Northern District of Texas

DALLAS — Jesus Gonzales, 25, who pleaded guilty in May 2013 to a one-count indictment charging possession of a firearm by a prohibited person, was sentenced this morning by U.S. District Judge Barbara M. G. Lynn to 40 months in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, on October 25, 2012, officers with the Dallas Police Department responded to a suspicious car call in the 2500 block of Wentworth Drive in Dallas.  After locating the car and observing it commit traffic violations, officers pulled it over; Jesus Gonzales was the driver.

Gonzales gave officers consent to search the vehicle, and officers found 15 assault-style rifles individually wrapped in plastic in the car’s trunk.  Gonzales did not have a driver’s license and admitted being in the U.S. illegally.

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas Police Department investigated.  Assistant U.S. Attorney Taly Haffar prosecuted.

Defendant Used Elderly as Straw Buyers in Fraud Scheme

DALLAS - A former Denton County insurance agent, who was convicted at trial last summer on several felony offenses stemming from a scheme to defraud various life insurance companies, was sentenced today in federal court in Dallas.

U.S. District Judge Reed C. O’Connor sentenced Vincent Bazemore, 40, formerly of Aubrey, Texas, to serve a total of 292 months in federal prison and ordered him to pay $4,014,627 in restitution.  A jury deliberated just one hour before convicting him in July 2013 on all counts of an indictment charging four counts of mail fraud.  Today’s announcement was made by U.S. Attorney Sarah R. Saldana of the Northern District of Texas.

Between October 2007 and April 2009, Bazemore, an insurance agent, engaged in a scheme to obtain substantial commissions by inducing life insurance companies to issue policies on applications of individuals who appeared to be wealthy and seeking insurance for estate planning purposes, when in fact, the applicants were of modest financial means, and the policies were intended to be transferred to investors.

Bazemore solicited elderly individuals to apply for policies by representing that the life insurance was an investment with no financial cost or exposure and would result in a sizable monetary benefit to the individuals heirs.  Bazemore prepared the applications and related documents, on behalf of the applicants that contained forged signatures and falsified financial information to induce the life insurance companies into issuing the policies.

Bazemore also submitted the false and fraudulent applications and related documents to financial institutions to obtain premium financing on the policies.  In fact, the applicants were of modest financial means and the policies were obtained for the purpose of being transferred to investors.  Bazemore had agreements with insurance companies and managing agents that provided he would receive, for each policy issued on an application he submitted, a commission of 95 to 105 percent of the first year’s premium paid on the policy.

Today's announcement is related to efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) that was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

The FBI investigated the case.  Assistant U.S. Attorney Christopher Stokes prosecuted.

Defendant Also Convicted on Obstruction and Perjury Charges

DALLAS — A Dallas man who was arrested last summer as part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation and later convicted at trial, was sentenced this afternoon by U.S. District Judge Reed C. O’Connor to serve a total of 300 months (25 years) in federal prison, announced U.S. Attorney Sarah R. Saldana. 

Reynaldo Macedo-Flores, 35, was convicted on all five counts of the indictment, including one count of conspiracy to possess with intent to distribute cocaine; one count of conspiracy to possess with intent to distribute methamphetamine, one count of obstruction of justice and two counts of perjury.  The obstruction and perjury convictions stem from Macedo-Flores’s false testimony at the trial of his mother, Austreberta Macedo-Flores, in September 2013, also before Judge O’Connor.  (Austreberta Macedo-Flores was convicted of conspiring to distribute methamphetamine; her sentencing hearing is set for April 10, 2014.) 

The government presented evidence at trial that Reynaldo Macedo-Flores repeatedly sold narcotics to an undercover officer, bragged about taking the risk of distributing narcotics on a wiretap, and plotted to present false testimony – and then did so – at his mother’s trial.  

The eight remaining defendants in the case have been convicted; four have been sentenced.

The case involved undercover purchases, wiretaps and search warrants, and was investigated by the FBI in conjunction with the Dallas Police Department.  In total, over 15 kilograms of cocaine, four and one-half pounds of methamphetamine (ICE), five firearms, four luxury vehicles and $351,010 in cash – much of it, as trial testimony showed, packaged for shipment to Mexico – was seized in the operation. 

Assistant U.S. Attorneys Jason Schall and John Kull prosecuted the case. 

Defendants Threatened to Inflict Economic Harm

DALLAS, Texas — A federal grand jury in Dallas returned an indictment late yesterday charging a man and his sister, who did business as a search engine optimization company, with felony offenses stemming from their attempts to extort money from a business in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

William Laurence Stanley, 51, and his sister, Lynn Stanley Faust, 54, are each charged with one count of transmitting threats in interstate and foreign commerce and one count of Hobbs Act – Extortion.  A U.S. citizen, William Stanley most recently resided in Romania with his wife, a Romanian national.  He traveled several times in 2013 between Europe and the United States.  On March 3, 2014, he was arrested on a related federal criminal complaint at George Bush Intercontinental Airport in Houston, where he arrived on a flight from Europe. Faust is also a U.S. citizen who also traveled internationally in 2013.  Stanley appeared before a U.S. Magistrate Judge in the Southern District of Texas and was ordered detained.  A date has not yet been set for him to appear in federal court in Dallas.

William Stanley is also known as “William Laurence,” “Bill Stanley,” “William Davis,” “William Harris” and “William L. Stanley.”  Lynn Faust is also known as “Lynn Michaels.”  Stanley and Faust operated a search engine optimization (SEO) company and used emails reflecting various business names to include “reputation rewards” and “posting showcase.”

According to the complaint filed in the case, in November 2009, Generational Equity (GE), a Dallas-based merger and acquisitions firm, entered into a contract with Stanley for SEO services and reputation management.  Stanley was hired because of his ability to improve a firm’s online reputation through search results.  However, GE sought to terminate its relationship with Stanley after it determined he had acted outside of his contracted duties.  GE also observed websites allegedly created by Stanley that had the ability to damage GE’s reputation by associating GE with a scam.  From November 2010 through January 2011, GE paid Stanley a total of $80,000 to terminate the relationship.

According to the indictment, from December 13, 2013, until the end of February 2014, Stanley and Faust transmitted threatening communications, via email and telephone, from foreign countries to GE in the Northern District of Texas.  Those communications threatened to post comments on the Internet wrongfully disparaging GE’s reputation, if GE did not send money to Stanley.

Because of Stanley’s threats to harm GE’s reputation through negative Internet posts that would adversely affect GE’s ability to conduct business if it failed to send money, GE responded to the wrongful inducement by sending four payments totaling $29,556 by MoneyGram to Stanley in Brasov, Romania. 

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty.  A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge.  However, upon conviction, the maximum statutory penalty for transmitting threats in interstate and foreign commerce is two years in federal prison and a $250,000 fine.  The maximum statutory penalty for Hobbs Act – extortion is 20 years in federal prison and a $250,000 fine. 

The FBI is investigating and can be contacted at 972-559-5000.  Assistant U.S. Attorney C.S. Heath is in charge of the prosecution.

LUBBOCK, Texas — Dale Wray Fulford, 77, of Slaton, Texas, appeared this morning before U.S. District Judge Sam R. Cummings and pleaded guilty to an indictment charging one count of production of child pornography.  He faces a statutory penalty of not less than 15 years or more than 30 years in federal prison and up to a $250,000 fine.  Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

Fulford, who is in custody, admitted that between February 2013 and early February 2014, he used, persuaded, induced and enticed a female minor, under age 18, to engage in sexually explicit conduct that he recorded on a digital camera.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Lubbock County Sheriff’s Office investigated the case.  Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

DALLAS — Christian James Gieseke, 39, was sentenced yesterday, by U.S. District Judge Jane J. Boyle, to 20 years in federal prison to be followed by a 10-year term of supervised release.  Less than a week prior to the start of his trial last summer, Gieseke pleaded guilty to one count of receipt of child pornography.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

According to the factual resume filed in the case, Gieseke admitted that on a date, sometime between September 1, 2010, and June 7, 2012, while at his Garland, Texas, residence, used a camera to produce images of Jane Doe 3 and/or Jane Doe 4 engaging in sexually explicit conduct while one or both was naked in the shower.  He further admitted that he knew they were minors.  He further admitted that he downloaded the images and viewed them on his laptop computer.

Gieseke also admitted that he produced, or attempted to produce, images and/or video of two other minor girls.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”      

The Garland Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) conducted the investigation.  Assistant U.S. Attorneys Lisa J. Miller and Leigha Simonton prosecuted.

DALLAS — Leroy Nelson, 61, of DeSoto, Texas, appeared this morning before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to his role in a $5 million staged accident fraud scheme, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, Nelson pleaded guilty to one count of mail fraud and one count of engaging in illegal monetary transactions.  He faces a maximum statutory penalty of 20 years in federal prison on the mail fraud count and 10 years in federal prison on the illegal monetary transactions count.  In addition, each count carries a fine of up to $250,000, and restitution could be ordered.  Sentencing is set for July 7, 2014, before U.S. District Judge Sam A. Lindsay.

According to the plea agreement filed in the case, Nelson agrees to forfeit several vehicles, a motor home, a boat and trailer and real estate in Duncanville and Cooper, Texas.

According to the factual resume filed in the case, beginning in 2005 and continuing through 2012, Nelson engaged in a scheme to defraud automobile insurance companies by fabricating and submitting false and fraudulent claims for damage to technical equipment damaged in fictitious road accidents.

