane.

As Boeing’s 737 MAX Chief Technical Pilot, Forkner led the 737 MAX Flight Technical Team and was responsible for providing the FAA AEG with true, accurate, and complete information about differences between the 737 MAX and the 737 NG for the FAA AEG’s evaluation, preparation, and publication of the 737 MAX FSB Report.

In and around November 2016, Forkner discovered information about an important change to MCAS. Rather than sharing information about this change with the FAA AEG, Forkner allegedly intentionally withheld this information and deceived the FAA AEG about MCAS. Because of his alleged deceit, the FAA AEG deleted all reference to MCAS from the final version of the 737 MAX FSB Report published in July 2017. As a result, pilots flying the 737 MAX for Boeing’s U.S.‑based airline customers were not provided any information about MCAS in their manuals and training materials. Forkner sent copies of the 737 MAX FSB Report to Boeing’s U.S.-based 737 MAX airline customers, but withheld from these customers important information about MCAS and the 737 MAX FSB Report evaluation process.

On or about Oct. 29, 2018, after the FAA AEG learned that Lion Air Flight 610 — a 737 MAX — had crashed near Jakarta, Indonesia, shortly after takeoff and that MCAS was operating in the moments before the crash, the FAA AEG discovered the information about the important change to MCAS that Forkner had withheld.

Having discovered this information, the FAA AEG began reviewing and evaluating MCAS. 

On or about March 10, 2019, while the FAA AEG was still reviewing MCAS, the FAA AEG learned that Ethiopian Airlines Flight 302 — a 737 MAX — had crashed near Ejere, Ethiopia, shortly after takeoff and that MCAS was operating in the moments before the crash. Shortly after that crash, all 737 MAX airplanes were grounded in the United States.

Forkner is charged with two counts of fraud involving aircraft parts in interstate commerce and four counts of wire fraud. He is expected to make his initial court appearance on Friday in Fort Worth, Texas, before U.S. Magistrate Judge Jeffrey L. Cureton of the U.S. District Court for the Northern District of Texas. If convicted, he faces a maximum penalty of 20 years in prison on each count of wire fraud and 10 years in prison on each count of fraud involving aircraft parts in interstate commerce. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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

The Chicago field offices of the FBI and DOT-OIG are investigating the case, with the assistance of other FBI and DOT-OIG field offices.

Trial Attorney Cory E. Jacobs, Assistant Chief Michael T. O’Neill, and Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Alex Lewis of the U.S. Attorney’s Office for the Northern District of Texas are prosecuting the case.

 

A Texas man pleaded guilty Tuesday to one count of adulterating a drug that was used in cataract surgeries.

According to court documents, Jack Randall Munn, 71, of Dallas, a licensed pharmacist and former owner of Guardian Pharmacy Services (Guardian), a Dallas pharmacy, oversaw the compounding of the drug for two outpatient Dallas surgical centers in 2016 and 2017. The drug, a combination of an antibiotic and a steroid, contained an excessive amount of an inactive ingredient that can damage sensitive eye tissue.

At the time of the events described in court documents, Munn represented to the surgical centers that Guardian could compound the drug in a manner safe for injection into patients’ eyes. However, the drug made by Guardian contained an excessive amount of the inactive ingredient, causing its purity and quality to fall below that which it was represented to possess.

Munn pleaded guilty to one misdemeanor count of distributing an adulterated drug in violation of the Federal Food Drug and Cosmetic Act. He is scheduled to be sentenced on Feb. 3, 2022 and faces a maximum penalty of one year in prison and a fine of up to $100,000. The federal magistrate judge who presided over Munn’s guilty plea will determine sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations investigated the case.

Assistant Director John Claud, Senior Trial Counsel David A. Frank and Trial Attorney Sarah Williams of the Civil Division’s Consumer Protection Branch are prosecuting the case. Associate Chief Counsel for Enforcement Karen Towns with the FDA’s Office of Chief Counsel, and the U.S. Attorney’s Office for the Northern District of Texas provided valuable assistance in the case.

The owners of a cryptocurrency company have pleaded guilty to tax evasion, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Bitqyck founders Bruce Bise, 60, and Samuel Mendez, 65, were charged with tax evasion in August. Mr. Bise pleaded guilty on Sept. 9; Mr. Mendez pleaded guilty this morning.

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.

“Transacting in virtual currencies does not exempt businesspeople from paying income taxes,” said Acting U.S. Attorney Chad Meacham. “These crypto-savvy defendants exploited an emerging technology, lying to their investors, pocketing the proceeds, and concealing the income from the IRS. The Department of Justice is committed to ensuring that every taxpayer pays his or her fair share – and to protecting the crypto space from bad actors.”

“As digital currencies continue to emerge as an investment option for taxpayers, we must continue to increase the pressure on anyone who tries to take advantage of their investors and taxpayers through fraud and tax evasion. The great work from both the Dallas and Los Angeles IRS-CI field offices firmly puts that pressure on these two cybercriminals and serves as a warning to others,” saidChristopher J. Altemus Jr., Special Agent in Charge of IRS-CI's Dallas Field Office.

“Mr. Bise and Mr. Mendez exploited the growing appeal of digital currency and defrauded thousands of victim-investors out of millions of dollars that they used to pay their personal expenses, rent, gambling activities, and purchases of vehicles and art,” said Ryan L. Korner, Special Agent in Charge of IRS -CI's Los Angeles Field Office. “These fraudsters required investors to produce cash, and then converted the fraud proceeds to cryptocurrency to purposefully circumvent financial reporting requirements. IRS Criminal Investigation is committed to protecting Americans and pursuing financial schemes even into the crypto world. ”

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.

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.

Both men now face up to five years in federal prison.

The defendants’ guilty pleas come 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 dozen Lubbock drug traffickers have been sentenced to a combined 106 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.

The defendants were arrested during the Drug Enforcement Administration’s Operation Los Perros De Nieve (“Operation Snow Dogs”), which also resulted in the seizure of multiple kilograms of cocaine, more than a dozen firearms, and roughly $80,000 cash from drug dealers in Lubbock.

The last of 12 in-custody defendants, Ruben Alejandro Rodriguez-Parada, was sentenced yesterday to almost four years in federal prison.  A 13th charged defendant remains a fugitive.

According to court documents, DEA agents used a confidential informant to buy cocaine from several defendants. They also executed search warrants at several defendants’ residences, including their vehicles, and seized five bricks of cocaine from a storage unit in Lubbock.

One defendant, Robert Bruno, admitted that he regularly worked with a cocaine source of supply in Mexico, who delivered the drug with little advance notice and then aggressively collected on his debts.

“Cocaine extracts a terrible toll, wreaking havoc on users’ bodies and brains. We are determined to dismantle the organizations that inject this drug into our communities. The sentences announced today send a message to would-be dealers in Lubbock: The penalty for cocaine distribution is serious,” said Acting U.S. Attorney Chad Meacham.

“Cocaine is not manufactured in Lubbock nor does the coca plant, from where it is derived, grow in West Texas’ fertile land.  Its prevalence and distribution in the area must be deliberate and for only one purpose:  greed,” said DEA Dallas Special Agent in Charge Eduardo A. Chávez, who oversees DEA operations in Lubbock.  “These sentences handed down to Mr. Rodriguez-Parada, Mr. Bruno, and their co-conspirators should send a message to all violent drug trafficking organizations operating in the area that decisions based on greed could lead to more than a collective century in prison.”

Those who’ve been sentenced include:

• Ronnie Manuel Garcia – pleaded guilty to possession of firearms in furtherance of a drug trafficking crime and unlawful user of a controlled substance in possession of firearms; sentenced to 180 months in federal prison.
• Jonathan Phillip “J.P.” Reyes – pleaded guilty to distribution of cocaine; sentenced to 240 months in federal prison (to run consecutively to any sentence imposed in the state case against him).
• Raul Perez, III – pleaded guilty to distribution of cocaine; sentenced to 235 months in federal prison (to run consecutively to any sentence imposed in the state case against him).
• Krystal Lynn Ramos – pleaded guilty to misprision (concealment) of a felony; sentenced to 21 months in federal prison.
• Amy Shawn “Evon” Rodriguez – pleaded guilty to misprision (concealment) of a felony; sentenced to 27 months in federal prison.
• Juan Moncada – pleaded guilty to possession with intent to distribute cocaine base; sentenced to 125 months in federal prison (to run consecutively to any sentence imposed in the state case against him).
• Jacob Anthony Molina – pleaded guilty to possession of firearms in furtherance of a drug trafficking crime; sentenced to 60 months in federal prison.
• Jeremy Wayne “Lil’ Jay” Beck – pleaded guilty to possession of firearms in furtherance of a drug trafficking crime; sentenced to 60 months in federal prison.
• Michael Paul Perez – pleaded guilty to possession with intent to distribute cocaine; sentenced to 63 months in federal prison.
• Robert Lee Bruno – pleaded guilty to conspiracy to distribute cocaine; sentenced to 188 months in federal prison.
• Amaris Arestin Leon – pleaded guilty to misprision (concealment) of a felony; sentenced to 30 months in federal prison (to run consecutively to any sentence imposed in state cases against him).
• Ruben Alejandro Rodriguez-Parada – pleaded guilty to money laundering; sentenced to 46 months in federal prison.
   

The investigation was led by the Drug Enforcement Administration’s Dallas Field Division and the Lubbock Police Department with assistance from the Lubbock County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division, Homeland Security Investigations’ Dallas Field Office, and the Texas Department of Safety. This investigation was carried out as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program with the coordination of the Lubbock HIDTA group and Texas Anti-Gang initiative. Assistant U.S. Attorney Sean Long is prosecuting the case.

A Dallas man has been charged with unlawful possession of more than 20 firearms, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.

Kevion Deshaun Rogers, 27, was indicted Tuesday on two counts of possession of a firearm by a convicted felon, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of possession with intent to distribute a controlled substance.

According to the indictment, Mr. Rogers – who’d been previously convicted of multiple drug charges as well as evading arrest – allegedly possessed 21 weapons unlawfully, including 10 Glock pistols, three AM-15 pistols, two Smith & Wesson rifles, and a German Sports Guns Kalashnikov. 

Court documents show he was arrested on Sept. 11, 2021 with an empty handgun holster strapped to his left leg. Although he denied having a weapon on him, law enforcement located two handguns, including a loaded 9mm Glock, stashed in the steering wheel column cover, and a 50 round drum magazine full of ammunition on the rear passenger floorboard.

According to the indictment, Mr. Rogers also allegedly possessed and intended to distribute marijuana.

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

If convicted, he faces up to 19 ½ years in federal prison.

The Bureau of Alcohol, Tobacco, Firearms, & Explosives’ Dallas Field Division conducted the investigation with the assistance of the Dallas Police Department. Assistant U.S. Attorney Taylor Winn is prosecuting the case.

A Jacksboro nurse was sentenced yesterday to 25 years in federal prison for sexually exploiting a 13-year-old girl, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.

Stephen Russel Adams, 38, pleaded guilty in June to sexual exploitation of a child. He was sentenced Tuesday by Senior U.S. District Judge Terry R. Means.

According to court documents, Mr. Adams surreptitiously recorded nude images of his 13-year-old victim and posted them on social media. In fall 2020, an undercover agent initiated a chat with Mr. Adams, who sent the agent a nude photo of the child standing in a bathroom.

In the chats, which were introduced into evidence at his sentencing hearing, Mr. Adams claimed he had been groping the child while she slept “for almost 2 years.” He discussed drugging the child with “sleeping pills and muscle relaxers” and even asked the undercover agent if he could obtain “roofies.”

The investigation eventually led to the identification of a cloud account the defendant used to store images of his victim.

Mr. Adams, who was employed as a nurse at an adult residential care facility at the time of the crime, admitted he took surreptitious videos of the child and uploaded them to the cloud account.

“Sexual crimes against children are some of the most repulsive acts we investigate. We are determined to prevent this abuse from happening to minors and will not relent in punishing those who prey on their vulnerability,” said Christopher M. Miller, Homeland Security Investigations Deputy Special Agent in Charge of the Dallas Field Office. “It is because of our collaborative law enforcement approach in prosecuting this case that Mr. Adams is facing a lengthy sentence for his crimes of child exploitation. The conclusion of this case removes a dangerous predator off the street, and hopefully provides a measure of closure and comfort to the victim.”

Homeland Security Investigations’ Dallas Field Office conducted the investigation with the assistance of the Wise County District Attorney’s Office, the Jack County Sheriff’s Office, the Jacksboro Police Department, and Homeland Security Investigations’ Detroit Field Office. Assistant U.S. Attorney Aisha Saleem prosecuted the case.

A Kaufman County man who allegedly took out fraudulent loans in the name of his volunteer fire department has been charged with making a false statement to a bank, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham. 

Denny C. Mackey, the 68-year-old former treasurer of the Crandall Volunteer Fire Department, was arrested at his residence in Richardson on Monday. He made his initial appearance in federal court this morning. 

According to the indictment, between May 2011 and September 2013, Mr. Mackey allegedly obtained tens of thousands of dollars from financial institutions by applying for unauthorized loans purportedly to be used for fire department purposes, unbeknownst to the fire department's leadership. 

For example, as alleged in the indictment, Mr. Mackey fraudulently applied for a $75,000 loan purportedly for fire department expenses in August 2013. He falsely represented to the bank that the money would be used to fund the salary of a full-time fire department employee – knowing full well that the volunteer force didn’t employ any full-time staff.

Shortly after the bank issued the loan, which he concealed from the fire department, Mr. Mackey allegedly withdrew more than $50,000 – some out in cash and the rest by writing fire department checks to a company he controlled.

The following year, as reported by local media, the fire chief appeared before the Crandall City Council to report that the fire department had been forced to sell some of its trucks and equipment in order to pay off the fraudulent loan.

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

If convicted, he faces up to 30 years in federal prison.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Marcus Busch and Fabio Leonardi are prosecuting the case. 

Five subsidiaries of West Texas Gas Inc. will spend up to $5 million on compliance measures in a settlement that resolves allegations in the United States’ complaint, lodged today, that they violated federal Clean Air Act chemical accident prevention requirements at several of their natural gas processing plants. The companies will pay more than $3 million in civil penalties to resolve claims stemming from fatal chemical accidents and accident prevention program violations.

In a related criminal case, another West Texas Gas subsidiary that operated a gas plant in Big Lake, Texas, – Big Lake Gas Plant L.P. – pleaded guilty to one count of negligent endangerment and one count of violating the Clean Air Act.

The settlement requires the subsidiaries to take steps to prevent chemical accidents and improve safety at eight natural gas processing plants that the companies own and operate. Seven plants are located in Texas and one is in New Mexico. The plants use a variety of chemical processes containing toxic substances and flammable hydrocarbons, such as butane, methane and propane.

“West Texas Gas’ Clean Air Act violations cost lives,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Today’s settlement sends a strong message to industry that the Justice Department will vigorously enforce Clean Air Act requirements that protect workers, neighboring communities and the environment by preventing dangerous chemical releases like these.”

“This company’s blatant disregard of clean air regulations had devastating real-world consequences,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas. “Our hearts go out to the family of the employee killed in the chemical incident at the plant in Big Lake. We are proud to hold the company criminally responsible, and hopeful that the safety measures stipulated in the civil settlement will protect against similar incidents.”

“The tragic deaths due to the failure by West Texas Gas to safely manage hazardous chemicals, as required by law, demonstrates the severe dangers that these violations pose to workers, nearby communities and the environment,” said Acting Assistant Administrator Larry Starfield of the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “Today’s settlement requires West Texas Gas to take concrete steps to prevent future accidents and will improve air quality in the vicinity of these facilities.”

The civil complaint alleges that WTG Gas Processing L.P., WTG South Permian Midstream LLC and Davis Gas Processing Inc. violated section 112(r) of the Clean Air Act and the related chemical accident prevention regulations. The EPA identified the Clean Air Act violations addressed in today’s settlement during a series of inspections of the companies’ natural gas processing plants. The EPA inspections were initiated after a catastrophic fire in November 2015 killed an employee at WTG Gas Processing, L.P.’s East Vealmoor Gas Plant in Coahoma, Texas. Thousands of pounds of flammable and toxic substances were also released into the air. Other serious fires, resulting in millions of dollars of damage, occurred at some of the companies’ other plants, and an August 2018 leak of toxic hydrogen sulfide resulted in the death of another company employee in Big Lake, Texas.

Under the settlement, the companies must hire an outside, independent engineering firm to recommend actions that the companies will complete to improve process safety at six of the eight plants. The six plants must also implement an environmental management system to improve their compliance with all federal, state and local air pollution related requirements, not just those dealing with preventing chemical accidents. The companies have elected to permanently shut down the remaining two plants. 

Section 112(r) of the Clean Air Act and the risk management program regulations contain a comprehensive set of requirements to prevent accidental releases of hazardous air pollutants, an important objective of the Clean Air Act. These regulations require owners and operators of facilities, such as natural gas processing plants, chemical plants and petroleum refineries to perform adequate and timely equipment inspections and repairs, train employees involved in the operation and maintenance of equipment, evaluate the hazards of the chemical processing equipment and ensure that operating procedures contain clear and comprehensive instructions to safely operate process equipment.

In the related criminal case against Big Lake Gas Plant L.P. arising out of the August 2018 leak, the plant admitted that it negligently released hydrogen sulfide into the ambient air. Hydrogen sulfide is a toxic gas that can compromise the human nervous system and respiratory tract and can cause life-threatening health effects if not handled properly. One employee died as a result of exposure sustained while working at the plant, and another employee was injured. The company further admitted that it knowingly failed to properly update its risk management plan following the incident, an update required by law.  

Under the terms of its plea agreement, the plant agreed to pay a $3 million fine, and acknowledged it may be ordered to pay restitution to victims, as well as the costs of supervision.  

Assistant U.S. Attorney Sean Taylor prosecuted the criminal case.

Today’s settlement is part of the Justice Department and the EPA’s ongoing efforts to protect public health and the environment by preventing industrial accidents involving hazardous chemicals. 

The settlement was lodged today in the U.S. District Court for the Northern District of Texas.  The settlement is subject to a 30-day public comment period and final court approval. 

A Texas man who plotted to blow up a data center in Virginia was sentenced today to 10 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Seth Aaron Pendley, 28, was arrested in April after attempting to obtain an explosive device from an undercover FBI employee in Fort Worth. He pleaded guilty in June to malicious attempt to destroy a building with an explosive and was sentenced today by U.S. District Judge Reed C. O’Connor.

“The Justice Department is constantly on guard for threats posed by violent domestic extremists,” said Acting U.S. Attorney Prerak Shah. “As this case shows, radicals are lurking on the internet, looking for ways to lash out – and far too often, they move their plans off of the web and into the real world. We are indebted to the FBI employee who put his life on the line to disrupt Mr. Pendley’s plot before he could inflict real harm on data center workers, and are proud of today’s sentence.”

“Seth Aaron Pendley’s sentence is an affirmation of the work the North Texas Joint Terrorism Task Force performs around the clock to disrupt threats while keeping our community safe from harm,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “The public’s vigilance in reporting suspicious or threatening behavior is key to law enforcement’s ability to take quick action to prevent injuries and the destruction of property.”

In plea papers, Mr. Pendley admitted that he disclosed his plan to blow up an Amazon data center to a confidential source in January.  

In late February, he sent the source a list of potential targets and said he hoped a successful attack could “kill off about 70% of the internet.”  When the source offered to help him obtain C4 explosives to use in the attack, Mr. Pendley responded enthusiastically. He later showed the source a hand-drawn map of his chosen data center and described how he planned to disguise his car to evade detection by law enforcement.

In late March, the confidential source introduced Mr. Pendley to an individual who he claimed was his explosives supplier, but was actually an undercover FBI employee. In recorded conversations, Mr. Pendley allegedly told the employee he planned to attack web servers that he believed provided services to the FBI, CIA, and other federal agencies.

“The main objective is to f*** up the Amazon servers,” he said, adding that he hoped to anger “the oligarchy” enough to provoke a reaction that would convince the American people to take action against what he perceived to be a “dictatorship.”

During that same conversation, Mr. Pendley claimed to have been present at the Jan. 6 attack on the U.S. Capitol. He said that although he did not enter the building, he came prepared with a sawed off AR rifle, which he left in his car.

On April 8,  Mr. Pendley again met with the undercover FBI employee to pick up what he believed to be explosive devices. (In actuality, however, the undercover gave Mr. Pendley inert devices.) After the employee showed Mr. Pendley how to arm and detonate the devices, the defendant loaded them into his car. He was then arrested.

A subsequent search of his residence in Wichita Falls turned up an AR-15 receiver with a sawed off barrel, a pistol painted to look like a toy gun, masks, wigs, notes, and flashcards related to the planned attack.

The FBI’s Dallas Field Office, Wichita Falls Resident Agency and FBI’s North Texas Joint Terrorism Task Force conducted the investigation. Assistant U.S. Attorneys Robert Boudreau and Jay Weimer of the Northern District of Texas are prosecuting the case with the assistance of Trial Attorney Alexandra Hughes of the National Security Division.

A drug trafficker who advertised narcotics on Instagram and Telegram was sentenced yesterday to more than 19 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Ricardo Rosas Garcia, the 24-year-old leader of an Irving drug trafficking ring, pleaded guilty in April to conspiracy with intent to distribute controlled substances and possession of a firearm by a convicted felon. He was sentenced Thursday to 235 months in federal prison by U.S. District Judge Jane J. Boyle.

According to plea papers, Mr. Rosas admitted his organization used the social media handles “Ricky Rosas,” “rickyrosastv3,” and “rickyrosastc6” to hawk controlled substances and firearms.

After receiving numerous complaints from Irving-area high schools, the Irving Police Department identified Mr. Rosas and conducted 14 undercover buys of cocaine, methamphetamine, LSD, TCH and other drugs advertised on his account, including one from Mr. Rosas himself. They also negotiated with Mr. Rosas to purchase a black .40 caliber Beretta handgun, which an associate delivered to an undercover agent.

Mr. Rosas was arrested on Aug. 1, 2020, with a two-tone green and black Glock in his pocket. After his arrest, he made numerous phone calls to coconspirators, providing them with his account passwords to continue the advertisement and sale of illegal narcotics.

Three of Mr. Rosas’ coconspirators also pleaded guilty:

• Anthony Isaac Ventura, 20, pleaded guilty in March to conspiracy to possess with intent to contribute controlled substances and was sentenced in August to 57 months in federal prison.
• Addiel Isaias Portillo, 25, pleaded guilty in April to conspiracy to possess with intent to contribute controlled substances and was sentenced in yesterday to 36 months in federal prison.
• Uziel Hernandez, 26, pleaded guilty in April to conspiracy to possess with intent to contribute controlled substances. His sentencing hearing has been set for Oct. 7. 
   

At sentencing, prosecutors presented evidence that this group had been tied to violent crime in Irving and was involved in illegal firearm sales. They also knowingly employed several juveniles as young as 15 years old to sell drugs for them around the metroplex, and put the lives in danger by publishing on social media the names of individuals they believed to be cooperating with the government.

Irving Police Detectives testified at sentencing about the negative impact Mr. Rosas and his coconspirators had on the community and the importance of these arrests to the citizens of Irving.

The Irving Police Department conducted the investigation with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division. Assistant U.S. Attorney Myria Boehm prosecuted the case.

A former Lubbock Christian School president was sentenced today to 5 1/2 years in federal prison for possessing sexually explicit images of a child, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Larry Tye Rogers, 56, pleaded guilty in June to possession of child pornography. He was sentenced Thursday by U.S. District Judge James Wesley Hendrix.

According to plea papers, Rogers admitted that in October 2020, his wife caught him surreptitiously taking photographs of a 15-year-old girl as she was naked in the bathroom preparing to shower. Rogers, who was found on his hands and knees holding his iPhone under the opening at the bottom of the door, admitted to his wife that he’d taken several photos and videos of the child in the bathroom.  He later admitted his intended focus was the child’s genitals and pubic area, and that the images were designed to elicit a sexual response in Rogers. 

Shortly thereafter, a colleague confronted him about his conduct.  Rogers dropped his head and confirmed that he had taken photos of a minor female, and suggested that he should resign his position as president of Lubbock Christian School.

In addition to his sentence, Mr. Rogers will have to have to register as a sex offender.

The Lubbock Police Department, Federal Bureau of Investigation’s Dallas Field Office – Lubbock Resident Agency, and Homeland Security Investigations conducted the investigation.  Assistant U.S. Attorneys Stephen Rancourt and Callie Woolam prosecuted the case.

Texas oil-and-gas mogul Christopher A. Faulkner has been sentenced to 15 years in federal prison for bilking investors out of millions of dollars and concealing money from the IRS, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.

A frequent media commentator and self-proclaimed “frack master,” Faulkner, now 44, was arrested in June 2018 at the Los Angeles International Airport. He entered his first guilty plea in October 2018. After the judge declined to impose the binding 12-year sentence stipulated in the plea agreement, Faulkner withdrew his guilty plea. He entered a second guilty plea in December 2020 and was sentenced in September 2021 to 15 years in federal prison for securities fraud and attempted tax evasion. U.S. District Judge Jane Boyle also ordered him to pay $92.4 million in restitution to his victims.

According to plea papers, from 2011 to 2016, Faulkner raised more than $71 million from working interest investors, who took on a fixed portion of projected drilling costs in exchange for a share in his oil and gas profits.

But in marketing materials distributed to these investors, Faulkner inflated the estimated drilling costs by as much as 800 percent, allowing his three companies – Breitling Energy Corp., Crude Energy, LLC and Patriot Energy, Inc. – to pocket the difference between his projections and the actual cost of the wells. 

He also gave would-be investors a “Geology Report,” ostensibly prepared by an independent expert, estimating future production for each well. Unbeknownst to them, the report was generated by a geologist on Faulkner’s payroll who consistently overstated the wells’ potential.

Faulkner routinely oversold shares, then transferred investment funds into comingled accounts despite promising investors their money would be deposited in a segregated bank account used only to pay for drilling activities.

Over a five-year period, he admits, he diverted approximately $23 million for his own personal benefit, shelling out hundreds of thousands of dollars at a time for luxury travel, professional concierge services, maintenance of multiple residences, and at least seven vehicles, including an Aston Martin, a Bentley, and a Mercedes Benz. During that time, his companies paid out just $6.2 million to investors, according to the criminal complaint filed in June.

Moreover, in 2014, Faulkner says, he concealed at least $3.7 million in taxable income from the federal government, failing to file a return or pay income tax.                                                  

Faulkner previously settled with the Securities & Exchange Commission (SEC), which filed a complaint in June 2016 alleging multiple violations of federal securities laws. Faulkner’s settlement with the SEC ordered him to disgorge $23.8 million; permanently enjoins him from violating, among other things, the antifraud provisions of the federal securities laws and from participating in any unregistered securities transactions; and, bars him from serving as an officer or director of any SEC-reporting company and from participating in any offering of a penny stock.

The Internal Revenue Service – Criminal Division, Federal Bureau of Investigation, and U.S. Postal Inspection Service conducted the criminal investigation. Assistant U.S. Attorneys Marcus Busch, Katherine Miller, Mark Tindall (now a Western District of Texas AUSA), Christopher Stokes (fmr) and Ryan Raybould (fmr) prosecuted the criminal case.

Jennifer Lynne Faith, the Oak Cliff woman whose boyfriend allegedly shot her husband to death, has been charged with orchestrating the murder, Acting U.S. Attorney for the Northern District of Texas Prerak Shah announced today.

Ms. Faith, 49, was charged Tuesday via superseding indictment with use of interstate commerce in the commission of murder-for-hire, a charge that carries a potential death penalty. She was previously charged with obstruction of justice, to which she entered a plea of not guilty.  

Ms. Faith’s boyfriend, Darrin Ruben Lopez, 49, allegedly gunned down her husband, American Airlines technology director Jamie Faith, on Oct. 9, 2020 in front of his home in Oak Cliff. Mr. Lopez was previously charged by the state with murder and by the feds with a gun crime, to which he also entered a plea of not guilty.

Court documents unsealed today allege that Ms. Faith used two phony email accounts to correspond with Mr. Lopez, assuming the identities of her own husband and one of her friends in order to falsely convince Mr. Lopez that her husband was physically and sexually abusing her.