As part of the scheme, Nelson promised cash payments to individuals he recruited for them to falsely report to their automobile insurance company that, while driving, they inadvertently damaged a piece of equipment.  Typically, the individual would falsely report that while driving, he or she had either rear-ended a trailer pulling equipment, or swerved to avoid something in the road and collided with equipment on the side of the road.  Nelson would instruct the individual on how to make the telephone call to the insurance company. 

Nelson then prepared and submitted the claims for property damage in the name of a “DBA” he created.  The claim would include a photo of the equipment and a fictitious repair estimate that Nelson prepared.  The damaged equipment was described as very technical in nature, such as:  a “Remote Aircraft Landing Marker,” a “chemical Pipeline Examiner” or a “Seismographic Probe.”  The claimed repair expenses would usually be from $16,000 to $19,000.

Nelson opened private mailboxes in states including Minnesota, Missouri, Washington, Arizona, Connecticut and Louisiana to receive the insurance checks.  The mailboxes were opened under an assumed business name that Nelson used as the owner of the damaged equipment in the claims.  Nelson also used the addresses of two warehouses on Explorer Street in Dallas, and directed that mail received at the private mailboxes be forwarded to one of those two addresses.

The cumulative total of the insurance claims prepared and submitted to insurance companies by Nelson from 2005 to 2012 totaled approximately $5 million.

This investigation was brought to the attention of federal law enforcement by the National Insurance Crime Bureau (NICB) and Farmers Insurance Group, Special Investigations.  The FBI, Internal Revenue Service Criminal Investigation and U.S. Postal Inspection Service conducted the investigation.  Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.

DALLAS — Erika Susan Perdue, 43, of University Park, Texas, was sentenced today by U.S. District Judge Sam A. Lindsay to 168 months (14 years) in federal prison and an eight-year term of supervised release following her guilty plea in September 2013 to one count of transporting and shipping child pornography.  In addition, Judge Lindsay ordered Perdue to pay a $10,000 fine and $5,000 in restitution to one of the victims identified by the National Center for Missing and Exploited Children as “Vicky.”  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

A federal grand jury returned a four-count indictment in May 2012 charging Perdue with two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography.  Purdue has been in custody since June 2012 when the court found that she had violated its conditions.

On January 4, 2012, a special agent with the FBI, and on January 5, 2012, an FBI Task Force Officer with the Plano Police Department, each acting online in an undercover capacity and assuming someone else’s identity, launched publicly-available peer-to-peer file-sharing programs and discovered that an individual, using the username, “Classybitch,” later identified as Perdue, was logged on to the network.  They observed that the individual’s shared folder contained numerous files, many with names consistent with child pornography.  They downloaded files, directly from this individual’s computer, and several did contain child pornography, including one video of a man and a woman engaged in sexually explicit conduct with a minor child.  That video is described in Count One of the indictment for which Perdue is pleading guilty. 

A search warrant was executed at Perdue’s resident on April 10, 2012.  She admitted that one of her screen names was “Classybitch,” and that she traded child pornography while her husband was at work.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The investigation was conducted by the FBI and the Plano Police Department.  Assistant U.S. Attorney Camille Sparks prosecuted.

Co-defendants Who Were Convicted at Trial are Awaiting Sentencing on Conspiracy and Health Care Fraud Convictions

DALLAS — Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, was sentenced this morning by U.S. District Judge David C. Godbey to 57 months in federal prison and ordered to pay $9,484,111 in restitution to the Centers for Medicare and Medicaid Services (CMS).  Dr. Padron pleaded guilty in September 2013 to one count of count of conspiracy to commit health care fraud stemming from his role as medical director of a physician house-call company, A Medical House Calls (A Medical).  Dr. Padron has been in custody since his arrest in June 2012.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Two co-defendants in the case, Lawrence Dale St. John, 67, and his son, Jeffrey Dale St. John, 42, both of Grand Prairie, Texas, were each convicted at trial in October 2013 on one count of conspiracy to commit health care fraud and 13 counts of health care fraud related to their operation of A Medical, which they owned and operated.  Each count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine.  Restitution could also be ordered.  Both are in custody and sentencing hearings are scheduled for March 31, 2014. 

Dr. Padron joined A Medical as its medical director in December 2009.  A Medical, which was also known as A+ Medical House Calls and ANM Physician House Calls, provided physician visits to Medicare beneficiaries in their homes, rather than at a doctor’s office.  A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas.  Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.

Once A Medical established a Medicare beneficiary for physician home-visit services, it would submit billing for fraudulent care plan oversight claims.  The company did not provide primary care physician services to Medicare beneficiaries.

From May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program.  A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit.  The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.

In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all.  Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.

In a separate case, Dr. Padron entered a guilty plea to one count of conspiracy to distribute a controlled substance stemming from his operation of Padron Wellness Clinic, a “pill-mill,” that he operated in Dallas.  A sentencing date has not been set in this case.

The investigation was conducted by U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas.  Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are in charge of the prosecution.

DALLAS — Angel Medina, Jr., aka “June Bug,” of Dallas, was sentenced this morning by U.S. District Judge David C. Godbey to 120 months in federal prison following his guilty plea in October 2013 to one count of possession of methamphetamine with intent to distribute.  Medina, 27, has been in custody since his arrest in May 2013.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

On May 7, 2013, a federal grand jury sitting in the Northern District of Texas returned a five-count indictment against Medina, Jr., alleging that he sold methamphetamine and cocaine base (crack cocaine) on multiple occasions.  According to documents filed in the case and evidence presented in court, Medina sold narcotics to an undercover officer with the Dallas Police Department.  In October 2013, Medina pleaded guilty to Count Five of that indictment, admitting that he knowingly sold an ounce of methamphetamine on June 24, 2012, to what turned out to be an undercover officer.  

The case was investigated by the Dallas Police Department; it was prosecuted by Assistant U.S. Attorney Jason D. Schall.

Defendant Sold “Salad Bowl” Franchises in California and Texas

DALLAS — A Irving, Texas, man who pleaded guilty in April 2013 to one count of wire fraud stemming from his role as registered agent, director and incorporator of The Salad Bowl Franchise Corporation, was sentenced this morning by U.S. District Judge David C. Godbey.

Michael David Carroll, 38, was sentenced to 70 months in federal prison and ordered to pay $1,437,040 in restitution.  Judge Godbey ordered that Carroll surrender to the Bureau of Prisons by May 16, 2014.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.

According to documents filed in the case, as well as testimony at today’s sentencing hearing, from November 2008 through September 2010, Carroll ran a scheme to defraud potential investors, and to obtain money and property under false and fraudulent pretenses, by fraudulently inducing investors to purchase a “Salad Bowl” franchise from him.

As part of the scheme to defraud, Carroll obtained funds from several investors by selling “Salad Bowl” franchises to investors in California and Texas.  He provided false financial data to investors including inflated daily and monthly sales figures at some franchise locations.  He also falsely represented to some investors that investment funds would be used only to fund franchise construction expenses and to purchase franchise restaurant equipment related to that investor.  Carroll, however, admitted that he co-mingled investor funds into his operating account and then used investor funds for his own personal use.

Carroll falsely represented to some investors that some franchise equipment at particular franchise store locations would be fully owned by the investor as part of a “turnkey operation,” when in fact, Carroll had only leased some of the franchise equipment.  He also fraudulently altered financial statements to represent falsely inflated sales to deceive potential investors about income generated by retail sales at franchise store locations.

Carroll admitted that he forged his business partner’s signature on a $23,000 loan secured by account receivables on a “Salad Bowl” restaurant.  He also admitted concealing his bankruptcy filings from several potential investors in order to deceive them about his true financial condition and history.

The FBI investigated the case and Assistant U.S. Attorney David L. Jarvis prosecuted.

Defendant Sandy Jenkins Allegedly Embezzled More than $16 Million from Corsicana Business, Which Sandy and Kay Jenkins Used on a Lavish Lifestyle

DALLAS — A federal grand jury returned a 22-count superseding indictment today charging Sandy Jenkins, 65, and his wife, Kay Jenkins, 63, both of Corsicana, Texas, with various felony offenses stemming from Sandy Jenkins’s alleged embezzlement of approximately $16 million from his former employer, the Collin Street Bakery (Bakery) in Corsicana, which was used by Sandy and Kay Jenkins to maintain an extensive and lavish lifestyle.  This indictment supersedes a 10-count indictment, returned in September 2013 that charged Sandy Jenkins with 10 counts of mail fraud stemming from the alleged embezzlement.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.

Jenkins served as the Corporate Controller for the Bakery from February 1998 to June 21, 2013.  On June 21, 2013, Jenkins was terminated after the Bakery discovered the alleged fraud.  He has been in custody since his arrest in August 2013 on related charges outlined in a criminal complaint.  Kay Jenkins is expected to self-surrender and make her initial appearance on Tuesday, March 18, 2014.  Sandy Jenkins will appear in court at date to be determined.

This superseding indictment charges Sandy Jenkins with 10 counts of mail fraud and three counts of money laundering.  In addition, Sandy and Kay Jenkins are also each charged with one count of conspiracy to commit money laundering; six counts of money laundering and aiding and abetting; and two counts of making a false statement to a financial institution.

This indictment alleges that from December 2004 until June 21, 2013, Sandy Jenkins schemed to embezzle funds from the bakery for his and Kay’s self-enrichment.  Between 2005 and 2013, Sandy Jenkins allegedly caused approximately 888 fraudulent checks to be written on the Bakery’s account and mailed to his personal creditors, resulting in losses to the Bakery of approximately $16,649,786.