“Ms. Faith’s alleged murder-for-hire scheme was depraved and calculated. She preyed on her boyfriend’s protective instinct and his pocketbook in order to convince him to execute her husband,” said Acting U.S. Attorney Prerak Shah. “Jamie Faith’s brutal murder was a tragedy. His death has been a double blow to his family and friends, who had just begun to absorb the news of his murder when they were confronted with evidence of his wife’s alleged involvement. We are committed to getting justice for Jamie – and to holding both Ms. Faith and Mr. Lopez accountable for their alleged crimes.”

“Although the indictment of Ms. Faith is a win for law enforcement, I can’t help but think of the pain associated with so many others in this investigation. ATF is grateful to the Dallas Police Department for their dogged efforts in bringing this case to justice. ATF will not waver in its fight against violent crime in North Texas and beyond,” stated ATF Dallas Special Agent in Charge Jeffrey C. Boshek II.

According to the superseding indictment, Ms. Faith allegedly created the fake Gmail account in her husband’s name on April 9, 2020. Posing as Mr. Faith, Ms. Faith emailed Mr. Lopez multiple times during the spring and summer of 2020, taunting Mr. Lopez with details of extreme physical and sexual abuse that had never actually occurred. (Investigators have found absolutely no evidence of domestic or sexual violence by Jamie Faith.) Ms. Faith repeatedly attached fake photos of injuries as bogus proof of the abuse.

“I am telling you to stay away from my family,” she wrote in an email to Mr. Lopez on April 10 while posing as Mr. Faith.

“Enjoy knowing you can’t do a [expletive] thing about it,” she wrote in another email to Mr. Lopez on May 9, attaching close-up photos of purported injuries.

Ms. Faith allegedly created the fake Gmail account in her friend’s name on May 13. Posing as that friend, Ms. Faith sent multiple emails to Mr. Lopez’s personal email account falsely claiming that Mr. Faith was physically and sexually abusing her. Ms. Faith downloaded stock images of injuries from the internet and attached those images to her emails.

“Jamie slapped Jen … then he sent the pic of him choking her,” she wrote in an email to Mr. Lopez on May 13 while posing as her friend. “I am asking if you are willing to get involved and help Jen get out of this situation.”

“Jamie is abusing Jen today,” she wrote in another email to Mr. Lopez. “Any ideas how we can help her?”

“I know I won’t feel better about her situation until she is out of the house away from him or she lets me put a bullet in Jamie’s head,” Mr. Lopez replied by email on May 20.  

“I am also very concerned and if it were up to me, I would tell you to go for it with your idea --- lol; I’ll give you an alibi,” Ms. Faith responded, still posing as her friend.

“Darrin, I talked to Jenn – he’s burning her, among other things,” she continued in another email sent to Mr. Lopez on July 26.

On Oct. 8, Mr. Lopez allegedly drove from his home in Cumberland Furnace, Tennessee, to the Faiths’ home in Dallas, where he laid in wait until the early morning hours of Oct. 9. When Mr. and Ms. Faith emerged from their home to walk the family dog, Mr. Lopez allegedly approached Mr. Faith from behind and shot him seven times – three times in the head, three times in the torso, and one time in the groin – before fleeing the scene in his black Nissan Titan pickup truck with a distinctive “T” decal on the back window.

In the days following the murder, the pair exchanged multiple text messages about removing the decal from Mr. Lopez’s truck – messages they later attempted to delete.

On Oct. 10, an associate of Ms. Faith created a GoFundMe account to raise money for the deceased’s family. Ms. Faith allegedly withdrew approximately $58,000 from the fund, which she used to pay for purchases made on two credit cards she gave to Mr. Lopez. She also used the credit cards to pay for expenses for Mr. Lopez and his family, purchase airline tickets for Mr. Lopez and his daughters, and pay FedEx to ship Mr. Lopez a large screen television.

On Nov. 11, Ms. Faith initiated a life insurance claim seeking approximately $629,000 in death benefits from Met Life. She repeatedly updated Mr. Lopez as to the status of the claim:

“Ok, so life insurance. They aren’t processing the claim yet because when they spoke to Det Walton in November, he told them I couldn’t be ruled out as a suspect,” she texted Mr. Lopez (as herself) on Dec. 29.

“Oh no,” Mr. Lopez texted back.

On Jan. 10, 2021, law enforcement agents asked Ms. Faith to come in for an interview. She immediately texted Mr. Lopez in Tennessee:

“Detective called. He wants me in for an interview tomorrow. He said he wants to go over the investigation and go through some things to start moving things forward.  I’m a ball of nerves now,” she wrote.  

“You don’t need to be,” Mr. Lopez responded. “Just keep saying what you have been … you will be fine.”

“If asked about you, you are an old friend going through a divorce,” Ms. Faith replied. “Don’t text me Monday, I am going to factory reset my phone on Sunday night after deleting texts. Just thinking in case they pulled phone records and ask.”

On Jan. 11, Mr. Lopez was arrested in Cumberland Furnace, Tennessee. Law enforcement agents located the .45 caliber handgun used to kill Jamie Faith inside a satchel in Mr. Lopez’s residence. Jamie Faith’s blood was recovered on the firearm.  

The following week, Ms. Faith allegedly transferred a total of $118,00 from her checking account into an account belonging to a third party. A few days later, she asked another individual to transmit a message to Mr. Lopez:

“I’ve just needed to be cautious because every communication is being monitored,” she said. “Please tell him ASAP that I will always be his.”

“Please stay strong for US,” Mr. Lopez, who was in custody, responded via the individual. “Your knight always.”

Indictments are merely allegations of criminal conduct, not evidence. Like all defendants, both Ms. Faith and Mr. Lopez are presumed innocent until proven guilty in a court of law.

If convicted, Ms. Faith faces up to life in federal prison, and could be subject to the death penalty. Mr. Lopez faces up to 10 years in federal prison on the firearm charge and up to life in a state penitentiary on the Dallas County murder charge.

The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division and the Dallas Police Department’s Homicide Unit conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office, Homeland Security Investigations, the Tennessee Bureau of Investigation, and the U.S. Attorney’s Office for the Middle District of Tennessee. NDTX Assistant U.S. Attorney Rick Calvert, Assistant U.S. Attorney Andrew Briggs and Assistant U.S. Attorney Brian McKay are prosecuting the case.

A Dallas lawyer pleaded guilty today to conspiring to launder money he believed was linked to narcotics trafficking, announced Acting U.S. Attorney Prerak Shah.

Rayshun Jackson, the 52-year-old defense attorney at the helm of The Jackson Law Firm, was arrested in April. On Wednesday, he pleaded guilty to conspiracy to launder money before Chief U.S. District Judge Barbara M.G. Lynn.

“As an attorney, Mr. Jackson swore an oath to uphold the rule of law – an oath he violated completely when he conspired with purported drug traffickers to commit a federal offense,” said Acting U.S. Attorney Prerak Shah. “Street-level dealers may be the most conspicuous sign of our nation’s drug epidemic, but the men and women who launder the profits are no less culpable. The drug trade would die if it weren’t lucrative. Mr. Jackson attempted to profit off the backs of addicted individuals, and we are gratified to bring him to justice.”

“Money launderers, like Mr. Jackson, complete the circle of drug trafficking by returning ill-gained profits to criminal organizations,” said DEA Dallas Special Agent in Charge Eduardo A. Chávez.  “As a defense attorney, Mr. Jackson disregarded his oath to promote respect and confidence in the legal profession. Today’s plea reflects that nobody is above DEA’s reach, especially those who swore to defend the rule of law.”

In plea papers, Mr. Jackson admitted to laundering $380,000 for an individual he believed was a drug trafficker, but was actually an undercover DEA agent.

He was introduced to the agent on Sept. 3, 2020 by “Person A,” the leader of a large-scale opioid distribution ring known to deal in illegally diverted narcotics.  After Person A vouched for each individual’s credibility, Mr. Jackson and the undercover agent discussed how the attorney could “clean” the agent’s “dope money.”

Mr. Jackson advised the agent that he could launder around $500,000 a month by funneling it through non-traceable cash businesses (i.e., coin laundries, car washes) and shell corporations. He agreed to use his firm’s bank accounts, as well as charitable bank accounts established for providing legal services to indigent persons, to transfer the money into and out of the undercover agent’s bank account.

“Ray is the bomb... He’s a thug, he’s just got a law degree,” Person A told the undercover agent after the meeting, according to court documents.

Three weeks later, the undercover agent delivered a black backpack stuffed with $100,000 cash to Mr. Jackson at his office. The attorney agreed to launder the money in return for 5% cash up front. After depositing the remaining $95,000 into his various bank accounts in various amounts on various days, he eventually transferred the entire sum into the DEA’s undercover bank account.

The next month, the undercover agent delivered an additional $300,000 cash to Mr. Jackson at his office. Again, the attorney agreed to a 5% up-front fee in return for laundering the money. After depositing the remaining $285,000 into his various bank accounts in various amounts on various days, he eventually transferred the same amount into the DEA’s undercover bank account.

In plea papers, Mr. Jackson admitted he knew of the unlawful purpose of the agreement and joined in it willingly.

Per his plea agreement, he now faces five years in federal prison and a forfeiture money judgment of $20,000 (an amount equal to the amount he collected in fees from the undercover agent).  According to the Texas State Bar’s compulsory discipline policy, he will likely be stripped of his law license.

The Drug Enforcement Administration’s Dallas Field Office conducted the investigation with the assistance of  IRS – Criminal Investigations and the Dallas Police Department. Assistant U.S. Attorney Courtney Coker, the Northern District of Texas’ Deputy Criminal Chief, is prosecuting the case along with Assistant U.S. Attorneys Juanita Fielden and Nashonme Johnson. 

Three alleged drug traffickers in Pampa, Texas – including the alleged local president of the Bandidos motorcycle gang – have been charged with gun and drug crimes, announced Acting U.S. Attorney Prerak Shah.

Tracey Dylan Cain, 31, Jason Mulenax, 43, and Erik Gutierrez, 23, were charged via criminal complaint with possession with intent to distribute controlled substances and possession of firearms in furtherance of drug trafficking crimes. All three defendants made their initial appearances before U.S. Magistrate Judge Lee Ann Reno in Amarillo Monday afternoon. The federal government has moved to detain them based upon dangerousness and risk of flight.

According to court documents, the men were arrested Friday during searches of their respective residences.

Inside Mr. Cain’s home, law enforcement recovered large amounts of cocaine, methamphetamine, LSD, ecstasy, and marijuana, large amounts of U.S. currency, and numerous firearms, including a gold-plated .50 caliber pistol with a handmade suppressor. Prior to the search, Mr. Cain barricaded himself inside his home and refused to cooperate with officers.

Inside Mr. Gutierrez’s home, law enforcement recovered a powdery substance believed to be cocaine, a 10mm Glock pistol, and approximately $6,000 in cash. Inside Mr. Mulenax’s home, they recovered a green leafy substance believed to be marijuana, seven firearms, drug paraphernalia, and approximately $1,098 in cash.

During interviews, both Mr. Gutierrez and Mr. Mulenax admitted to selling drugs and named their supplier as Mr. Cain.

Law enforcement previously identified Mr. Mulenax as the alleged local president of the Bandidos, one of the nation’s most dangerous organized motorcycle gangs. The organization’s former national president, Jeffrey Fay Pike, was convicted of drug trafficking, racketeering, and other violent crimes in federal court in San Antonio in 2018 and later sentenced to life plus ten years in federal prison.

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

If convicted, these men face up to life in federal prison.

The Federal Bureau of Investigation’s Dallas Field Office and the Texas Department of Public Safety conducted the investigation with help from the Drug Enforcement Administration, the Pampa Police Department, and the Gray County Sheriff’s Office. Assistant U.S. Attorney Anna Marie Bell is prosecuting the case.

The United States Attorney’s Office for the Northern District of Texas is seeking individuals who were trafficked on CityXGuide, a commercial sex website shut down by the federal government in June 2020, announced Acting U.S. Attorney Prerak Shah. 

Prosecutors are requesting that victims — who are afforded rights under the Crime Victims’ Rights Act (CRVA) and may be eligible for restitution — visit https://www.justice.gov/usao-ndtx/united-states-v-wilhan-martono-cityxguide to submit their information.

The U.S. Attorney’s questionnaire will allow victims to outline any physical or mental health injuries they sustained as a result of human trafficking (information that is critically important to request court-ordered victim compensation at sentencing) and to share their thoughts on the sentence the judge should impose on CityXGuide owner Wilhan Martono.

Mr. Martono, 47, was arrested on June 19, 2020, the same day his websites were seized by the U.S. Department of Homeland Security.  He pleaded guilty on Aug. 24, 2021 to one count of promotion of prostitution and reckless disregard of sex trafficking and one count of conspiracy to engage in interstate transportation in aid of racketeering enterprises - facilitating prostitution.  His plea is the first ever entered under the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA), a 2018 law that allows the federal government to prosecute websites that facilitate sex trafficking.

In plea papers, Mr. Martono admitted that he created, owned, and operated CityXGuide and a suite of related websites.  He registered the domain names for several of the sites on April 8, 2018 — just one day after the feds shut down Backpage.com, then the internet’s leading source of commercial sex advertisements. Like Backpage, Mr. Martono’s sites allowed users, including traffickers, to post hundreds of thousands of commercial sex advertisements worldwide.

Mr. Martono admitted that he turned a blind eye to the illegal sex trafficking occurring on CityXGuide.  Despite receiving numerous emails from federal, state, and local law enforcement informing him that CityXGuide and its companion websites were being used to facilitate sex trafficking and child exploitation, he continued to operate those sites in the United States and around the world.  In court documents, prosecutors estimated that Mr. Martono netted more than $21 million off his websites, which users described as “taking over from where Backpage left off.”

Law enforcement has already identified numerous trafficking victims in CityXGuide advertisements, including a 13-year-old Jane Doe identified in North Texas in November 2019 and a 16-year-old Jane Doe identified in North Texas in March 2020.  Prosecutors are engaged in an ongoing effort to notify all survivors of sex trafficking who were advertised on CityXGuide.

Potential victims include minors who were advertised on Cityxguide.com or a related website (including Cityxguide.net, Cityxguide.co, Cityxguide.be, Bodyrubshop.com, CAPleasures.com, or Backpage.co), as well as adults subjected to force, threats of force, fraud, and/or coercion at the time they were advertised on CityXGuide or a related website. Individuals do not need to reside in the Northern District of Texas to be considered victims in this case. 