Starting in at least December 2004 and continuing through approximately August 12, 2013, Sandy and Kay Jenkins conspired together to maintain an extensive and lavish lifestyle through expenditures of the money embezzled from the Bakery.  During this time, Sandy and Kay Jenkins maintained a vacation home in Santa Fe, New Mexico, a multi-million dollar watch and jewelry collection, luxury automobiles, and took numerous trips on private jets, among other things, funded with money Sandy Jenkins stole from the Bakery.

During that time, Sandy and Key Jenkins incurred more than $11 million in charges on American Express credit cards, which were subsequently paid with monies embezzled from the Bakery.  Those charges included, among other things, approximately $3.3 million in payments for approximately 223 trips on private jets contracted through North Dallas Aviation to various locations including Santa Fe; Napa, California; and Aspen, Colorado.  The Jenkins also used funds Sandy Jenkins embezzled to deposit into their joint bank accounts, purchase a 2010 Mercedes-Benz, a 2013 GMC Yukon Denali, and a $25,000 men’s Patek Philippe 18 karat rose gold watch.

The indictment further alleges that Sandy and Kay Jenkins knowingly made false statements, i.e., overstating their monthly income, to financial institutions in connection with their applications for a mortgage loan to purchase a residence in Santa Fe.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, the maximum statutory penalties, per count, are: mail fraud – 20 years in federal prison and a $250,000 fine; conspiracy to commit money laundering and money laundering – 10 years in federal prison and a $250,000 fine, or alternatively, not more than twice the amount of the criminally derived property involved in the transaction; and making false statements to a financial institution – 30 years in federal prison and a $1 million fine.

The indictment also includes a forfeiture allegation that would require Sandy and Kay Jenkins to forfeit not only the total proceeds derived from the offense ($16,649,786), but also property including: real estate in Corsicana and Santa Fe; vehicles, including a Mercedes, a Lexus, a GMC Denali and a BMW; more than $440,000 in currency seized or surrendered to date; one Steinway piano; electronic equipment; six firearms; furs, jewelry, precious gems and metals, watches, handbags, luggage, shoes, crystal and miscellaneous collectables; a wine and liquor collection; artwork seized from the residence in Santa Fe; and two watches seized from deBoulle Diamond & Jewelry, Inc.

The FBI is conducting the investigation.  Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.

(Download Factual Basis)

Defendant Faces Up to 70 Years in Federal Prison

DALLAS — Following a two-day trial before U.S. District Judge Barbara M. G. Lynn, and less than one hour of deliberation, a federal jury has convicted a 43-year-old Dallas man on various child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. 

Ted Lynn Snider was convicted on two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography.  Each of the transporting and shipping child pornography counts, as well as the receipt of child pornography count, carries a statutory penalty of not less than five years or more than 20 years in federal prison and a $250,000 fine.  The possession count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine.  Sentencing is set for June 27, 2014. 

The government presented evidence that in May 2013, the FBI discovered a particular individual, later identified as Snider, was online sharing images and videos of young children engaged in vile and graphic sexual acts.  On May 29, 2013, the FBI executed a search warrant at Snider’s residence, and while at the residence, agents spoke with him.  Snider admitted he had been using a file sharing program to trade files depicting child pornography and that he maintained a categorized, child pornography collection on his computer and external hard drives.  The FBI seized electronic evidence that contained hundreds of images and videos of child pornography.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The FBI investigated.  Assistant U.S. Attorney Camille Sparks and Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay prosecuted.

LUBBOCK, Texas — Nicholas Lee Blair, 31, was sentenced today by U.S. District Judge Sam R. Cummings to 210 months in federal prison and a lifetime of supervised release, following his guilty plea in November 2013 to an indictment charging one count of production of child pornography.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the documents filed in the case, on or about December 25, 2012, when he resided in Lubbock, Texas, Blair persuaded a minor female, “Jane Doe,” to engage in sexually explicit conduct while he used his cellphone camera, aimed at her while she was in the bathroom of his home, to record a video of her.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”      

The Lubbock Police Department and the FBI investigated.  Assistant U.S. Attorney Steven M. Sucsy prosecuted.

DALLAS — Steven Chen Yu, 40, of Allen, Texas, was sentenced today by U.S. District Judge Jane J. Boyle to 51 months in federal prison, following his guilty plea in July 2013 to an information charging wire fraud in connection with his attempt to embezzle approximately $1 million from his employer, Hudson Advisors, LLC and its global subsidiaries (Hudson).  Judge Boyle also ordered that Yu pay approximately $365,000 in restitution and surrender to the Bureau of Prisons on April 9, 2014.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.   

Hudson was a globally integrated asset management company that performed due diligence and analysis, asset management and other support services for Lone Star Funds, a leading private equity firm that invested globally in distressed assets.  Hudson employed approximately 800 professionals in the U.S. and had affiliate offices in Europe, Canada and Japan.  Hudson’s main offices were in Dallas.

Hudson maintained a private client department that employed several private client managers.  It was responsible for providing accounting and bill payment services for Hudson owner J.G.  As part of his duties, Yu was authorized by Hudson to access all of J.G.’s personal financial information.

From September 2009 through March 2012, Yu engaged in several fraudulent acts which enabled him to embezzle substantial funds belonging to J.G.  For example, from September through October 2009, Yu fraudulently re-submitted duplicate invoices for legitimate repair work that had been done on J.G.’s boat, knowing that the invoices had already been paid.  Yu substituted his own personal bank account information, and in this manner, was able to fraudulently divert and embezzle $150,572 from J.G.’s accounts.

In another scheme, and in a similar manner, on December 1, 2009, Yu defrauded J.G. by also using duplicate invoices for landscaping work that had previously been done on J.G.’s personal residence in Massachusetts.  Yu was able to fraudulently divert and embezzle more than $69,000 in funds from one of J.G.’s trust accounts for duplicate payment on the landscaping work.  However, later in December 2009, Yu fraudulently caused the more than $69,000 to be deposited back into the account from which they had been diverted prior to Hudson becoming aware of any of Yu’s unlawful activities in connection with the fraudulent diversion or embezzlement of funds.

As part of a larger scheme, beginning in 2009 and continuing through March 2012, Yu fraudulently used and diverted J.G.’s funds which Yu used to make advance “estimated tax payments” for Yu’s benefit in connection with his own future state income taxes due in Massachusetts.  When Yu filed his personal income tax returns with Massachusetts, he claimed that he owed no taxes and requested Massachusetts pay him a complete refund of all the estimated tax payments he had made to the state with funds he had stolen from J.G.

During the period from about 2009 through March 2012, as part of his scheme to defraud, Yu attempted to steal and embezzle a total of approximately $1,292,000 from Hudson owner J.G.

The FBI conducted the investigation; Assistant U.S. Attorney David L. Jarvis prosecuted.

DALLAS — Ulises Sandoval, 27, of Dallas, was sentenced today by U.S. District Judge Ed Kinkeade to serve a total of 300 months (25 years) in federal prison following his guilty plea in November 2013 to one count of production of child pornography and one count of possession of prepubescent child pornography.  Specifically, Judge Kinkeade sentenced him to 300 months on the production conviction and 240 months on the possession conviction, to run concurrently.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the factual resume filed in the case, special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) received information that a person, later identified as Sandoval, was trading images of child pornography over email. They executed a search warrant at his home on September 25, 2013, and arrested him.

Sandoval admitted using his email address to join a website for the purpose of trading images and videos of child pornography, and he also admitted using email to meet individuals with a similar interest in child pornography to trade child pornography with them.  He admitted taking photographs of “Jane Doe,” who was less than seven years old at the time, while he engaged in sexually explicit conduct with her, and then sharing those images with others.

Forensic analysis located images of child pornography on Sandoval’s laptop computer.  Sandoval admitted that he had more than 2500 child pornography images and videos on his hard drive and some of those depicted sadistic and or violent conduct; 21 of the files depicted infants and toddlers.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”      

ICE HSI investigated.  Assistant U.S. Attorney Camille Sparks prosecuted.

WICHITA FALLS, Texas— A Wichita Falls, Texas, man, David Calandreli, 27, who pleaded guilty in November 2013 to one count of conspiring to possess with intent to distribute and to distribute methamphetamine, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 300 months (25 years) in federal prison.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, Calandreli admitted that on multiple occasions between November 2011 and July 2012, he transported and distributed quantities of methamphetamine, which he had obtained from co-conspirator Steve Ysasaga, to individuals in the Wichita Falls area.  In addition, on more than one occasion, Calandreli obtained quantities of more than one-quarter pound of methamphetamine from Ysasaga.  Ysasaga, 41, of Arlington, Texas, was sentenced in late February 2014 to 240 months in federal prison.

Calandreli also admitted that on December 7, 2011, he sold approximately 7.6 grams of methamphetamine to an undercover federal law enforcement officer in the parking lot of a grocery store in Wichita Falls.

To date, all 39 defendants charged in this conspiracy have entered guilty pleas; 38 have been sentenced. 

This Organized Crime and Drug Enforcement Task Force (OCDETF) case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas DPS; and the Wichita Falls Police Department.  Assistant U.S. Attorney Mary F. Walters is in charge of the prosecution.

DALLAS — Following a three-day jury trial before U.S. District Judge Jorge A. Solis, a federal jury has convicted Victor Chapa, 32, of Irving, Texas, on one count of conspiracy to possess with intent to distribute more than 100 kilograms of marijuana and one count of possession of a firearm in furtherance of a drug trafficking crime.  Today’s announcement was made by U.S. Attorney R. Saldana. 

Chapa’s five co-defendants have pleaded guilty to their respective roles in the conspiracy and are awaiting sentencing.  Chapa faces a mandatory minimum statutory penalty of five years and a maximum of forty years in prison on the conspiracy conviction and a mandatory minimum statutory penalty of five years and a maximum penalty of life in prison on the firearm conviction, which must be consecutive to the conspiracy conviction.  A sentencing date was not set.

The government presented evidence at trial that the conspirators used a residence and outbuilding containing an apartment on Harlan Street in Irving to store, repackage for distribution and distribute quantities of marijuana.  When a search warrant was executed at the site, officers recovered handwritten notes on spiral notebooks and on loose pieces of paper that reflected marijuana sales, identified customers and noted amounts of money owed for marijuana, along with firearms in the main residence.  In the detached apartment, law enforcement located wrappings, also known as marijuana “skins,” that previously contained approximately 528 pounds of marijuana, loose marijuana on the floor, cellophane wrapping, zip lock bags, digital scales, several loaded firearms and additional ammunition.

The North Texas High Intensity Drug Trafficking Area (HIDTA) Task Force and the Irving, Fort Worth and Dallas Police Departments investigated.  Assistant U.S. Attorney Mary Walters prosecuted. 

LUBBOCK, Texas — Members of a three-person methamphetamine trafficking ring that operated in Lubbock, Texas, were sentenced this morning in federal court by U.S. District Judge Sam R. Cummings.  Two of the defendants, Michael Armenta, 19, and Fernando Valenzuela-Ceballos, 26, received lengthy federal prison sentences of 210 months and 262 months, respectively.  Armenta’s wife, Kutleza Aurora Rodriguez, 19, was sentenced to 27 months in federal prison.  Armenta and Valenzuela-Ceballos will also be deported after they have served their federal sentence.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Armenta, aka “Alex,” and Valenzuela-Ceballos, aka “Gordo,” each pleaded guilty in November 2013 to one count of possession with intent to distribute 500 grams or more of methamphetamine and aiding and abetting.  Rodriguez pleaded guilty at the same time to one count of misprision of a felony, admitting she allowed them to use her bag to conceal methamphetamine.

On September 2, 2013, officers with the Lubbock Police Department, who were investigating Armenta and Valenzuela-Ceballos for methamphetamine trafficking, executed a search warrant at a residence on 47th Street in Lubbock where they, along with Rodriguez, lived.  Rodriguez was home at the time of the search.  During the execution of the warrant, law enforcement found seven pounds of methamphetamine, 13 empty one-pound wrappings that appeared to have contained pound quantities of methamphetamine, drug ledgers, packaging materials, scales, approximately $16,000 in cash and two firearms. 

The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lubbock Police Department and the Texas Department of Public Safety conducted the investigation.  Assistant U.S. Attorney Justin Cunningham prosecuted.

Defendants Ordered to Pay for Medical Monitoring for Victim-Workers in the Asbestos Removal Project

DALLAS — Jonathan Isaac Shokrian, 29, who served as a Regional Director at Califco, LLC, with oversight of the company’s business operations in Texas, was sentenced yesterday afternoon on a felony conviction related to an asbestos removal project.  Chief U.S. District Judge Sidney A. Fitzwater sentenced Shokrian to 12 months and 1 day in federal prison and ordered him to pay a $25,000 fine following his guilty plea in June 2013 to one count of failure to notify under the Clean Air Act.  His father, Elias Shokrian, Califco’s President and CEO, appeared today on behalf of the corporation, which has paid a $500,000 fine, for the same offense.  Both defendants were ordered to pay for medical monitoring for victim-workers.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

During the pronouncement of sentencing, Chief Judge Sidney A. Fitzwater acknowledged the danger to the public health from asbestos exposure and the importance of adherence to EPA standards for its proper removal. 

“This office is committed to holding those accountable who willfully violate federal laws designed to protect us from exposure to toxic materials,” said U.S. Attorney Saldaña.

Califco is a property management company headquartered in Beverly Hills, California; it has a regional office located on North Story Road in Irving, Texas.  Califco owns and operates several commercial properties in the Dallas area, including Plymouth Park Shopping Center on North Story Road in Irving and Crest Plaza Shopping Center on South Lancaster Road in Dallas. 

The Clean Air Act authorizes the U.S. Environmental Protection Agency (EPA) to establish standards to prevent or limit the emission of hazardous air pollutants into the atmosphere.  The EPA has enacted regulations under the Clean Air Act that control the removal, handling and disposal of asbestos.

“There is no safe level of exposure to asbestos,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Texas.  “Asbestos can cause cancer and other serious respiratory diseases and it must be handled legally and safely.  The defendants ordered their workers to remove asbestos-containing materials illegally, putting them at great risk.  This case should serve notice that EPA and its partner agencies will prosecute anyone who ‘cuts corners’ by avoiding the costs of handling or disposing of asbestos properly.”

In 2008, Califco and Jonathan Shokrian contracted with a specialized asbestos abatement contractor to remove asbestos from an old movie theater in the Crest Plaza Shopping Center.  That abatement was conducted in compliance with all federal, state and local regulations and was completed in October 2008.

Approximately one month later, Jonathan Shokrian decided to conduct a renovation of the abandoned former Fazio’s department store in the Plymouth Park Shopping Center.  Rather than hiring a professional asbestos abatement contractor, as Califco had done on its Crest Plaza Project, Shokrian attempted to save money by employing two day laborers to remove ceiling tile and floor tile and mastic from the Fazio’s building, even though he knew these materials contained asbestos.

While Califco provided the day laborers with masks, respirators and other tools to facilitate the removal of the asbestos-containing material, the masks and respirators were not adequate to protect the workers from the asbestos fiber.  Shokrian did not inform the day laborers on the site, or the Califco-employed maintenance worker, that there was asbestos in the tile and mastic being removed.  Neither Shokrian nor any other Califco employee notified any of the other commercial tenants of the Plymouth Park Shopping Center that asbestos-containing materials were being removed from the Fazio’s building.

In mid to late February 2009, day laborers, under Shokrian’s supervision, began using large amounts of gasoline to remove the remaining asbestos-containing floor tile mastic in the Fazio’s building.  On February 27, 2009, after responding to a call regarding the overwhelming smell of gasoline in the area around the Plymouth Park Shopping Center, the Irving Fire Department ordered the evacuation of the shopping center and a portion of a nearby residential neighborhood because of the concentration of gasoline fumes in the Fazio’s building.

The EPA and the Texas Department of State Health Services conducted the investigation.  Assistant U.S. Attorney Errin Martin prosecuted and Assistant U.S. Attorney Melissa Childs coordinated the fine collection. 

DALLAS — A Plano, Texas, man was sentenced this morning by U.S. District Judge Ed Kinkeade to 46 months in federal prison, and ordered to pay $118,139 in restitution on a conspiracy conviction stemming from his role in a tax refund fraud scheme, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Cephas Msipa pleaded guilty to a one-count superseding information in August 2013 charging one count of conspiracy.  He has been in federal custody since his arrest on an indictment in November 2012.  In today’s hearing, Judge Kinkeade stated that Msipa will be deported back to Zimbabwe after he serves his prison sentence.

According to the factual resume filed in Msipa’s case, Msipa admitted that from January 5, 2012, until June 2012, he was involved in a conspiracy to obtain tax refunds that were generated through the submission of fraudulent tax returns.  For his part in the conspiracy, Msipa opened bank accounts, using a false name, in order to receive the refunds from the fraudulently filed tax returns. 

Msipa used a forged United Kingdom passport to establish a private mail box at a postal store on Preston Road in Dallas.  Thereafter, according to the factual resume, Msipa used this false name, and the address of the mail box, to open three accounts at Bank of America and two accounts at Chase Bank.

The factual resume further states that during this time frame, co-conspirators electronically filed approximately 105 fraudulent tax returns using stolen identities and false income information that directed the Internal Revenue Service (IRS) to deposit a total of $118,139 in refunds into accounts Msipa opened.

In a related case, defendant Elijah Meskano, pleaded guilty to the same offense in May 2013.  Meskano, according to the factual resume filed in his case, from December 22, 2011, through November 29, 2012, also opened bank accounts using a false name to receive refunds from fraudulently filed tax returns.  According to a complaint filed in Meskano’s case, he and Msipa were roommates and lived in Plano, Texas.  Meskano is scheduled to be sentenced on April 3, 2014.

The investigation was conducted by IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).  Assistant U.S. Attorney Christopher Stokes prosecuted.

DALLAS — Keith Williams, aka “Chucky Blood,” 24, of Dallas, appeared in federal court yesterday and pleaded guilty, before U.S. Magistrate Judge Paul D. Stickney, to one count of sex trafficking of children.  He faces a maximum statutory penalty of not less than 10 years and up to life in federal prison and a $250,000 fine.  He is scheduled to be sentenced by U.S. District Judge David C. Godbey on June 9, 2014.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Williams’ co-defendant in the case, Erin Patton, 25, also of Dallas, is set for trial for June 2, 2014, on an indictment charging her with the same offense.  Both Williams and Patton are in custody.

According to documents filed in the case, in September 2012, after she ran away from home, 14-year-old “Jane Doe” met Erin Patton.  Patton let Jane Doe stay with her, and Patton facilitated Jane Doe’s engaging in commercial sex acts by driving her to locations where the acts occurred and providing her a cell phone so she could post her services on “Mocospace” and Backpage.com.  Jane Doe gave Patton money she earned from engaging in the sex acts.