Under the CVRA, victims are entitled to reasonable, accurate, and timely notice of public court proceedings, the right to be treated with fairness and respect for their dignity and privacy, and the right to be reasonably heard at any public sentencing proceeding. For a more detailed description of victims' rights under the law, click here.  

The North Texas Trafficking Task Force conducted the investigation, led by Homeland Security Investigations’ Dallas Field Office, the United States Secret Service, and the Colleyville Police Department, with assistance from HSI’s El Paso and San Jose Field Offices as well as the Texas Department of Public Safety.  Assistant United States Attorneys Sid Mody, Rebekah Ricketts, and John de la Garza are prosecuting the case.

A Grand Prairie man who sexually exploited two six-year-old girls has been sentenced to 430 months in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Juan Navarro, Jr., 38, pleaded guilty in January to sexual exploitation of a child and possession of child pornography. He was sentenced Thursday by U.S. District Judge Mark Pittman.

In plea papers, Mr. Navarro admitted that in 2019, he enticed a female child into engaging in sexually explicit conduct for the purpose of producing images of such conduct. He also admitted that he stored multiple sexually explicit images of children on his cell phone.  

According to court documents, the investigation began when Yahoo reported to the National Center for Missing and Exploited Children (NCMEC) that one of their email clients had uploaded child pornography. Law enforcement traced the email account in question to Mr. Navarro.

During a search of his residence, agents found a Samsung Galaxy phone containing multiple images of child pornography, including several images of little girls that appeared to have been created on the phone. In interviews with law enforcement, Mr. Navarro admitted that he sometimes emailed himself child porn, but initially denied knowing the girls.

However, the children’s mother confirmed that her daughters knew Mr. Navarro, and recognized the seat of his car in the images of her daughters, who have since received appropriate psychological and medical care.

“My girls are not physically here, but I am. I’m hear so my voice can be their voice and the voice of all of those other innocent victims,” their mother testified at sentencing. “We need our voices to be heard.”

The Federal Bureau of Investigation’s Dallas Field Office and the Grand Prairie Police Department conducted the investigation. Assistant U.S. Attorney Brandie Wade prosecuted the case.

The owner of a for-profit trade school has been sentenced to more than 19 years in federal prison for bilking the U.S. Department of Veterans Affairs of $72 million and of misleading student veterans, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

In April, a federal jury convicted Jonathan Dean Davis, the 43 year-old owner of Retail Ready Career Center, of seven counts of wire fraud and four counts of money laundering. He was sentenced Wednesday by U.S. District Judge Brantley Starr, who also ordered him to pay $65.2 million in restitution. In addition to paying restitution, Mr. Davis will be required to forfeit $72.5 million to the federal government.

The defendant had been remanded into custody immediately following conviction, and was remanded back into custody after his sentencing hearing.

“A jury found that Mr. Davis lied to multiple government agencies, lining his pockets with veterans’ GI Bill benefits even as they were struggling to scrape by,” said Acting U.S. Attorney Prerak Shah. “Mr. Davis’ crimes were a slap in the face to the sacrifices made by our servicemembers, and we are proud to put him behind bars for such a significant period of time.”

According to evidence presented at trial, Mr. Davis marketed Retail Ready’s six-week HVAC training course to veterans whose tuition and fees would be covered by the Veteran’s Educational Assistance Act of 2008, also known as the post-9/11 GI Bill. The defendant, who was essentially broke at the time of the crime, realized that he could charge $18,000 to $21,000 per student for the six-week course, if only he could get approval from the VA to accept GI Bill payments for tuition – which required prior approvals from the Texas Workforce Commission (TWC) and the Texas Veterans Commission (TVC).

These agencies required applicants to certify that they were not personally facing any criminal or civil actions, and to prove that their schools were established educational institutions in stable financial condition. Knowing he could not meet these requirements, Mr. Davis repeatedly lied and concealed information from these agencies.

“Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order,” Mr. Davis wrote in an electronic journal he kept on his computer, which was recovered by federal agents during a search of Retail Ready. The journal became a key piece of evidence at trial.

Mr. Davis assured the TWC that he was not subject to any civil actions, when, in fact, he was facing numerous civil judgments over unpaid debts. He also told the TWC that he was not facing any criminal charges, when, in fact, he had a pending felony charge for theft of services.

Mr. Davis told the TVC that Retail Ready had been operating as a school for two years, when, in fact, the company had only existed for a few months and had never trained any students. He claimed that Retail Ready was fully prepared to train veterans, when, in fact, the company lacked a building and basic supplies.  He even lied to an independent accountant about the school’s financial condition, and then submitted false financial statements to both the TWC and the TVC.

Eventually, based upon Mr. Davis’ lies to the TWC and TVC, the VA accepted Retail Ready’s application, allowing Mr. Davis to charge veterans’ tuition and fees to the VA under the GI Bill.

In 2014, he began recruiting student veterans, promising to prepare them for lucrative careers in the heating and air conditioning industry. Upon entering the workforce, however, many of these veterans discovered that Retail Ready had failed to teach them many of the basic skills necessary for entry-level technician jobs.

Several veterans testified at trial that they had relied on the Retail Ready’s fraudulently obtained VA endorsement and were sorely disappointed about their post- Retail Ready career prospects and pay. They were also shocked to learn of the rate at which Retail Ready’s six-week course had drained their GI Bill benefits, testifying that they felt “used,” “taken advantage of,” “deceived,” and “bamboozled.”

Even as his veteran graduates struggled to make ends meet, Retail Ready collected more than $72 million in GI Bill benefits from the VA.  Using the proceeds of his fraud, Mr. Davis purchased a $2.2 million home in Dallas, a $428,000 Lamborghini, a $280,000 Ferrari, and a $260,000 Bentley, among other things.

The VA’s Office of Inspector General conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the United States Postal Inspection Service’s Fort Worth Field Office.  Assistant U.S. Attorneys Douglas Brasher and Fabio Leonardi are prosecuting the case, and Assistant U.S. Attorney Dimitri Rocha is handling forfeiture. U.S. District Judge Brantley Starr presided over the trial.

A man who detonated an explosive device under a bridge in Bedford, Texas has been sentenced to 46 months in federal prison, announced Acting U.S. Attorney Prerak Shah. 

Nicholas Lloyd Nelson, 38, pleaded guilty in June to possession of a destructive device. He was sentenced earlier this month by U.S. District Judge Reed C. O’Connor. 

According to court documents, law enforcement responded to an explosion in Bedford, Texas at 4:35 p.m. on April 7, 2021. 

Upon arriving at the scene, bomb technicians saw a crater beneath a bridge on Forest Ridge Drive. Next to the crater, they observed explosive components, including a speaker wire and container debris. They also found an un-detonated explosive device along the roadway and performed a controlled detonation. 

Witnesses told law enforcement they’d noticed a young, white man emerge from under the bridge just after the explosion. Based on their descriptions and prior experience with the defendants, officers located Mr. Nelson. 

At his home, they found components that could be used to assemble explosive devices. They also identified Mr. Nelson in dozens of YouTube videos posted by the account “Improvised Chaos” that showed him manufacturing and detonating explosive devices. 

In plea papers, Mr. Nelson admitted to detonating the unregistered device under the bridge. In interviews, he told law enforcement he’d constructed the bombs with potassium perchlorate, an substance commonly used in pyrotechnics, munitions, and explosives. 

The Federal Bureau of Investigation’s Dallas Field Office and the Bedford Police Department conducted the investigation with the assistance of the Bedford Fire Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division. Assistant U.S. Attorney Jay Weimer prosecuted the case.

Acting United States Attorney for the Northern District of Texas Prerak Shah announced today that he will be resigning from the Justice Department effective October 1.

“It has been the honor of a lifetime to serve the 8 million people of North Texas as Acting United States Attorney,” Mr. Shah said. “I was privileged to work with not only the best federal prosecutors in the nation, but to work side-by-side with peerless federal, state, and local law enforcement partners. I am proud to have played a part in this office’s proud legacy of pursuing justice and liberty for all.”

Mr. Shah was named the Acting United States Attorney on January 10, 2021, after previously serving as the First Assistant United States Attorney. The Northern District covers 100 counties, more than 96,000 square miles, and a population of approximately eight million people. Mr. Shah led a staff of approximately 250 people across five division offices and was responsible for all federal criminal prosecutions and civil litigation involving the United States in his district. Under his leadership, the office advanced a number of Justice Department priorities, from violent crime and cybersecurity to corporate fraud and False Claims Act enforcement.

Mr. Shah’s team prosecuted a would-be bomber allegedly plotting to attack Amazon, brought down an $18 million pill mill scheme, and secured a conviction against a real estate developer for bribing two members of the Dallas City Council. The office also successfully tried a trade school owner for operating a $72 million fraud scheme, convicted two men who concealed a capital murder suspect who was on the FBI’s “10 Most Wanted” list, prosecuted an ADT technician for hacking into over 200 customers’ video feeds, and obtained over $22 million through a deferred prosecution agreement with a multinational medical device corporation. They expanded their partnerships with state and local law enforcement, resulting in several successful multi-agency operations that have helped stem the rise of violent crime in North Texas.

The office ran a number of investigations involving cryptocurrency, including extraditing a Serbian national charged with duping crypto investors out of $70 million, obtaining a five-year sentence for the founder of “AriseCoin” for securities fraud, and convicting a man going by the moniker “Dr. Bitcoin” for an illegal cash-to-crypto scheme.

On the civil side, the Northern District resolved a number of False Claims Act matters, including securing a $3.3 million settlement from a hospital, obtaining a $3.1 million settlement from dental management companies, and filing a case against a dermatopathologist who allegedly accepted kickbacks from a lab company.

Prior to serving as Acting U.S. Attorney, Mr. Shah held multiple senior leadership roles at the Department of Justice in Washington, D.C., including Deputy Associate Attorney General in the office overseeing the civil and criminal work of the Department’s Antitrust, Civil, Civil Rights, Environment & Natural Resources, and Tax divisions. He also served as the Deputy Assistant Attorney General in charge of the Department’s Natural Resources Section, directly supervising approximately 75 trial lawyers in high profile environmental investigations and trials across the country. Before joining the Justice Department, Mr. Shah served as chief of staff and chief counsel to U.S. Senator Ted Cruz and served as the Senior Counsel to the Attorney General of Texas.

Mr. Shah is looking forward to his next chapter, in private practice in Texas.

A Dallas man who shot and injured two victims in Dallas has been sentenced to 17 ½ years in prison for a federal firearm offense, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Quentin Alonso Cordova, 23, pleaded guilty in June to two counts of being a felon in possession of a firearm. He was sentenced Tuesday to 210 months by Chief U.S. District Judge Barbara M.G. Lynn.

According to plea papers, Mr. Cordova – who has ten prior criminal convictions, including multiple felonies – admits that he committed two shootings in Dallas.

On Aug. 12, 2020, Mr. Cordova approached his first victim in the parking lot of a restaurant off Stemmons Freeway and shot the man in the leg with a 9mm Glock. He yanked a gold and diamond chain off the victim’s neck before fleeing the scene.

Two weeks later, on Aug. 28, 2020, Mr. Cordova approached his second victim in the parking lot of a cabaret on Reeder Road in Dallas. As the victim attempted to enter his vehicle, Mr. Cordova brandished a firearm and demanded that the victim turn over his belongings. When the victim attempted to flee, Mr. Cordova shot the man multiple times with another 9mm Glock, hitting him in the right arm and the right leg. The victim fell to the ground, and Mr. Cordova made off with his Rolex and a gold bracelet.

Using the National Integrated Ballistic Information Network, or NIBIN, federal agents were able to link fired cartridge casings left at the scenes of the two shootings to the guns possessed by Mr. Cordova.  

Mr. Cordova is also facing state charges for aggravated assault, aggravated assault with a deadly weapon, aggravated assault on a security officer, burglary of a vehicle, unlawful possession of a firearm by a convicted felon, theft of property, and evading arrest.

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

CORRECTION: An earlier version of this release erroniously stated the shooting on Reeder Road occurred on Aug. 20. It actually occurred on Aug. 28.  Reporters were promptly notified of the error. 

Five men who purchased jewelry stolen from traveling diamond salesman have been sentenced to a combined 190 months in federal prison and ordered to pay more than $7 million in restitution, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah. 

The men “fenced” jewels obtained in robberies committed by a so-called “South American Theft and Robbery Group (SATG)” — a violent criminal enterprise that targeted traveling jewelry salesman nationwide. 

• Romelio Rivieron, 51, who pled guilty in March 2020 to engaging in a conspiracy to launder money, was sentenced to 32 months in federal prison and ordered to pay $2,321,491.61 in restitution. He has already paid back approximately $230,000 towards victims of his crime.
   
• Co-conspirators Elkin Acosta Lopez, 46, and Harrinson Corredor, 29, who both pled guilty in 2019 to the same charge as Mr. Riveron, were previously sentenced to 68 months and 63 months, respectively. Mr. Corredor was ordered to pay $1,753,089 in restitution while Mr. Lopez was ordered to pay $1,368,088.68.
   
• Rubenhay Pinkhasov, 60, who pled guilty to engaging in 2019 to conspiracy to transport stolen goods in interstate commerce, was sentenced to 27 months in federal prison and ordered to pay $1,007,823 in restitution. 
   
• Yuri Alishaev, 49, who conspired with Mr. Pinkhasov, pled guilty to misprision (concealment) of a felony and was sentenced to probation; he has already paid the entirety of the $1,009,689 he owes in restitution. 
   

According to court documents, the men were involved in laundering money for a band of violent jewel thieves, including several who robbed a traveling jewelry salesman at gunpoint before beating him to death in Irving, Texas. 

In plea papers, Mr. Lopez admitted that he regularly flew from his hometown in Bogota, Colombia to Texas in order to meet up with the robbers to purchase stolen jewelry. He then traveled to New York City to melt down the jewelry before either arranging for its sale in the United States or returning to Colombia to sell it at his shop. In March 2018, special agents from the FBI Dallas Field Office’s Violent Crime Task Force arrested Mr. Lopez at a New York airport upon his entry into the country after his arrival from Bogota.