Again, in November 2012, after she again ran away from home, Jane Doe contacted Patton.  This time, both Patton and Williams picked up Jane Doe and posted her availability to engage in commercial sex acts on Backpage.com.  While Williams went to serve a jail sentence shortly thereafter, Patton continued facilitating Jane Doe’s commercial sex acts.  Jane Doe eventually left.

In April 2013, Jane Doe again contacted Patton and told her she was still in school, but wanted to leave and wanted Patton to pick her up.  Patton and Williams agreed to let Jane Doe stay with them, but they told her she was going to have to engage in commercial sex acts, as she had done in the past, to pay for her expenses.  Williams and/or Patton drove Jane Doe to meet with customers and Jane Doe gave all the money she earned to Williams and Patton.

On May 4, 2013, officers with the Dallas Police Department (DPD) encountered now 15-year-old Jane Doe, in a car parked in an area known for prostitution.  Williams came by shortly thereafter.  He admitted knowing she was 15, driving her to meet with customer and collecting proceeds from her “dates.”

DPD led the investigation, with assistance from the FBI.  Assistant U.S. Attorney Cara Foos Pierce is prosecuting.

DALLAS — The last defendant convicted in the cocaine distribution conspiracy case that involved former NFL player Sam Hurd, III, was sentenced this afternoon in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña, of the Northern District of Texas.

Toby Lujan, 28, of Dallas, was sentenced by U.S. District Judge Jorge A. Solis, to 41 months in federal prison.  He was ordered to surrender to the Bureau of Prisons on April 2, 2014.  Lujan pleaded guilty in September 2012 to one count of possession with intent to distribute cocaine. 

Hurd was sentenced in November 2013 to serve 15 years in federal prison.  He pleaded guilty in April 2013 to conspiring to possess with the intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana.  In addition, in June 2012, Hurd, while on pretrial release, attempted to possess with intent to distribute five kilograms or more of cocaine and at least 50 kilograms, but less than 100 kilograms, of marijuana.

Hurd’s cousin, Jesse Tyrone Chavful, of San Antonio, Texas, was sentenced in October 2013 to serve a total of 127 months in federal prison.  He pleaded guilty in October 2012 to one count of conspiracy to possess with the intent to distribute five kilograms or more of cocaine.  Since he committed this offense while he was on supervision for a federal drug-related firearm offense, the Court revoked his supervision and ordered that he serve 30 months in custody, consecutive to the 97-month sentence that he received for the instant offense.

Lujan and Chavful agreed to help Hurd with his illicit drug venture which he ran while he played professional football for the Dallas Cowboys and then later after he began playing football for the Chicago Bears.

For instance, on July 27, 2011, Hurd provided $88,000 to Lujan to purchase several kilograms of cocaine for him, and Hurd also loaned Lujan his Cadillac Escalade to conduct the drug transaction.  Law enforcement officers stopped Lujan driving Hurd’s Cadillac and seized the $88,000 from a canvas bag containing marijuana residue.  Lujan continued to try to acquire cocaine for Hurd, at Hurd’s request, which ultimately led to the December 14, 2011, meeting at a Chicago steakhouse in which Hurd agreed to buy multiple kilograms of cocaine from an undercover officer posing as a drug trafficker, on a weekly basis, for $25,000 per kilogram.  Hurd was arrested as he left that steakhouse with a gift bag containing a one-kilogram sample of cocaine the “drug trafficker” gave him.

During fall 2011, while Hurd was playing football for Chicago, he contacted Chavful and asked him to find 10 kilograms of cocaine.  Chavful then met with witnesses at his T-shirt shop in San Antonio and negotiated the sale for Hurd.  On November 10, 2011, Chavful and a witness discussed drug loads going north, that is, to Hurd in Chicago.  Chavful advised the witness not to worry about the payment because Hurd had money.  Chavful also cautioned that Hurd could not be present when the drugs were delivered because of media concerns.

During spring 2012, while on pre-trial release for pending federal drug offenses, Hurd met with Chavful at his San Antonio T-shirt shop and asked him to get him cocaine and marijuana.  In late May, Chavful met with a witness and agreed to buy five kilograms of cocaine and 200 pounds of marijuana, and told the witness that Hurd, whom he described as the money, was in on the transaction and ready to move.  On June 6, 2012, federal law enforcement officers arrested Chavful after the witness and an undercover officer delivered the drugs to Chavful.  Chavful admitted that he had phoned Hurd that day, at the telephone number listed under Big Sam in his cell phone contacts, to let Hurd know about the drugs.

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated.  Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay and Assistant U.S. Attorney John Kull prosecuted.

Defendant Collected His Deceased “Father’s” Benefits

DALLAS — A Dallas man, Jose Alfredo Rodriguez, was sentenced today by U.S. District Judge Sam A. Lindsay to two years in federal prison and ordered to pay $168,920 in restitution, following his conviction at trial in October 2013 on felony offenses related to his theft of his deceased father’s Social Security retirement benefits, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

The jury deliberated just two hours to convict Rodriguez, 54, on one count of theft of government funds and three counts of making false statements.  At today’s sentencing hearing, Judge Lindsay ordered that Rodriguez surrender to the Bureau of Prisons on April 4, 2014.

The government presented evidence at trial that beginning in 1989, Fernando Loya began receiving Title II Retirement Insurance benefits from the Social Security Administration (SSA).  The SSA determined that Mr. Loya required a representative payee to manage his benefits on his behalf, and appointed Rodriguez, who considered Mr. Loya his father, as Mr. Loya’s payee.

In early September 2, 2011, in response to a request from the SSA to bring Mr. Loya and his identification information to the SSA office in Dallas, Rodriguez appeared without Mr. Loya and informed a SSA employee that Mr. Loya lived in Mexico.  On October 27, 2011, Rodriguez called the SSA and reported that Mr. Loya had passed away in Mexico on September 15, 2011. 

An investigation ensued and when confronted, Rodriguez conceded that the last time he went to Mexico to give Mr. Loya his benefits, was in 1992 or 1994.  Rodriguez also conceded that he did not know how or when Mr. Loya died, but believed it may have been in 1995, and that he sent no money to Mexico for his care after 1997.

The government presented further evidence at trial that on November 15, 2008, June 7, 2009 and May 20, 2011, Rodriguez made false statements or representations in documents used by the SSA to determine continued rights to Social Security benefits for Mr. Loya.  On those dates, Rodriguez stated that he had spent, respectively, $13,160, $13,640 and $14,184 for food, housing, clothing, medical and dental expenses, recreation and personal expenses for Mr. Loya, when he well knew he did not use those funds for Mr. Loya.

The case was investigated by the SSA’s Office of Inspector General.  Special Assistant U.S. Attorney Nicole Dana prosecuted.

DALLAS — An Allen, Texas, man, who pleaded guilty in April 2013 to one count of a misprision of a felony stemming from his involvement in a loan fraud scheme, was sentenced this morning by U.S. District Judge David C. Godbey, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jerry Goh, 51, a lawyer with offices in the Dallas-Fort Worth metroplex, was sentenced to serve seven months in federal prison and surrender to the Bureau of Prisons on May 26, 2014, to begin serving that sentence.  Judge Godbey also ordered that Goh serve the first seven months of a one-year term of supervised release on home confinement.  Goh will also be ordered to pay more than $2.1 million in restitution.

Two defendants also charged in the case, Plano, Texas, residents Vathany Teng and Lina Ma, have pleaded guilty to their roles in the fraud and are scheduled to be sentenced next month.   According to documents filed in the case, Goh, acting in his capacity as the escrow officer on the loan, and thus with control of the loan proceeds, concealed from the lender, Prosper Bank, the fraudulent release of $498,720 of loan proceeds to provide funds for a $431,000 down payment.  Goh wired $498,720 of lender Prosper Bank’s funds from an escrow account, knowing that these seller proceeds funds would later be used as the source of borrower Lina Ma’s down payment on her loan from Prosper Bank.  

This case was prosecuted in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.stopfraud.gov.

The case was investigated by the U.S. Small Business Administration – Office of Inspector General and the FBI.  Assistant U.S. Attorney David L. Jarvis prosecuted.

FORT WORTH, Texas – Brice Johnson, 19, of Springtown, Texas, has been charged in a federal criminal complaint with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person, the Justice Department’s Civil Rights Division, Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, and Diego Rodriguez, Special Agent in Charge of FBI Dallas Division announced.

The complaint was filed on Feb. 12, 2014, in U.S. District Court in Fort Worth, Texas.  Johnson has been in state custody since his arrest on Sept. 10, 2013, and he made his initial appearance in federal court yesterday afternoon.

“Suspected crimes of this nature will simply not be tolerated,” said U.S. Attorney Saldaña.  “With the assistance of all our partners, hate crimes will be prosecuted to the fullest extent of the law.”

“We will thoroughly investigate all suspected violations of the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act in our community,” said SAC Rodriguez.

According to the affidavit filed with the criminal complaint, in the early morning hours of Sept. 2, 2013, the adult male victim, identified as A.K., connected with Johnson through the cell phone application for MeetMe.com.  A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s page indicated he was not gay.  During their communications, Johnson said that he was interested in engaging in sexual activity with A.K.  He invited A.K. to his home, gave A.K. his cell phone number and address and they exchanged text messages planning their sexual activity.

After A.K. showed up at the house, Johnson severely beat him, then put him into the trunk of A.K.’s car and drove him to a friend’s home.  Based on ligature marks on A.K.’s wrists, it appears that he was bound with an electrical cord while he was in the trunk of the car.  Individuals at the home told Johnson to take A.K. to the hospital or they would call the police, and Johnson eventually drove the victim to an Emergency Medical Services station in Springtown.

A.K. was hospitalized for 10 days in Fort Worth, and he was diagnosed and treated for multiple skull and facial fractures.  The investigation revealed that on the night of the incident, Johnson saved A.K.’s cell phone number using a gay slur as a contact name and Johnson later stated that he was playing a prank on the victim because of his sexual orientation, again using a gay slur when referring to A.K.  According to the affidavit, A.K. said that he had no physical contact with Johnson prior to the attack.

A federal complaint is a written statement of the essential facts of the offenses being charged and must be made under oath before a magistrate judge.  The defendant is presumed innocent until proven guilty.  However, the statutory maximum penalty upon conviction for the offense as charged is 10 years in federal prison and a $250,000 fine.  The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment, and an indictment could include other charges that increase the maximum penalty.

The investigation is being conducted by the FBI, the Springtown Police Department and the Parker County Sheriff’s Office.  The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.

(Download Factual Basis)

LUBBOCK, Texas — Jose Fidencio Perez, 40, of Seagraves, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 121 months in federal prison, following his guilty plea in October 2013 to one count of possession of prepubescent child pornography and aiding and abetting, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, Perez used a file sharing program on his computer to download child pornography.  In the course of searching for depictions of sexually explicit conduct, Perez downloaded and viewed numerous videos depicting minors engaged in sexually explicit conduct.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Office of the Attorney General of New Mexico Investigations Division.  Assistant U.S. Attorney Steven M. Sucsy prosecuted.

Defendants Obtained Meth from Supply Sources in the DFW Metroplex and Distributed it to Customers in Wichita Falls

DALLAS — Two defendants, who pleaded guilty in 2013 to their respective roles in a major methamphetamine distribution conspiracy operating in Wichita Falls, Texas, have been sentenced to lengthy prison terms, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Yesterday, in federal court in Dallas, U.S. District Judge Reed C. O’Connor sentenced Steve Ysasaga, 41, of Arlington, Texas, to 240 months in federal prison.  Earlier this week, Judge O’Connor sentenced Roberto Macias, 34, of El Paso, Texas, to 180 months in federal custody.

According to documents filed in the case, on multiple occasions between mid-October 2010 and August 23, 2012, Ysasaga received multi-ounce quantities of methamphetamine from supply sources in the Dallas-Fort Worth (DFW) metroplex, which he then delivered and distributed to numerous customers in the Wichita Falls area.  He also coordinated the manufacturing, or cooking, of the methamphetamine and supplied the individuals who cooked it with the chemical precursors, such as pseudoephedrine tablets, which were needed to manufacture it.  Ysasaga admits that during the conspiracy, he possessed with intent to distribute and distributed more than one kilogram of methamphetamine.

On one occasion, in August 2012, when Ysasaga was transporting methamphetamine from his home to Wichita Falls, he was stopped by a Trooper with the Texas Department of Public Safety (DPS).  After a drug-detection dog alerted on Ysasaga’s truck, a search resulted in DPS seizing nearly 530 grams of methamphetamine that was concealed in a Portable 12v power source. 

Macias admitted that on multiple occasions between August 24, 2011 and February 29, 2012, he also received multi-ounce quantities from supply sources in the DFW metroplex and distributed quantities of the methamphetamine to numerous customers in the Wichita Falls area.  He further admitted transporting and arranging for others to transport methamphetamine from the DFW area to Wichita Falls.

To date, all 39 defendants charged in this conspiracy have entered guilty pleas; all but two defendants have been sentenced. 

This Organized Crime and Drug Enforcement Task Force (OCDETF) case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas DPS; and the Wichita Falls Police Department.  Assistant U.S. Attorney Mary F. Walters is in charge of the prosecution.

DALLAS — A convicted felon from Wichita Falls, Texas, was sentenced today by U.S. District Judge Reed C. O’Connor on firearm and drug convictions, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Juan Derrick Martinez, 32, was sentenced to 120 months in federal prison on each count of conviction, to run concurrently.  He pleaded guilty in July 2013 to an indictment charging one count of being a felon in possession of a firearm and one count of possession with intent to distribute methamphetamine.

According to documents filed in the case, on June 1, 1012, a Wichita Falls Police officer initiated a traffic stop on a pickup truck after observing a traffic violation on Iowa Park Road in Wichita Falls.  Martinez was the third passenger in the car, seated next to the passenger side door.

A narcotics detection canine alerted on the truck’s right front floorboard.  A plastic bag containing three smaller plastic bags was located under the passenger seat.  The contents of one plastic bag tested positive for cocaine while the contents of the other two bags tested positive for methamphetamine.  Inside of a backpack, which was between Martinez’s legs when the truck was stopped, were several small plastic bags, a small plastic scale, and a loaded 9mm semi-automatic pistol.

This case was investigated by the Texas Department of Public Safety, the Wichita Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Assistant U.S. Attorney Mary F. Walters prosecuted.

Impoverished Taxpayers Were Recruited to
Allow Their Names and SSNs to be Used in Filing Fraudulent Returns

DALLAS — All six defendants convicted for their respective roles in a tax refund scheme involving the misuse of the First-Time Home Buyer Tax Credit, have now been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas

At a hearing yesterday afternoon, U.S. District Judge Jorge A. Solis sentenced Rickel Shine to 34 months in prison and ordered him to pay nearly $115,000 in restitution.  Jarrod Phread Altman was sentenced to eight months’ home confinement as part of a three-year term of probation.  Judge Solis will impose restitution as to Jarrod Phread Altman at a later date. 

Three other defendants convicted in the case, Jason Phread Altman, Emanuel James Harrison and Fread Jamille Jenkins were each recently sentenced to 84 months in federal prison.  Jason Altman, Harrison, and Jenkins were each ordered to pay restitution of more than $860,000.  Billy Hamilton was sentenced to 13 months in federal prison and ordered to pay nearly $52,000 in restitution.

According to factual resumes filed in the case, Jason Altman and his brother, Jarrod Altman, and Emanuel James Harrison owned and operated a tax preparation business, Tax On the Run, located in Dallas.  Jenkins worked as office manager for the business, while Shine and Hamilton worked as intermediaries and recruited clients on behalf of the owners.

Beginning in March 2009, Jason and Jarrod Altman, Jenkins, Harrison, Shine and Hamilton conspired to defraud the IRS, according to the factual resumes filed in the case.  They used Tax On the Run to file false Forms 1040, in the names of numerous clients, which overstated and fabricated income and tax deductions on Schedule C and Forms 5405 by falsely representing that the taxpayers were entitled, under the provisions of the Housing and Economic Recovery Act of 2008, to claim a tax credit as a first-time homebuyer.  As part of the scheme, according to factual resumes filed in their cases, Shine and Hamilton acted as intermediaries to recruit clients, and they were paid after they recruited impoverished taxpayers to allow their names and social security numbers to be used to file fraudulent tax returns.  The fraudulent returns were routinely filed even though the tax preparers never met the taxpayers and with the full knowledge that none of the taxpayers qualified to claim the credit, according to the factual resumes.

Tax On the Run used Santa Barbara Bank and Trust (SBBT) to process refund anticipation loans based on the fraudulent returns filed.  The factual resumes filed further state that after electronically filing the false tax returns, Tax On the Run would be notified by SBBT that the loan had been approved and a check could be printed and provided to the taxpayer.  Once the check was printed, the taxpayer was transported to a local check cashing business and instructed to cash the refund check.  After it was cashed, members of the conspiracy paid the taxpayer a small percentage of the refund and kept the remainder of the proceeds, according to the factual resume.

Defendant Jarrod Altman admitted, according to the factual resume filed in his case, that during tax year 2009, he failed to report approximately $71,133 in taxable income that was obtained from his business, Tax On the Run.  Of that amount, Jarrod Altman admitted that he received $53,140 in the form of a payment by check from Jason Altman for a 2007 Mercedes Benz S550, which was purchased in June 2009, for Jarrod Altman’s use, with money from Tax On the Run.  He further admitted that he falsely reported $57,207 in taxable income for tax year 2009 that did not include the $71,133 income described above, and as a result of his false statements regarding his taxable income, Jarrod Altman caused $20,135 in tax harm to the IRS.

The investigation was conducted by IRS Criminal Investigation.  Assistant U.S. Attorneys J. Nicholas Bunch, Brian Poe and Rick Calvert prosecuted.

FORT WORTH, Texas — A 57-year-old man from North Richland Hills, Texas, Joseph F. Greth, was sentenced this morning by U.S. District Judge John McBryde to 80 months in federal prison following his guilty plea in November 2013 to one count of possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed a search warrant at Greth’s home.  Among the items seized were 45 compact disks (CD) containing child pornography.  Greth admitted that he used his computer to search for images and videos of child pornography, downloaded them and burned them onto CDs and DVDs.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”      

The investigation was conducted by the Garland Police Department and ICE HSI.  Assistant U.S. Attorney Aisha Saleem prosecuted.

Federal Grand Jury Indicts William Kelcy on Theft of Government Property and Firearm Charges

LUBBOCK, Texas —  A federal grand jury in Lubbock has returned a two-count indictment against the former Chief of the Rising Star Police Department.  William Jason Kelcy, 41, is charged with one count of theft of government property and aiding and abetting and one count of theft of a machine gun and aiding and abetting.  Kelcy is expected to self-surrender in response to a summons and make an initial appearance before U.S. Magistrate Judge E. Scott Frost later this month.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Kelcy was employed as the Chief of Police of the Rising Star Police Department from June 11, 2009 to January 10, 2013.  Rising Star, Texas, is located approximately 55 miles southeast of Abilene, Texas, in southwestern Eastland County.