Mr. Corredor, a Queens, New York resident who went by the name “Mono,” admitted he connected Mr. Lopez with the robbers and helped broker the sales. On one occasion, he handed one of the robbers a bag of cash in exchange for several stolen Rolex watches. He admitted he knew the jewelry was stolen and took a portion of the illicit proceeds. 

Like Mr. Lopez, Mr. Riveron admitted he traveled from his home in Miami, Florida to Texas and other states in order to purchase stolen diamonds from the robbers. Knowing he could turn a profit by reselling the jewelry, he purchased items below market value, making upfront cash down-payments to the robbers and funneling subsequent cash payments through aiders and abettors in Colombia. 

Mr. Pinkhasov admitted that he helped move stolen diamonds across state lines, from Texas to Florida and to New York. Pinkhasov admitted to purchasing stolen diamonds and jewelry from Colombian SATG members twice in 2015.  

Mr. Alishaev, a prominent jewelry dealer in New York City’s West 47th Street Jewelry and Diamond District, admitted that he agreed to purchase stolen diamonds from Mr. Pinkhasov, who had acquired jewels worth over $1,000,000 from Colombian SATG members. 

Mr. Pinkhasov, who owned a jewelry store in Miami, sent the diamonds to Mr. Alishaev. The two men agreed to share the profits if they were fruitful. Shortly after receiving the jewels from Mr. Pinkhasov, Mr. Alishaev sent back $500,000 in cash. However, after the pair learned the FBI was investigating, they agreed to never speak about the matter again. 

Between 2016 and 2018, through multiple indictments, the U.S. Attorney’s Office for the Northern District of Texas charged a total of 20 SATG robbers who targeted traveling diamond and jewelry salesmen throughout the United States. All 20 have been convicted and sentenced.

The Federal Bureau of Investigation’s Dallas Field Office, Miami Field Office, and New York Field Office conducted the investigation. Assistant U.S. Attorneys Joe Magliolo and Ryan Raybould (fmr.) prosecuted the case against the fences with help from Assistant U.S. Attorney Keith Robinson, who prosecuted the Hobbs Act robbery case against the jewel thieves.  

A Lubbock dentist pleaded guilty in federal court today to one count of production of child pornography, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Jason Paul White, 42, was charged via criminal complaint in January and indicted the following month.  In August, prosecutors filed a superseding indictment against him alleging additional child pornography and enticement crimes involving seven victims over the course of 15 years. Mr. White pleaded guilty Monday before U.S. Magistrate Judge D. Gordon Bryant, Jr. 

According to plea papers, Mr. White admitted that in December 2009, he coerced a 17-year-old boy into engaging in sexually-explicit conduct in order to produce a video of that conduct. Over the next 11 months, Mr. White produced seven more sexually-explicit videos of the same child, which he uploaded to a Dropbox internet storage account. 

Law enforcement discovered the Dropbox account in January 2021, during a search of Mr. White's business and residence. The child later identified himself in the videos. Other victims came forward as well. 

Mr. White eventually admitted to producing sexually-explicit videos and enticing into sexual activity seven additional teenage boys, including one child not accounted for in the superseding indictment. 

The children, who were as young as 13 at the time of the crime, told investigators that Mr. White used the ruse of running a pornography film business to lure them into sexual activity. 

As a result of his plea, White faces a minimum sentence of 15 years and a maximum of 30 years in federal prison.  He will also be required to forfeit his interest in his home in Lubbock and a 966-acre ranch in Garza County, where he committed his crimes.  White will remain in custody pending his sentencing, which has not yet been set.

The Lubbock Police Department, the Federal Bureau of Investigation, Homeland Security Investigations, and the High Technology Investigative Unit within the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) investigated the case.  Assistant United States Attorney Callie Woolam and CEOS Trial Attorney Austin Berry are prosecuting the case.

A five-time felon found guilty of a gun crime was sentenced today to 27 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Following a two-day trial in March, a jury in Fort Worth convicted Abedel Sattar Alkheqani, 27, of being a felon in possession of a firearm and ammunition.  He was sentenced Tuesday afternoon by Senior U.S. District Judge Terry R. Means.

Due to his multiple prior felony convictions, Mr. Alkheqani received a sentencing enhancement under the Armed Career Criminal Act, which raises the maximum penalty for offenders with three previous convictions for a violent felony or serious drug offense. 

According to evidence presented at trial, Mr. Alkheqani was arrested in March 2020, after officers with the Arlington Police Department identified him as a suspect in a shooting that occurred in a residential neighborhood in Arlington, Texas.

Witnesses told law enforcement that the suspect exited a pickup truck, pistol in hand, and fired three times as the victim tried to flee. The victim was struck multiple times and hospitalized, but ultimately recovered.

Based on witnesses’ descriptions of the suspect’s truck as well as surveillance video, officers were able to locate the truck used in the shooting approximately a half-mile from the scene.  They determined the truck was registered to Mr. Alkheqani and noted that he matched witnesses’ descriptions of the shooter.

When officers pulled Mr. Alkheqani over a few hours later, they discovered marijuana in his jacket pocket and arrested him for possession. He then gave written consent for officers to search his home and vehicle.

During the search of Mr. Alkheqani's truck, law enforcement recovered a single round of 9mm caliber ammunition, which matched the manufacturer and caliber of the shell casings recovered at the shooting scene. At his residence, they recovered a .22 caliber rifle beside his bed and a magazine containing ammunition for the rifle within arm’s reach.

Mr. Alkheqani told officers that the rifle was his wife’s, but in recorded jailhouse calls, Mr. Alkheqani asked his wife, “is my rifle still there?” before correcting himself and stating, “I mean your rifle.” 

Forensic analysis later revealed that gunshot residue was recovered from Mr. Alkheqani’s body on the day of the shooting.

A query of Mr. Alkheqani's criminal history revealed five prior felony convictions, including four for burglary of a habitation – all offenses that made it a federal crime for him to possess a firearm or ammunition.

The Arlington Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division conducted the investigation. Assistant U.S. Attorneys Levi Thomas and Frank Gatto tried the case.

Forty defendants – including 15 arrested in Wednesday’s “Operation Taste the Rainbow” in Lubbock – have been charged with gun and drug crimes, announced Acting U.S. Attorney Prerak Shah.

The men and women, all allegedly tied to methamphetamine trafficking in and around Lubbock, have been charged in a series of three indictments with an array of federal crimes, primarily distribution of methamphetamine, unlawful possession of firearms, and conspiracy. They began making their initial appearances in federal court on Friday morning. 

In bringing these charges, the United States Attorney’s Office focused on bringing to justice Lubbock’s most violent recidivists. Between them, the 40 defendants have been previously charged with 32 assaults, nine burglaries, three robberies, a murder, 24 firearm crimes, 69 serious controlled substance violations, three terroristic threats, a forgery, 12 frauds, and a child sexual assault.

In an effort to keep the community safe, FBI’s Dallas Field Division, the Texas Department of Public Safety, and their federal, state, and local law enforcement partners deployed nearly 200 personnel to execute Wednesday’s operation, which resulted in the arrest of 15 defendants. Meanwhile, agents served federal arrest warrants on an additional 20 defendants already behind bars. The remaining five defendants charged remain fugitives. Members of the public are encouraged to contact law enforcement at 1-800-CALL-FBI (225-5324) with tips.

Fugitives include:

•             Oscar Alcala Jr. (believed to be in Lorenzo)

•             Alexandra Cruz (believed to be in Lorenzo)

•             Bobby Joe “Ace” Garcia (believed to be in Lubbock)

•             Christopher Eldon “Skittles” Limbaugh (believed to be in Littlefield)

•             Christopher Joshua Ruiz (believed to be in Lubbock)

 

Those arrested Wednesday morning include:

•             Alexandria Unique Conner

•             Kelsey Marie Applegate

•             Ruby Alexis Banuelos

•             David Bustos, Jr.

•             Teresa Delhierro

•             Sergio Lopez

•             Christopher Ray Lovington

•             Madison Whitney Michaels

•             Katie Dshawn Montez

•             Stephanie Shea Ortiz

•             Adriana Pena

•             Julie Ann “Juicy” Sifuentes (arrested in San Antonio)

•             Colten Shane White

•             Toby Mack Woods

•             Michael Joseph Ybarra

 

Those served with federal warrants while already in custody include:

•             Mark Adam “Cinco” Alonzo

•             Beatrice Delgado

•             Yesenia Flores

•             Christopher Daniel Garcia

•             James Raul Garza

•             Austin Tyler Grant

•             Megan Francisca Gomez

•             Bobbi Jean Hendrix

•             Isaac Levi Hernandez

•             Jesse “J.J.” Martinez, Jr.

•             Robert Rangel, Jr.

•             Symon Anthony Maldonado

•             Alejandro Antonio “Ace” Mendez

•             Gabriel Lee Mendoza

•             Megan Francisca Gomez

•             Daniel Ramon, Jr.

•             Edilberto “Bird” Reyes

•             Samantha Denise Rodriguez

•             Jessie Luciano “Lucky” Salazar

•             Gerald Felipe “Gizmo” Vargas

 

“This was a victory for the rule of law in Lubbock. Dozens of criminals, and their guns, and their drugs were removed from the streets in a matter of hours, and the community is safer because of that,” said Acting U.S. Attorney Prerak Shah.  “We zeroed in on the men and women who are driving up the city’s crime rates – the ones that are most responsible for the uptick in violent crime. Federal authorities are committed to partnering with state and local law enforcement to remove the worst criminal elements from this community, and we don’t plan to rest until we’re done.”

“The FBI’s criminal investigative focus is on targeting the overall leadership of gangs and criminal enterprises that drive violence in American communities,” said FBI Special Agent in Charge Matthew J. DeSarno. “Through our law enforcement partnerships and task forces we’re sending a loud and clear message to violent criminals that we will deploy our collective strength to ensure the safety and security of our neighborhoods and communities. In today’s world, the threats we face are too diverse, too dangerous, and too all-encompassing for any of us to tackle alone.”

“This is an excellent example of a law enforcement officer's daily commitment to fulfill their sacred duty of serving and protecting. The Texas Department of Public Safety values the importance of the teamwork displayed during this successful operation with our city, county, and federal partners in achieving the common objective of providing safer communities for the citizens of the great State of Texas,” said Texas Department of Public Safety Regional Director Joe Longway.

Indictments are merely allegations of wrongdoing, not evidence. All defendants are presumed innocent until proven guilty. If convicted, many of these defendants would face decades-long sentences. 

The Federal Bureau of Investigation’s Dallas Field Division – Lubbock Resident Agency and the Texas Department of Public Safety conducted the investigation with the help of six agency partners: the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division, the Lubbock Police Department, the U.S. Marshals, the Lubbock County Sheriff’s Office, the Drug Enforcement Administration’s Dallas Field Division, and Homeland Security Investigations. Assistant U.S. Attorney Sean Long is prosecuting the case.

A San Diego man who allegedly murdered his boyfriend in Hale County, Texas is now facing a federal interstate domestic violence charge, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

On Wednesday, a federal grand jury returned a one-count indictment against 23-year-old Alexander Yoichui Duberek, changing interstate domestic violence.  Mr. Duberek, wo is currently in state custody on a related murder charge, is expected to make his initial appearance in federal court next week.

According to the indictment, Mr. Duberek allegedly traveled across state lines with intent to kill his dating partner, identified in court documents as “John Doe,” on Oct. 31, 2020. 

The state alleges that Mr. Duberek then stabbed to death his 30-year-old boyfriend, whose body was later found on the side of FM 400 the following day.

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

If convicted of the federal charges, he faces a sentence of up to life in federal prison.

The Texas Rangers and the Hale County Sheriff’s Office conducted the investigation with the assistance of the Texas Department of Public Safety and the Federal Bureau of Investigation’s Dallas Field Office. Assistant U.S. Attorney Callie Woolam is prosecuting the case.  

A volunteer firefighter who stored child pornography on his fire department tablet was sentenced today to more than 12 ½ years in federal prison, announced Acting U.S. Attorney Prerak Shah.

Justin David Musgraves, 39, pleaded guilty in May to possession of pornography involving a prepubescent minor. He was sentenced today to 151 months in federal prison by U.S. District Judge James Wesley Hendrix, who also ordered him to pay $57,000 in restitution to eight victims identified by the National Center for Missing and Exploited Children as known victims of child sexual abuse imagery, $17,000 to the Amy, Vicky, and Andy Child Pornography Victim Assistance Act’s reserve fund, and $5,000 to the Justice for Victims of Trafficking Act’s victim services fund ($79,000 total).

According to plea papers, Mr. Musgraves, Lubbock’s Deputy Director of Emergency Management and a Shallowater Fire Department volunteer, admitted he possessed sexually explicit images of children as young as two years old.

Per court documents, the investigation began after Mr. Musgraves brought his SFD tablet to University Medical Center for a navigation software install. Concerned by the files they spotted, EMS employees immediately reached out to law enforcement.

Officers conducted a forensic examination of the tablet and found more than 5,000 photos and 1,500 videos of child pornography stored on the hard drive. Mr. Musgraves later admitted that he used the tablet to access child pornography while on the clock at the City of Lubbock Operations Center.

At his sentencing hearing, prosecutors noted that Mr. Musgraves meticulously sorted the files into folders and sub folders, mostly organized by victim. One folder was titled “TO UPLOAD.” It remains unclear how the defendant obtained his collection or where, if anywhere, he intended to upload his files.

The Texas Rangers and Homeland Security Investigations conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the complete cooperation of the City of Lubbock and the Shallowater Fire Department. Assistant U.S. Attorney Callie Woolam prosecuted the case.

A New Mexico man who allegedly sold an undercover agent four “ghost guns” has been charged with drug and gun crimes, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Isaiah Dante Moreno, 25, and codefendant Elias Ignacio Sisneros, 22, were indicted on September 8, 2021 for possession of unregistered firearms, possession of firearms in furtherance of a drug trafficking crime, conspiracy to distribute and possess with intent to distribute tetrahydrocannabinols (THC) and distribution of THC.  

According to court documents, the defendants allegedly sold a DEA task force officer four fully-automatic, AR-style firearms and a pound of THC wax during an undercover buy in Lubbock, Texas.

During the buy, Mr. Moreno allegedly explained to the agent that he had helped manufacture the firearms, making them “ghost guns,” unregistered firearms assembled from parts. Because ghost guns lack serial numbers, they are often difficult for law enforcement to trace. Mr. Moreno allegedly informed the agent that due to some specially manufactured parts, the firearms were fully automatic, meaning they could fire more than one round of ammunition with a single depression of the trigger.