Under the National Defense Authorization Act, the Defense Logistics Agency is authorized to transfer excess Department of Defense (DOD) property to federal and state law enforcement agencies under what is known as the “1033 Program.”  The program was designed to increase the quality and quantity of equipment for law enforcement agencies by utilizing excess DOD property.

According to Count One of the indictment, during the time he served as police chief, Kelcy, by making false and fraudulent representations about the intended use and/or recipient(s) of equipment, sought and obtained more than $4 million worth of property and equipment from the 1033 Program.  Kelcy fraudulently gave, sold, bartered, or otherwise disposed of the equipment to other law enforcement agencies, officers, and private citizens with no law enforcement responsibilities.  In fact, Kelcy sold, traded, pawned or attempted to sell, trade, pawn, several high-value military surplus items that he fraudulently obtained through the 1033 Program.

Count Two of the indictment alleges that in late June 2012, Kelcy transferred and attempted to transfer a Thompson Ramo Wooldridge M14 machine gun.

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty.  However, upon conviction, each count of the indictment carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.

The Defense Criminal Investigative Service led the investigation with assistance from the City of Eastland, Texas and the Texas Department of Public Safety, which helps administer the 1033 Program throughout the state.  Assistant U.S. Attorney Amanda R. Burch of the U.S. Attorney’s Office in Lubbock is in charge of the prosecution.

FORT WORTH, Texas — A former carrier for the U.S. Postal Service, who pleaded guilty in October 2013 to one count of possession of stolen mail, was sentenced yesterday in federal court in Fort Worth, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Hubert Lavell McDonald, 42, of Fort Worth, was sentenced by U.S. District Judge Terry R. Means to 30 months in federal prison and ordered to pay more than $400,000 in restitution to Cash America International, Inc. (CAI).  Judge Means ordered that McDonald surrender to the Bureau of Prisons on March 10, 2014.

According to documents filed in the case, from June 2011 and December 2012, McDonald stole jewelry items mailed from CAI to the company’s corporate address in Fort Worth. 

On March 9, 2012, special agents with the U.S. Postal Service Office of Inspector General (OIG) executed a search warrant at McDonald’s residence.  Agents found a gold Bulova watch belonging to CAI that McDonald admitted he had stolen from his mail route.  Additionally, during the search, agents found one gold “Joe Rodeo” watch belonging to CAI and $8,000 in cash proceeds from the sale of other mail matter that had been stolen.

The case was investigated by the U.S. Postal Service OIG.  Assistant U.S. Attorney Chris Wolfe prosecuted.

Scheme Allegedly Caused at Least $1.9 Million in Losses to SNAP Program

DALLAS, Texas — Two North Texas men have been indicted on various felony offenses related to a massive food stamp fraud scheme they ran that allegedly caused at least $1.9 million in losses to the Supplemental Nutrition Assistance Program (SNAP), announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Kamardeen Ogunleye, 52, of Arlington, Texas, and Robert Gordon, 31, of Balch Springs, Texas, are each charged with one count of conspiracy to commit food stamp fraud, five counts of food stamp fraud and aiding and abetting, and six counts of wire fraud.  Ogunleye is also charged with two counts of structuring financial transactions.

Both Ogunleye and Gordon have made their initial appearances in federal court and have been released on bond.  The indictment, returned by a federal grand jury in Dallas in late January 2014, was unsealed this afternoon.

The indictment alleges that beginning in March 2010 and continuing until September 2013, the defendants conspired together and with others to run a scheme to commit food stamp fraud and wire fraud, and then one of the defendants, Ogunleye, structured financial transactions to avoid reporting requirements related to the proceeds of the scheme.

Ogunleye owned and operated KSO Dollar Mart, located at 1918 Martin Luther King Jr. Boulevard in Dallas.  Gordon managed the business for Ogunleye.  Ogunleye’s and Gordon’s scheme was funneled through this storefront, which offered very few food and beverage items to its customers.

According to the indictment Ogunleye and Gordon conspired to purchase food stamp benefits, administered through the SNAP, from actual recipients in exchange for cash at an approximate 50 percent exchange rate, meaning Ogunleye and Gordon would pay recipients approximately one dollar in exchange for every two dollars’ worth of benefits.  Recipients were then free to spend the exchanged-for cash without restrictions imposed on SNAP benefits.  The full amount of SNAP benefits redeemed, in exchange for discounted cash amounts, were deposited into Ogunleye’s bank accounts. 

As a result of the conspiracy and scheme, Ogunleye and Gordon obtained significant profits and caused losses of at least $1.9 million to the SNAP.  Ogunleye structured financial transactions involving the scheme’s proceeds to avoid and evade reporting requirements in an effort to conceal the scheme so that he and Gordon could use the proceeds for their own personal enrichment.

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty.  However, upon conviction, the charges carry the following maximum statutory penalties:  conspiracy to commit food stamp fraud - five years in prison and a $250,000 fine; each of the food stamp fraud counts - 20 years in prison and a $250,000 fine; each of the wire fraud counts - 30 years in prison and a $1 million fine; and each of the structuring counts - 10 years in prison and a $250,000 fine.

The case is being investigated by the U.S. Department of Agriculture Office of Inspector General.

Assistant U.S. Attorney P. J. Meitl is in charge of the prosecution.

AMARILLO, Texas — James Aaron Sims, 23, of Amarillo, Texas has been charged by a federal grand jury with one count of bank robbery, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

The indictment alleges that on February 3, 2014, Sims robbed the Texas Plains Federal Credit Union, located at 804 S. Madison in Amarillo, Texas.  Sims has been in custody since his arrest a few days after the robbery.

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty.  However, if convicted, the maximum statutory penalty for the offense of bank robbery, as charged, is 20 years in federal prison and a $250,000 fine.

The investigation is being conducted by the FBI and the Amarillo Police Department.  Assistant U.S. Attorney Jeffrey R. Haag, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

LUBBOCK, Texas — Jeremy Daniel Labrec, 23, formerly of Lubbock, Texas, was charged in a federal indictment, returned late yesterday by a grand jury in Lubbock, Texas, with one count each of production and possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Count One of the indictment alleges that in February 2011, Labrec persuaded, induced and used a minor male, under age 18, to engage in sexually explicit conduct so that Labrec could photograph him.

Count Two of the indictment alleges that between February 5, 2011, and March 17, 2011, when the FBI executed a search warrant at his residence in Lubbock, Labrec possessed a hard disk drive containing child pornography.

According to the Bureau of Prisons, Labrec is currently incarcerated at FCI Otisville, New York.  It is unknown when he will appear in Lubbock federal court to face these charges.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, the statutory penalty for the production count is not less than 15 years or more than 30 years in prison and for the possession count, not more than 10 years in prison.  Both counts also carry a fine of up to $250,000 and a term of supervised release of up to life.    

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The investigation is being conducted by the FBI.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

SHERMAN, Texas – A 39-year-old McKinney, Texas woman has pleaded guilty to federal violations stemming from her employment as a translator embedded with several U.S. military units in Afghanistan, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas and U.S. Attorney John M. Bales of the Eastern District of Texas.

Farida Yusufi, a U.S. citizen of Afghan origin, pleaded guilty to eight counts of a nine-count indictment, unsealed in August 2013, today before U.S. Magistrate Judge Amos Mazzant.  Specifically, Yusufi pleaded guilty to five counts of making false statements to a federal agency; two counts of altering a military, naval or official pass; and one count of theft of government records.  She has been in federal custody since her arrest in August 2013 by special agents with the FBI’s North Texas Joint Terrorism Task Force (JTTF).

According to documents filed in the case, Yusufi received a final Secret security clearance in August 2008, but it was suspended on October 1, 2009, and it was never reinstated.  Despite those facts, in an interview conducted by FBI and U.S. Army counterintelligence agents in Afghanistan in September 2011, Yusufi falsely told the federal agents that she possessed a Top Secret security clearance “in process,” which she knew was a false and misleading statement.  In that interview, to mislead the agents who were trying to determine whether she was gaining access to classified information at a U.S. base in Afghanistan without authorization, she also falsely told them that she had never been fired from a job.  In fact, she had previously been fired as a translator while working overseas for the U.S. military.

On March 22, 2012, Yusufi made false statements to FBI agents about whether she had provided false information on her security clearance application form and whether she had actually been employed by a particular U.S. government contractor.  She also made those false statements to mislead the FBI agents as to her actual statements to other federal agents and her employment history. 

On February 23, 2012, Yusufi again made a false statement to federal agents by stating that she had not applied for a position as a role player for a U.S. government contractor since her return from Afghanistan in September 2011, when, in fact, she had applied for such a position in June 2011 and inquired again about that application upon her return from Afghanistan earlier in September.

On January 18, 2010, Yusufi falsely made, altered and tampered with an official military or government pass, that is a Letter of Authorization issued by or under the authority of the U.S. government, and on March 13, 2013, Yusufi possessed an altered Letter of Authorization.  A Letter of Authorization is the equivalent of a set of military orders for a government contractor, such as a contract linguist being deployed overseas, and it enables access to military transportation and military bases.  The Letters of Authorization that Yusufi altered and possessed were never issued to her; rather, the original Letter of Authorization was issued to her former spouse.

On March 13, 2013, the FBI executed a search warrant at Yusufi’s home in McKinney.  On her computer, the FBI discovered sensitive U.S. military records that she obtained while embedded with the U.S. military and that she had no authority to possess or retain.  She admits that she knew she had no right to possess or keep those records, and that she had converted them to her own use.