Following the undercover buy, Mr. Moreno and Mr. Sisneros, who had driven to Lubbock from New Mexico, left the scene in a black Chrysler sedan. Officers pulled them over for a traffic violation and conducted a probable-cause search of the vehicle. Inside, they found additional THC wax, two handguns, and the money received from the undercover agent. Both men were immediately arrested.  

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

If convicted, they face various penalties, including up to life in federal prison.

The Drug Enforcement Administration’s Dallas Field Division, Lubbock Resident Office conducted the investigation with assistance of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Caprock HIDTA, Lubbock Texas Anti-Gang Taskforce (TAG), the Lubbock County Sheriff’s Office, Lubbock Police Department and the Texas Department of Public Safety. Assistant U.S. Attorney Sean Long is prosecuting the case.

The owner of a for-profit trade school convicted of bilking the U.S. Department of Veterans Affairs will forfeit $72 million to the federal government, Acting U.S. Attorney Prerak Shah announced today.

In an order handed down Wednesday, U.S. District Judge Brantley Starr ruled that Jonathan Dean Davis, the 43-year-old owner of Retail Ready Career Center, will forfeit $72,480,225.03 – the total amount the VA paid him for military veterans’ student tuitions – to the government.  The order included the specific forfeiture of more than $4.7 million in cash; numerous luxury vehicles, including a Lamborghini, a Ferrari, a Bentley, two Mercedes-Benzes, and a BMW; and real estate in Dallas and Utah worth more than $2.5 million.

Mr. Davis was found guilty of seven counts of wire fraud and four counts of money laundering following a six-day trial in April.

“This defendant attempted to argue that because the proceeds of his fraud were in his business account, rather than in a personal bank account, he should not have to give it all back. But neither the American taxpayer nor the Court recognize such a distinction. We are proud to say that $72 million in fraudulently-obtained money is headed back into U.S. coffers,” said Acting U.S. Attorney Prerak Shah.

According to evidence presented at trial, Mr. Davis marketed Retail Ready’s six-week HVAC training course to veterans whose tuition and fees would be covered by the Veteran’s Educational Assistance Act of 2008, also known as the post-9/11 GI Bill. The defendant, who was essentially broke at the time of the crime, realized that he could charge $18,000 to $21,000 per student for the six-week course, if only he could get approval from the VA to accept GI Bill payments for tuition – which required prior approvals from the Texas Workforce Commission (TWC) and the Texas Veterans Commission (TVC).

These agencies required applicants to certify that they were not personally facing any criminal or civil actions, and to prove that their schools were established educational institutions in stable financial condition. Knowing he could not meet these requirements, Mr. Davis repeatedly lied and concealed information from these agencies.

“Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order,” Mr. Davis wrote in an electronic journal he kept on his computer, which was recovered by federal agents during a search of Retail Ready. The journal became a key piece of evidence at trial.

Mr. Davis assured the TWC that he was not subject to any civil actions, when, in fact, he was facing numerous civil judgments over unpaid debts. He also told the TWC that he was not facing any criminal charges, when, in fact, he had a pending felony charge for theft of services. 

Mr. Davis told the TVC that Retail Ready had been operating as a school for two years, when, in fact, the company had only existed for a few months and had never trained any students. He claimed that Retail Ready was fully prepared to train veterans, when, in fact, the company lacked a building and basic supplies.  He even lied to an independent accountant about the school’s financial condition, and then submitted false financial statements to both the TWC and the TVC. 

Eventually, based upon Mr. Davis’ lies to the TWC and TVC, the VA accepted Retail Ready’s application, allowing Mr. Davis to charge veterans’ tuition and fees to the VA under the GI Bill.

In 2014, he began recruiting student veterans, promising to prepare them for lucrative careers in the heating and air conditioning industry. Upon entering the workforce, however, many of these veterans discovered that Retail Ready had failed to teach them many of the basic skills necessary for entry-level technician jobs.

Several veterans testified at trial that they had relied on the Retail Ready’s fraudulently obtained VA endorsement and were sorely disappointed about their post- Retail Ready career prospects and pay. They were also shocked to learn of the rate at which Retail Ready’s six-week course had drained their GI Bill benefits, testifying that they felt “used,” “taken advantage of,” “deceived,” and “bamboozled.” 

Mr. Davis is set to be sentenced on Wednesday, Sept. 22. He faces up to 180 years in federal prison.

The VA’s Office of Inspector General conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the United States Postal Inspection Service’s Fort Worth Field Office. Assistant U.S. Attorney Dimitri Rocha is handling forfeiture. Assistant U.S. Attorneys Douglas Brasher and Fabio Leonardi are prosecuting the case.

Tarrant County’s John Peter Smith Hospital (JPS) has agreed to pay more than $3.3 million to settle allegations that it violated the False Claims Act by upcoding certain claims submitted to federal healthcare programs, Acting U.S. Attorney Prerak Shah announced today.

The settlement resolves a whistleblower suit filed in 2018 by JPS’s former Director of Compliance Erma Lee, whose complaint asserted that the hospital improperly appended billing modifiers -25, -59, and -XU to hundreds of claims in order to obtain payments to which it was not entitled.

Used properly, these billing modifiers indicate that a provider administered significant care on the same day as another medical procedure that was above and beyond the preoperative and postoperative care “bundled” into the main procedure code.  

In her amended complaint, filed in September 2020, Ms. Lee alleged that she alerted hospital leadership that JPS had been improperly adding these modifiers to claims between 70 and 95 percent of the time, in essence routinely double billing for certain aspects of patients’ care.  Nevertheless, she claimed, JPS failed to reimburse payors for overpayment stemming from these improperly coded claims.

“When company executives ignored this whistleblower's concerns about improper billing, she took them to the court,” said Acting U.S. Attorney Prerak Shah. “We are proud of the citizens who speak out to protect our federal healthcare programs.”

The allegations resolved by this settlement were originally filed under the qui tam provisions of the False Claims Act, which permits private persons with evidence of fraud to sue on behalf of the government and to share in any proceeds. 

Under the Act, the United States may intervene in such an action or permit the whistleblower to pursue it.  Although the United States elected not to intervene in the case, it investigated Ms. Lee’s allegations and worked collaboratively with the relator and her counsel in their pursuit and resolution of this case.

Ms. Lee will receive $912,635 as her statutory share of the settlement proceeds.

This matter was handled on behalf of the government by Assistant U.S. Attorney Andrew Robbins on behalf of the Office of the Inspector General for the Department of Health and Human Services.

The case is captioned United States ex rel. Lee v. Tarrant County Hospital District, case no. 4:19-CV-00412-P (N.D. Tex.).  The claims settled by this agreement are allegations only and do not constitute a determination of liability. 

A San Angelo man who embezzled more than half a million dollars from a wind farm was sentenced yesterday to more than three years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Arturo Salazar III, 41, a former site manager for a Vestas-American Wind Technologies wind farm, pleaded guilty to four counts of unauthorized transactions with access devices in May. He was sentenced Thursday to 37 months in federal prison by U.S. District Judge James Wesley Hendrix, who ordered him to pay $359,810 in restitution to the company.

According to court documents, Mr. Salazar admitted that he teamed up with a conspirator to create a sham business, BT Machine, with the sole purpose of creating fraudulent invoices. 

From 2016 to 2019, the pair created hundreds of bogus invoices for nonexistent equipment BT Machine purportedly leased to Vestas. The conpsirator sent each invoice – complete with a BT “logo” – to Mr. Salazar at his work email address; Mr. Salazar then paid each one with his Vetas credit card. He and the other individual then split the money.

Mr. Salazar also used Vestas company credit cards to make unauthorized purchases totaling approximately $80,000.  These personal purchases included products from Amazon as well as a $50,000 skid steer loader, a $18,900 universal terrain vehicle, and a $7,900 dump trailer.

From 2016 to 2019, Mr. Salazar admitted to defrauding Vestas out of more than $550,000. To avoid detection, he kept each transaction under the $2,000 limit set by his employer.

The Federal Bureau of Investigation’s Dallas Field Office, San Angelo Resident Agency conducted the investigation.  Assistant U.S. Attorney Ann Howey prosecuted the case.
 

The Laredo man who brutally assaulted a woman in a downtown Dallas parking garage has been sentenced to 25 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.  

David Cadena, 27, was charged via criminal complaint in November 2019 and indicted less than a month later.  Before he was federally charged, Mr. Cadena been charged by the state with aggravated assault with a deadly weapon and aggravated robbery, but had twice bonded out of Dallas County Jail. A federal judge ordered him detained immediately after he was arrested by the feds.  He pleaded guilty in April 2021 to the federal charge, carjacking resulting in bodily injury, and was sentenced Thursday by U.S. District Judge Jane J. Boyle.

According to plea papers, Mr. Cadena admitted he savagely assaulted the victim with a fire extinguisher in the parking garage of the Statler Hotel around 2:30 a.m. on Saturday, Sept. 21.

After assaulting the victim, Mr. Cadena allegedly carjacked her 2015 Toyota Corolla, drove it around the garage, and slammed it into a wall. A Statler security guard observed Mr. Cadena behind the wheel of the wrecked vehicle and removed him from the car for his own safety.

Authorities discovered the 27-year-old victim, identified in court documents as J.K., unconscious, with severe bruising and swelling to her face and head. She was transported to Baylor Hospital, where she lay in a coma for two days, and medical professionals documented nerve damage to her arms and legs as a result of the beating.

“Cadena was likely a blow short of committing capital murder,” prosecutors argued in a motion for upward variance from the sentencing guidelines, later granted by the judge. “This is not a run-of the-mill, garden-variety carjacking. Cadena’s crime is excessively violent and egregious.”

In court documents, Mr. Cadena asserted that because he was heavily intoxicated at the time of the crime, he has no recollection of the events that occurred that night. However, after reviewing the evidence, including security video and witness accounts, he agreed that he committed the offense as described.

The Federal Bureau of Investigation Dallas Field Office and Dallas Police Department conducted the investigation. Assistant U.S. Attorneys Camille Sparks and Gary Tromblay prosecuted the case.

A Grand Prairie man was convicted yesterday of trafficking a 16-year-old girl, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

After a two-day trial, a federal jury in Dallas on Tuesday convicted 37-year-old Howard Sandford Williams of sex trafficking of a child.

“This defendant exploited a vulnerable teenager he found online,” said Acting U.S. Attorney Prerak Shah. “Far too often, traffickers target struggling women and girls, claiming that they can help. The U.S. Attorney’s Office and HSI are committed to fighting the scourge of trafficking, and to getting justice for the victims of this horrific crime.”

According to evidence presented at trial, Mr. Williams first contacted 16-year-old Jane Doe through Tagged, a dating app, after he viewed a live video of her venting about conflict within her family.

Mr. Williams checked Jane Doe into a hotel room in Irving, where he provided her with drugs and alcohol, had sex with her, and took photographs of her.  He then posted those photographs online in commercial sex advertisements.  Through the advertisements, Mr. Williams arranged for adult customers to go to Jane Doe’s hotel room for commercial sex; he also drove Jane Doe to adult customers for commercial sex.

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

Homeland Security Investigations conducted the investigation with the assistance of the Irving Police Department.  Assistant U.S. Attorneys Nicole Hammond and John de la Garza are prosecuting the case.  U.S. District Judge Jane J. Boyle presided over the trial.

The inventor of cryptocurrency AriseCoin was sentenced today to five years in federal prison for duping investors out of more than $4 million, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah. 

AriseBank CEO Jared Rice, Sr. – who settled a civil action involving AriseCoin filed by the SEC’s Fort Worth regional office last year – pleaded guilty to one count of securities fraud in March 2019. He was sentenced Wednesday by U.S. District Judge Ed Kinkeade, who ordered him to pay $4,258,073 in restitution.

According to his plea papers, Mr. Rice, 33, admitted he lied to would-be investors, claiming that AriseBank – billed as the world’s “first decentralized banking platform” based on the proprietary digital currency AriseCoin – could offer consumers FDIC-insured accounts and traditional banking services, including Visa-brand credit cards, in addition to cryptocurrency services.  In actuality, AriseBank had not been authorized to conduct banking in Texas, was not FDIC insured, and did not have any sort of partnership with Visa.

Even as he touted AriseBank’s nonexistent benefits, Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, transportation, a family law attorney, and even a guardian ad litem – facts he failed to disclose to investors. He also failed to disclose that he’d plead guilty to state felony charges in connection with a prior internet-related business scheme. 

Meanwhile, hundreds of investors bought approximately $4,250,000 in AriseCoin using digital currencies like Bitcoin, Ethereum, and Litecoin, as well as fiat currency.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Mary Walters, Sid Mody, and Erica Hilliard prosecuted the case.

A former preschool teacher pleaded guilty today to purchasing sexually explicit images of children, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Jason Sherod Baldwin, 29, was charged via criminal complaint in July 2020 and indicted less than a month later. He pleaded guilty Tuesday to one count of receipt of child pornography.

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 the complete file set would cost $27. 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 ($13 for two videos of minor males), Dec. 8 ($10 for a video and more than 100 images), Dec. 18 ($12 for two videos), and Jan. 21 ($31 for seven videos).

In an interview with law enforcement after he was arrested, Mr. Baldwin admitted that he’d 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.

He now faces between five and 20 years in federal prison.

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

A Bedford man has been sentenced to 10 years in federal prison for receiving sexually explicit images of children, announced Acting U.S. Attorney Prerak Shah.

Joshua Clyde Lamb, 35, pleaded guilty in April to one count of receipt of child pornography. He was sentenced Friday by U.S. District Judge Reed C. O’Connor.

According to plea papers, Mr. Lamb admitted that he used Skype, an internet-based video teleconferencing platform, to communicate with purveyors of child pornography based in the Philippines. On one occasion, he paid $30 for a video for a 10-minute video of an adult male raping a prepubescent girl.

Homeland Security Investigations’ Dallas Field Division conducted the investigation with help from HSI’s Portland, Maine Field Division. Assistant U.S. Attorney Aisha Saleem prosecuted the case.

An Amarillo man has been sentenced to 35 years and five months in federal prison for gun and drug crimes, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

In April, a federal jury in Amarillo convicted Jeffrey Rene Lopez, 52, of two counts of possession with intent to distribute methamphetamine, one count of possession of firearms in furtherance of drug trafficking crimes, and one count of felon in possession of firearms.  He was sentenced Thursday by U.S. District Judge Matthew J. Kacsmaryk.

According to evidence presented at trial, Mr. Lopez was dealing meth out of two residences in Amarillo.

On October 19, 2020, law enforcement recorded a confidential informant calling Mr. Lopez to schedule a $1,000, two-ounce meth buy. Two days later, equipped with an audio/video recording device, the CI knocked at the door of Mr. Lopez’s residence.

Once inside, the CI watched Mr. Lopez pull out a large bag of crystal meth and scoop about an ounce into smaller plastic baggie. When the CI said the substance looked “shaky” (low quality), Mr. Lopez promised to get the second ounce from another location. Mr. Lopez retrieved additional meth from his brother’s residence and handed it off to the CI at a local laundromat. 

About a month later, the CI informed law enforcement that Mr. Lopez was traveling back from California with a load of methamphetamine. DEA agents spotted him on Interstate Highway 40 near Amarillo, and called in Texas DPS troopers to place him under arrest pursuant to a warrant. When law enforcement searched his vehicle, they found two bundles of meth hidden inside a spare tire in the trunk.  Agents also searched two residences in Amarillo, where they found a total of nine guns: seven pistols, an AR-15 style rifle, and a .22 rifle with an extended magazine.

In an interview a short while later, Mr. Lopez confessed to possession of both the guns and the drugs, stating that he got the meth from a source in California who had previously “ripped him off.”

Due to his prior felony convictions, Mr. Lopez was prohibited by law from possessing – including buying, borrowing, carrying, storing, or shooting – firearms. His former convictions include three counts of possession of a controlled substance for sale, two counts of transportation of a controlled substance, one count of unlawful possession of a controlled substance, two counts of felon in possession of a firearm, and obliterated firearm violation, all in California.

“This defendant smuggled drugs across state lines to distribute to Texans struggling with addiction, using firearms in furtherance of his crimes,” said Acting U.S. Attorney Prerak Shah. “Amarillo is safer today because he is behind bars. And I expect he will spend his decades in prison regretting his choices.”

 “The arrest and conviction of Mr. Lopez has undoubtedly made our Amarillo safer,” said Eduardo A. Chavez, Special Agent in Charge of the DEA Dallas Field Division, which is responsible for the Amarillo area.  “This is a clear example of the marriage of drugs and guns and something that the men and women of DEA Amarillo and our law enforcement partners will tirelessly work to destroy.”

The Drug Enforcement Administration’s Dallas Field Division, Amarillo Resident Office conducted the investigation with assistance from the Amarillo Police Department, the Randall County Sheriff’s Office, the Texas Department of Public Safety, and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division. Assistant U.S. Attorneys Jeffrey Haag and Meredith Pinkham prosecuted the case with the help of Assistant U.S. Attorney Anna Marie Bell.

A Wichita Falls man pleaded guilty today to possessing devices that convert semi-automatic weapons into machineguns, announced Acting United States Attorney for the Northern District of Texas Prerak Shah.

Paul David Shaw Jr., 30, was charged via criminal complaint in May and indicted in July. He pleaded guilty on Wednesday to one count of possession of an unregistered firearm.

According to plea papers, Mr. Shaw admitted that he used Snapchat to advertise the sale of Glock “switches.” Also known as “auto sears,” switches are small, easy-install devices designed to convert semi-automatic pistols into fully automatic firearms, classified under federal law as machineguns.

A federal agent, acting in an undercover capacity, purchased two Glock switches from Mr. Shaw for $600 each.  Investigators test-fired the Glock switches, and confirmed that they functioned as designed, causing the gun to fire more than one round of ammunition with a single depression of the trigger.

Law enforcement also conducted a search of a commercial building Mr. Shaw used, where they found several additional switches.

“Switches allow criminals to fire off multiple rounds with a single squeeze of a trigger,” said Acting U.S. Attorney Prerak Shah. “Unfortunately, we’re seeing an influx of switches on our streets, where they are inflicting serious harm. ATF and the U.S. Attorney’s Office are committed to keeping our communities safe by keeping these dangerous items out of the wrong hands.”  

“Someone selling tools that make firearms fully automatic is one of law enforcement’s greatest fears. Automatic weapons in the hands of those aiming to cause harm is what keeps cops up at night. The fact that Mr. Shaw was selling these on social media should cause us all grave concern. I applaud the efforts of all of those involved in the arrest of this reckless individual,” stated ATF Dallas Special Agent in Charge Jeffrey C. Boshek II. 

Mr. Shaw now faces a maximum of ten years in prison, as well as possible fines.

The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division conducted the investigation with assistance from the Wichita Falls Police Department. Assistant U.S. Attorney Rob Boudreau prosecuted the case.

A Dallas man has been found guilty of sex trafficking a 14-year-old minor and an adult victim, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

After less than a half hour of deliberation, a federal jury in Dallas convicted Anthony Lennell Acy, 34, on one count of child sex trafficking and one count of sex trafficking by force, fraud, and coercion.

“Human trafficking is one of the most degrading crimes we prosecute. Like so many traffickers, this defendant preyed on vulnerable victims, lining his pockets at the expense of their dignity,” said Acting U.S. Attorney Prerak Shah. “The North Texas Trafficking Task Force is proud to stand against the exploitation of women and girls.”

“Sex trafficking has no place in our communities. HSI will vigorously pursue anyone involved in the exploitation of victims for commercial sexual acts,” said Ryan L. Spradlin, Special Agent in Charge HSI Dallas. “We will aggressively investigate these types of cases to ensure predators are identified, arrested, and face the justice deserved.”

According to evidence presented at trial, Mr. Acy trafficked at least two victims — including the 14-year-old girl, a runaway from McKinney, Texas — out of multiple hotels in Dallas and in California. 

Agents with the North Texas Trafficking Task Force testified that they recovered Jane Doe 1 and Adult Victim 1 out of a Dallas hotel room and arrested Mr. Acy as he was leaving the hotel parking lot.  

At trial, Jane Doe 1 testified that Mr. Acy approached her in a parking lot next to a hotel a couple weeks after she ran away from home.  Jane Doe 1 stated that Mr. Acy told her that she could model for his clothing line and then drove her to a hotel, where he offered her dinner and a place to stay that night.  She testified that Mr. Acy later forced her to take ecstasy pills, caused her to engage in commercial sex in Dallas and in California, and physically assaulted her multiple times.

Adult Victim 1 testified at trial that Mr. Acy first recruited her over Facebook, claiming that he wanted to be her boyfriend.  Adult Victim 1 stated that, after she traveled to Dallas to visit Mr. Acy, he took her cell phone and her car keys and forced her to engage in commercial sex in order to pay back the money he claimed to have spent on her.  Mr. Acy trafficked Adult Victim 1 first in Dallas and later in Austin and California.  Adult Victim 1 testified that Mr. Acy forced her to earn $1,000 a day, with all proceeds turned over to him.

Both victims testified that Mr. Acy repeatedly beat them, threatened them at gunpoint and knifepoint, and threatened to kill them and their families if they called the police.

In the course of the investigation, investigators reviewed Mr. Acy’s hotel records, phone records, financial records, online advertisements, and Facebook posts that corroborated the victims’ accounts of Mr. Acy’s sex trafficking activity.

Mr. Acy now faces a minimum sentence of 15 years and up to life in federal prison. 

The North Texas Trafficking Task Force, led by Homeland Security Investigations, conducted the investigation, with assistance from the Texas Department of Public Safety, the Dallas County Sheriff’s Office, the Colleyville Police Department, and the Dallas County District Attorney’s Office. Assistant U.S. Attorneys Rebekah Ricketts and John Kull are prosecuting the case. U.S. District Judge Jane J. Boyle presided over trial.

The man suspected of causing an explosion at his residence in Amarillo, Texas on Monday has been federally charged, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Erfan Salmanzadeh, a 32-year-old naturalized citizen of the U.S. born in Iran, was charged via criminal complaint on Friday with one count of possession of a destructive device.  (He has also been charged by the state with possession of components of explosives.)

“Mr. Salmanzadeh had absolutely no business handling unregistered destructive devices. We believe this defendant is a danger to the community and must be kept behind bars,” said Acting U.S. Attorney Prerak Shah.  

“The FBI is committed to protecting our communities from harm and working with our law enforcement partners to disrupt violent activity. This defendant allegedly possessed a device with the potential to cause significant damage or injury to innocent people,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We want to thank the Amarillo Police Department, Texas Department of Public Safety, and Homeland Security Investigations for their tireless assistance in this investigation.”

Following the explosion Monday afternoon, officers discovered explosive components in Mr. Salmanzadeh’s residence, his backyard, and the alleyway behind his home, law enforcement has confirmed.  The incident prompted the immediate evacuation of the area; neighbors were allowed to return to their homes on Wednesday.

Though the arrest warrant against Mr. Salmanzadeh was unsealed this afternoon, the criminal complaint and affidavit remain sealed, per judicial order.

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

If convicted of the federal offense, he faces up to 10 years in prison.

The Federal Bureau of Investigation’s Dallas Field Office and the Amarillo Police Department’s Bomb Squad conducted the investigation with the assistance of the North Texas Joint Terrorism Taskforce, Homeland Security Investigations, the Texas Department of Public Safety, and the Amarillo Fire Department. Assistant U.S. Attorneys Jeffrey Haag and Josh Frausto are prosecuting the case.

UPDATE: On May 26, a federal grand jury returned a superseding indictment charging Mr. Salmanzadeh with attempted use of a weapon of mass destruction, a violation of 18 U.S.C. § 2332a(a)(2). The charge carries a potential sentence of up to life in federal prison. Mr. Salmanzadeh’s trial has been continued to Tuesday, August 9.

A Lubbock man who shot at police and then led them on a 115 mile-per-hour chase in Lamesa, Texas, was sentenced today to 30 years in federal prison for gun and drug crimes, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Zachary Jay Barfield, 28, pleaded guilty in April to one count of possession with intent to distribute methamphetamine and one count of discharge of firearms in furtherance of a drug trafficking crime. He was sentenced Thursday by U.S. District Judge James Wesley Hendrix.

On Nov. 4, 2020, Lamesa police officers attempted to stop a vehicle driven by Mr. Barfield, who was then a felon on parole with an active warrant for deadly conduct by discharging a firearm.  

According to plea papers, Mr. Barfield admitted that as law enforcement approached his vehicle shouting commands, he fired a gun at the officers and sped away. Travelling at more than 115 miles per hour, he headed toward County Road 8201, then turned onto an unpaved road and proceeded into a pasture, evading officers.

Shortly thereafter, law enforcement located the abandoned vehicle in a ditch in Andrews County, Texas. Inside, they found a 12 gauge shotgun, ammunition, and a fanny pack containing more than 40 grams of methamphetamine.  Nearby, they located a man who stated that he was seated in the backseat of the vehicle during the chase. He allegedly admitted he had been planning to purchase $20 worth of meth from the driver – Zachary Barfield – before law enforcement pulled the car over.

Law enforcement then dispatched a Department of Public Safety helicopter and a Texas Department of Criminal Justice bloodhound tracking canine to help locate Mr. Barfield. The following day, at 2:45 a.m., they located him and his girlfriend in a field roughly 8.4 miles from the abandoned car. The pair were laying on face-down on top of two Smith & Wesson guns: a 9 mm semiautomatic pistol and a .40 caliber semiautomatic pistol.

During an interview at the local sheriff’s office, Mr. Barfield waived his right to remain silent and admitted that he was a distributor of methamphetamine, and that he discharged a firearm in order to advance his distribution scheme.

The Lamesa Police Department, the Texas Department of Public Safety, the Texas Department of Criminal Justice, the Drug Enforcement Administration’s Dallas Field Division, and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division conducted the investigation with the assistance of the Dawson County Sheriff’s Office. Assistant U.S. Attorney Stephen Rancourt prosecuted the case.

A gang member who started a riot at the Lubbock County Jail last month was sentenced today to more than 21 years in federal prison for a drug crime, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Clarence Willard, Jr., 28, pleaded guilty in March to possession with intent to distribute crack cocaine. He was sentenced Thursday to 262 months in prison by U.S. District Judge James Wesley Hendrix.

According to plea papers, Mr. Willard – aka “C-Will” – admitted that when officers attempted to pull his car over on Sept. 2, 2020, he ditched the vehicle and fled on foot with a clear plastic baggie of cocaine in his hand.  An officer deployed his taser and Mr. Willard fell to the ground, dropping the baggie, which contained approximately 48 grams of crack cocaine.

Law enforcement testified today that during their undercover investigation, they discovered that Mr. Willard ran a trap house in East Lubbock, selling crack cocaine for roughly $100 per gram.  Officers said they found numerous videos of Mr. Willard flaunting his drug trafficking on his phone, including a video of him displaying what he stated was $200,000 cash.  Mr. Willard also recorded freestyle rap videos of himself openly discussing crack cocaine trafficking.  

At his sentencing hearing, prosecutors introduced evidence showing that Mr. Willard, a member of the Crips gang, started a riot in the Lubbock county jail while awaiting sentencing. 

A gang intelligence Sargent with the Lubbock County Sheriff’s Office testified that other Crip members stated that they participated in the riot because Willard was the “Mayor of Eastside,” and effectively ran crack cocaine distribution in East Lubbock. 

Prosecutors played surveillance video of the riot, which showed Willard starting the melee and then viciously stomping and kicking and rival gang members in the jail pod.  Officers eventually deployed pepper spray to end the riot, and the placed the entire facility of approximately 1200 inmates on lockdown as a result of Willard’s conduct.

Mr. Willard’s main co-defendant, Kevaundre Boyd, was sentenced on May 20 to 210 months in federal prison for possession with intent to distribute cocaine.

The Drug Enforcement Administration’s Dallas Field Division conducted the investigation, with significant assistance from the Lubbock Police Department, the Lubbock County Sheriff’s Office, the Texas Department of Public Safety, Homeland Security Investigations, and the Texas Anti-Gang Unit.  Assistant U.S. Attorney Stephen Rancourt prosecuted the case.

A Coppell businessman was sentenced today to more than 11 years in prison for wire-fraud and money-laundering offenses in connection with his fraudulent scheme to obtain approximately $24.8 million in forgivable Paycheck Protection Program (PPP) loans, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah and Assistant Attorney General Kenneth A Polite Jr. of the Justice Department’s Criminal Division.

Dinesh Sah, 55, of Coppell, pleaded guilty on March 24. He was sentenced today by U.S. District Judge Karen Gren Scholer, who also ordered him to pay $17,284,649.79 in restitution.

According to court documents, Sah submitted 15 fraudulent applications, filed under the names of various purported businesses that he owned or controlled, to eight different lenders seeking approximately $24.8 million in PPP loans.

He claimed that these businesses had numerous employees and hundreds of thousands of dollars in payroll expenses when, in fact, no business had employees or paid wages consistent with the amounts claimed in the PPP applications.

Sah further submitted fraudulent documentation in support of his applications, including fabricated federal tax filings and bank statements for the purported businesses, and falsely listed other persons as the authorized representatives of certain of these businesses without the authority to use their identifying information on the applications.

“Congress passed the Paycheck Protection Program to help struggling businesses stay afloat, not to fund faux entrepreneurs’ luxury lifestyles,” said Acting U.S. Attorney Prerak Shah. “Even as COVID-19 devastated companies around the nation, Mr. Sah sapped millions of dollars from the relief fund that could have helped them. He exploited the pandemic for personal gain, and we are proud to hold him accountable.”

“Today’s sentence serves as a clear reminder that individuals who exploit COVID-relief programs to enrich themselves will be held accountable under the law,” said Assistant Attorney General Kenneth A. Polite Jr. “The Department of Justice and its law enforcement partners remain committed to aggressively pursuing and bringing to justice those who steal federal funds intended to help legitimate small businesses.”

Based upon his false statements and fabricated documents, Sah received over $17 million in PPP loan funds and diverted the proceeds for his personal benefit, using them to purchase multiple homes in Texas, pay off the mortgages on other homes in California, and buy a fleet of luxury cars, including a Bentley convertible, Corvette Stingray, and Porsche Macan. Sah also sent millions of dollars in PPP proceeds in international money transfers. As part of his guilty plea, Sah agreed to forfeit, among other property, eight homes, six luxury vehicles, and more than $9 million in fraudulent proceeds that the government has seized to date.

“This sentencing serves as a deterrent to all who would attempt to commit fraud against any of the COVID-19 relief programs,” said Special Agent in Charge Christopher J. Altemus Jr. of the IRS – Criminal Investigation Dallas Field Office. “These programs are here to help during a pandemic, not for fraudsters like Sah to take advantage of for their own personal gain.”

The Dallas Field Offices of the FDIC-OIG, IRS-Criminal Investigation, and U.S. Treasury Inspector General for Tax Administration investigated the case. Assistant Deputy Chief Anna G. Kaminska of the Criminal Division’s Fraud Section and Section Chief Katherine Miller of the U.S. Attorney’s Office for the Northern District of Texas prosecuted the case. Assistant U.S. Attorneys Erica Hilliard and Dimitri Rocha handled the asset-forfeiture component of the case.

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

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

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

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

A Texas man was sentenced today to more than 11 years in prison for wire-fraud and money-laundering offenses in connection with his fraudulent scheme to obtain approximately $24.8 million in forgivable Paycheck Protection Program (PPP) loans.

Dinesh Sah, 55, of Coppell, pleaded guilty on March 24, 2021. According to court documents, Sah submitted 15 fraudulent applications, filed under the names of various purported businesses that he owned or controlled, to eight different lenders seeking approximately $24.8 million in PPP loans. Sah claimed that these businesses had numerous employees and hundreds of thousands of dollars in payroll expenses when, in fact, no business had employees or paid wages consistent with the amounts claimed in the PPP applications. Sah further submitted fraudulent documentation in support of his applications, including fabricated federal tax filings and bank statements for the purported businesses, and falsely listed other persons as the authorized representatives of certain of these businesses without the authority to use their identifying information on the applications.

“Today’s sentence serves as a clear reminder that individuals who exploit COVID-relief programs to enrich themselves will be held accountable under the law,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Department of Justice and its law enforcement partners remain committed to aggressively pursuing and bringing to justice those who steal federal funds intended to help legitimate small businesses.”

“Congress passed the Paycheck Protection Program to help struggling businesses stay afloat, not to fund faux entrepreneurs’ luxury lifestyles,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas. “Even as COVID-19 devastated companies around the nation, Mr. Sah sapped millions of dollars from the relief fund that could have helped them. He exploited the pandemic for personal gain, and we are proud to hold him accountable.”

“This sentencing serves as a deterrent to all who would attempt to commit fraud against any of the COVID-19 relief programs,” said Special Agent in Charge Christopher J. Altemus Jr. of the IRS–Criminal Investigation Dallas Field Office. “These programs are here to help during a pandemic, not for fraudsters like Sah to take advantage of for their own personal gain.”

“The Treasury Inspector General for Tax Administration aggressively pursues those who endeavor to defraud programs afforded to the American people under the CARES Act,” said J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA). “We appreciate the efforts of the Department of Justice and our law enforcement partners in this effort.”

Based upon his false statements and fabricated documents, Sah received over $17 million in PPP loan funds and diverted the proceeds for his personal benefit, using them to purchase multiple homes in Texas, pay off the mortgages on other homes in California and buy a fleet of luxury cars, including a Bentley convertible, Corvette Stingray and Porsche Macan. Sah also sent millions of dollars in PPP proceeds in international money transfers. As part of his guilty plea, Sah agreed to forfeit, among other property, eight homes, six luxury vehicles and more than $9 million in fraudulent proceeds that the government has seized to date.

In addition to the prison sentence, Sah was ordered to pay $17,284,649.79 in restitution.

The Dallas Field Offices of the FDIC-OIG, IRS-Criminal Investigation and U.S. Treasury Inspector General for Tax Administration investigated the case.

Assistant Deputy Chief Anna G. Kaminska of the Criminal Division’s Fraud Section and Section Chief Katherine Miller of the U.S. Attorney’s Office for the Northern District of Texas prosecuted the case. Assistant U.S. Attorneys Erica Hilliard and Dimitri Rocha handled the asset-forfeiture component of the case.

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

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

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

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

A former IRS officer was sentenced today to three years in prison for obstructing federal tax laws, announced Acting U.S. Attorney Prerak Shah.

Former Revenue Officer Sonya Vivar, 55, pleaded guilty in November to one count of corrupt endeavor to obstruct or impede the due administration of internal revenue laws. She was sentenced Thursday by U.S. District Judge Mark Pittman.

According to plea papers, Ms. Vivar admitted she attempted to conceal her personal relationship with C.J.B., the subject of an IRS investigation, from the IRS and U.S. Treasury Inspector General for Tax Administration.  

At the time, C.J.B. was operating a business that was delinquent on its employment taxes.

C.J.B. had purchased the company only after Ms. Vivar was assigned to oversee collection efforts against it. Ms. Vivar was aware that C.B.J. had acquired the company and sold its assets at a profit or transferred the assets into newly formed business entities.

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

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

The man who allegedly shot and killed a SWAT officer during a standoff in Levelland, Texas earlier this month has been charged with assaulting a federal officer who responded to the scene, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Omar Soto-Chavira, 22, was charged via criminal complaint on Friday with one count of forcibly assaulting a federal officer engaged in the performance of official duties. Mr. Soto-Chavira has also been charged by the state with capital murder.

“The state acted swiftly to charge Mr. Soto-Chavira in the murder of Lubbock County Sheriff’s Office Sgt. Josh Bartlett. Were Mr. Soto-Chavira to post the $500,000 bond set in the state case, he would be immediately transferred to federal custody, where criminal defendants can be detained without bond, ” said Acting U.S. Attorney Prerak Shah. “We believe this defendant is a threat to the community, and needs to be kept behind bars. We mourn the loss of Sgt. Bartlett, who served with honor for nine years, and we pray for the other officers who were wounded in the standoff, including Sgt. Shawn Wilson.”

Local law enforcement has confirmed that during the almost 11-hours standoff, the defendant repeatedly opened fire at agents and officers. Lubbock County Sheriff’s Department Sgt. Josh Bartlett was shot in the neck and killed; Levelland Police Sgt. Shawn Wilson was shot in the head and rushed to the hospital, where he remains in critical condition; and two other officers were also shot and wounded.

Though the federal criminal complaint against Mr. Soto-Chavira remains sealed, the federal arrest warrant was unsealed shortly after it was filed this morning.

A complaint is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Soto-Chavira is presumed innocent until proven guilty.

If convicted in the federal case, he faces up to 20 years in federal prison. He faces a potential death sentence if convicted on state charges.

The Levelland Police Department, Lubbock County Sheriff’s Office SWAT, and Lubbock Police Department SWAT conducted the investigation with the assistance of Homeland Security Investigations, the Federal Bureau of Investigation’s Dallas Field Office, the Bureau of Alcohol, Tobacco, Firearms, & Explosives’ Dallas Field Division, the Drug Enforcement Administration’s Dallas Field Division, the Texas Department of Public Safety, the Texas Rangers, and the Hockley County District Attorney's Office. Assistant U.S. Attorney Sean Long is prosecuting the federal case.

A Muleshoe, Texas man who sexually exploited an 11-year-old girl was sentenced today to 30 years in federal prison for child pornography, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

In April, after two days of trial, a federal jury found 25-year-old Felipe Mata-Benavidez guilty of production of child pornography. He was sentenced Thursday by U.S. District Judge James Wesley Hendrix.

According to evidence presented at trial, Mr. Mata-Benavidez attempted to sexually assault an 11-year-old relative at her home in Muleshoe.  During the assault, the victim’s mother walked in on Mr. Mata-Benavidez attempting to have sexual intercourse with the minor.

The young girl’s mother stopped the assault and fled the residence with her daughter.  A short time later, a concerned neighbor notified law enforcement after hearing about the incident.

The Muleshoe Police Department then interviewed Mr. Mata-Benavidez.  He showed detectives his cell phone, which contained his messages with the young girl.

In those messages, Mr. Mata-Benavidez instructed the 11-year-old to send him explicit photographs of herself.  When she refused, Mr. Mata-Benavidez bullied the girl until she conceded, texting Mr. Mata-Benavidez a lewd image.  He said the child was beautiful and told her not to “share with anybody else… because it’s mine.” 

The defendant then continued to ask the 11-year-old to send him more explicit images.

The Federal Bureau of Investigation’s Dallas Field Office, Lubbock Resident Agency, the Muleshoe Police Department, and Homeland Security Investigations - Lubbock Computer Forensic Analysts conducted the investigation.  Assistant U.S. Attorneys Callie Woolam and Matthew McLeod prosecuted the case.

A Sweetwater man who perpetrated a $12.3 million fraud while on pretrial release in a separate fraud case had almost nine years tacked onto his sentence today, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Stewart Kile Williams, 31, pleaded guilty in March to two counts of  wire fraud and two counts of engaging in monetary transactions in property derived from unlawful activity (money laundering). He was sentenced Thursday by U.S. District Judge James Wesley Hendrix to 105 months in federal prison, to be served consecutive to his existing 70 month sentence, and ordered to pay roughly $7.4 million in restitution.  

According to court documents, Mr. Williams committed these crimes in late 2018 and early 2019, while on pretrial release for crimes committed in the Southern District of Texas. (He was first charged by the Southern District in summer 2018 for selling non-existent cattle to a ranch in Decatur for $2.5 million. Following an indictment, he was released on bond, but would go on to have that release revoked in late 2019 after a local arrest for theft of hay bales. He eventually pleaded guilty in to four counts of wire fraud and was sentenced to 70 months in federal prison and ordered to pay more than $2 million in restitution.)

“They say insanity is doing the same thing over and over and expecting different results. Mr. Williams wasn’t insane, but he was brazen. While on pretrial release for one fraud in south Texas, he had the audacity to perpetrate a similar fraud in north Texas. If he thought federal prosecutors would content themselves with holding him accountable in only one case, he was sorely mistaken. We will not tolerate repeated maleficence,” said Acting U.S. Attorney Prerak Shah.  

“Mr. Williams’ bold actions in committing additional crimes while on pretrial release for other crimes shows his complete lack of concern for our laws or his fellow citizens and this additional sentencing is deserved,” said IRS – Criminal Investigations Special Agent in Charge Christopher J. Altemus Jr., Dallas Field Office.

In plea papers, Mr. Williams admitted that while on pretrial release, he formed AZS Trenching, an unregistered sole proprietorship that provided freight transport and trenching services in the Permian Basin. In January 2019, he entered into an agreement with Navarone Capital, a privately held factoring company that purchased outstanding invoices from businesses like AZS.  

At first, everything was above-board – Mr. Williams sent Navarone invoices for work AZS performed for pipeline company M.G. Dyess, Navarone wired advance payment to his bank account, and when M.G. Dyess paid Mr. Williams, he mailed the checks to Navarone.

Two months later, however, Mr. Williams asked Navarone to factor invoices provided for work he said AZS purportedly performed for pipeline company HIS. In fact, AZS had never serviced HIS.

In order to convince Navarone that the bogus HIS invoices were legitimate, Mr. Williams assumed the identity of an HIS construction manager. He obtained a temporary cell phone with an area code that matched HIS’s, and then, posing as the HIS employee, called Navarone to assure them that AZS was indeed performing the work outlined on the invoices. He also created a fake email address through godaddy.com, purportedly belonging to the HIS employee, from which he approved the bogus invoices complemented AZS’s “work.”

Of course, when the bogus invoices came due, Mr. Williams could not pay Navarone. After months of excuses and non-payment on HIS invoices, Navarone contacted HIS headquarters. The pipeline company told Navarone they did not have, and never had, a business relationship with AZS or Mr. Williams.

In total, Mr. Williams presented 38 bogus invokes to Navarone, causing them to wire approximately $12.3 million into his bank account. He used the criminally derived proceeds to make a number of large purchases, including a home in Abilene and $500,000 in construction equipment.

Internal Revenue Service – Criminal Investigations,  the United States Postal Inspection Service, and the Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorney Ann Howey of the Northern District of Texas prosecuted the north Texas case with significant assistance from Assistant U.S. Attorneys William Hagen and Jason Corley of the Southern District of Texas.