Statutorily, Yusufi faces a maximum penalty of five years in federal prison and a $250,000 fine for each of the false statement and altering a military, naval or official pass counts, and 10 years in federal prison and a $250,000 fine for the one count of theft of government records.  However, according to the plea agreement, if acceptable to the Court, the parties have agreed that a sentencing range of 33 to 41 months in federal prison is an appropriate sentencing range.  Yusufi also agreed to pay a $50,000 fine.  Yusufi acknowledges that she may not withdraw her plea should the Court choose not to follow these sentencing recommendations.  A sentencing date was not set.

The case was investigated by the FBI’s North Texas JTTF.

Assistant U.S. Attorneys Errin Martin and Mark Penley, of the U.S. Attorney’s Office in Dallas, and Assistant U.S. Attorney Andrew Stover, of the U.S. Attorney’s Office in Plano, Texas, are prosecuting.

LUBBOCK, Texas — Dale Wray Fulford, 77, of Slaton, Texas, has been charged in a federal indictment with one count of production of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. 

Fulford is currently in custody on related state charges.  A date has not yet been set for him to make his initial appearance in federal court.

The indictment alleges that between February 2013 and early February 2014, Fulford used, persuaded, induced and enticed a female minor, under age 18, to engage in sexually explicit conduct that he recorded on a digital camera.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, the statutory penalty is not less than 15 years or more than 30 years in federal prison, a $250,000 fine and a lifetime of supervised release. 

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The investigation is being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Lubbock County Sheriff’s Office.  Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

One Defendant Also Faces Firearms Charges

LUBBOCK, Texas— A federal grand jury returned a four count indictment late yesterday charging seven defendants for their roles in a conspiracy to distribute cocaine, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Each of the following defendants is charged with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine:

Manuel Carrillo Ortiz, 38

Martin Cardona Gutierrez, 46

Refugio Navarrete Gutierrez, 34

Efren Fabela Lopez, 34

Gisselle Lujan, 26

Jerardo Salcedo Garcia, 27

Javier Lopez Lujan, 47

Defendants Manuel Ortiz, Martin Gutierrez, Refugio Gutierrez and Efren Lopez are also each charged with one substantive count of possession with intent to distribute five kilograms or more of cocaine and aiding and abetting.

Defendant Martin Gutierrez is also charged with one count of being a felon in possession of a firearm and one count of possession of a firearm in furtherance of a drug trafficking crime.

All of the defendants, except for Javier Lopez Lujan, are in custody.  Javier Lopez Lujan remains at large.  A date has not yet been set for them to make their initial appearance in federal court.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, the statutory maximum penalties are:  conspiracy - life in prison and a $10 million fine; possession - life in prison and a $10 million fine; felon in possession of a firearm - 10 years in prison and a $250,000 fine; and possession of a firearm in furtherance of a drug trafficking crime - life in prison and a $250,000 fine. 

The investigation is being conducted by the Lubbock County Sheriff’s Office, Ector County Sheriff’s Office, Midland Police Department, Texas Department of Public Safety, Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Border Patrol.

Assistant U.S. Attorney Justin Cunningham is in charge of the prosecution.

DALLAS — Joshua Earls, 30, of Garland, Texas, was sentenced today by U.S. District Judge Barbara M. G. Lynn to 144 months (12 years) in federal prison and a lifetime of supervised release, following his guilty plea in October 2013 to one count of receipt of child pornography.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the factual resume filed in the case, Earls admitted that while he was a youth pastor, he established a relationship with female minor at his church, “Jane Doe,” who at the time was 16-years-old.

In April 2013, Jane Doe disclosed the nature of her relationship with Earls to the Garland Police Department, and on April 9, 2013, law enforcement executed a search of Earl’s residence and seized several computers.  An examination of those computers resulted in the identification of well over 600 images of child pornography, including images of Jane Doe. 

Earls admitted that he exchanged nude pictures and videos with Jane Doe and possessed videos of her engaging in sexually explicit conduct, at his request.  A forensic examination of Earls’ cell phone revealed text messaging between he and Jane Doe, in which he solicits, encourages and persuades her to produce pornographic images of herself and send them to him.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”      

The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Garland Police Department.  Assistant U.S. Attorney Lisa J. Miller prosecuted.

Unlawfully Accessed and Provided Law Enforcement Sensitive Information to a Known Drug Dealer

DALLAS — Thomas S. Kantzos, 45, of Fort Worth, Texas, a former officer with the Arlington Police Department (APD), was sentenced this afternoon, by U.S. District Judge Barbara M. G. Lynn, to 12 months and one day in federal prison, following his guilty plea in October 2013 to an Indictment charging exceeding access to a protected computer.  He was ordered to surrender to the Bureau of Prisons on April 1, 2014.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

As an officer with the APD, Kantzos was authorized to access law enforcement information obtained through the Texas Crime Information Center (TCIC), the National Crime Information Center (NCIC) and the Texas Law Enforcement Telecommunication System (TLETS), and he received specialized training on the authorized uses of the information, as well as the potential penalties for the misuse of such information.  Personal use of such information, including releasing information to members of the general public, is not authorized and violates APD policy. 

Prior to December 2011, Kantzos knew that “Person A” was an individual who trafficked in anabolic steroids.  In fact, Kantzos had purchased anabolic steroids from Person A for both his own use and for the use of other APD officers.  In November or December 2011, Person A suspected that he was under police surveillance.

On December 29, 2011, Person A saw a motor vehicle parked near his house and asked Kantzos to “run” the license plate because he was concerned that law enforcement was watching him and he didn’t want to get arrested for trafficking anabolic steroids.  Kantzos, without a legitimate law enforcement purpose, used the computer in his patrol car, while he was on duty, to access the Texas Department of Public Safety’s (DPS) protected computer through TLETS, under the guise of conducting a stolen vehicle investigative inquiry.  His computer inquiry automatically searched for information about that motor vehicle contained in law enforcement computers located in Texas and in other states, such as the NCIC computer.

Kantzos admitted he knew the use of this computer for this purpose exceeded authorized use.  After Kantzos obtained the information about the vehicle, he relayed the information to Person A to help Person A avoid arrest, apprehension or disruption while Person A unlawfully trafficked in anabolic steroids.  Person A recognized the name of the registered vehicle owner as a law enforcement officer.  Thereafter, Person A decided to “lay low” to avoid arrest by law enforcement.

The case was investigated by the FBI and the Texas Ranger Division of the Texas DPS.  Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay and Assistant U.S. Attorney Mark Penley prosecuted.

DALLAS — Raul Mirabal, 42, of Grapevine, Texas, was sentenced this morning by U.S. District Judge David C. Godbey to 72 months in federal prison following his guilty plea in June 2013 to one count of possession of a firearm by a prohibited person, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the factual resume filed in the case, Grapevine Police Department responded to a potential domestic disturbance on January 5, 2013.  Responding officers discovered that Mirabal possessed a Desert Eagle .50 caliber handgun in his backpack.  At the time, Mirabal was subject to a protective order issued in May 2012 by a Tarrant County court.  Among other things, the protective order restrained Mirabal from harassing, stalking or threatening particular individuals or engaging in other conduct that would place particular individuals in reasonable fear of bodily injury; and explicitly prohibited the use, attempted use, or threatened use of physical force against particular individuals.  Federal law prohibited Mirabal from possessing firearms because he was under the protective order.

The case was investigated by the Grapevine Police Department and Hurst Police Department.  Assistant U.S. Attorneys Brian McKay and Jason Schall prosecuted.

Defendant Shot and Killed Man During Drug Transaction

DALLAS — Jose Inez Zapata, 33, of Dallas, was sentenced this morning, by U.S. District Judge David C. Godbey, to 240 months in federal prison, following his guilty plea in August 2013 to two federal felony firearm charges, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, Zapata pleaded guilty to one count of using and discharging a firearm during a drug trafficking crime and one count of being a felon in possession of a firearm.

On April 4, 2011, Zapata met “R.J.” at an apartment complex parking lot in Dallas to conduct a 30-pound marijuana transaction.  Zapata shot and killed “R.J.” and then fled the location.

Then, on January 11, 2012, an officer with the Mesquite Police Department executed a traffic stop on a Ford truck that had been reported stolen a few days earlier from Baylor Hospital.  Zapata, the driver of the truck, initially slowed down, but then led police on a high-speed chase, at speeds of up to 100 miles per hour, which lasted several minutes.  Zapata eventually stopped the truck and fled on foot, running across Highway 80.  Zapata charged the officer and attempted to take weapons from the officer’s gunbelt, but he was eventually handcuffed and arrested.  Two firearms were located in the truck along with several other stolen items and counterfeit U.S. currency.  Zapata was a convicted felon, having felony convictions in Dallas County for aggravated robbery and aggravated assault on a public servant.

The case was investigated by the Dallas Police Department, the Mesquite Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Secret Service.  Assistant U.S. Attorney Cara Foos Pierce prosecuted.

One Defendant Allegedly Used Her Position at Fannie Mae to Steal Personal Identifying
Information of Approximately 1,100 Fannie Mae Customers

DALLAS, Texas — A total of seven metroplex residents have been charged in a 13-count superseding indictment, just unsealed, with various offenses related to an identity theft scheme they ran from October 2009 to July 2013, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

In addition to each being charged with one count of conspiracy to commit bank fraud, the defendants are also each charged with the following:

Anthony Minor, 25, of Cedar Hill, is also charged with six counts of bank fraud; one count of conspiracy to commit fraud and related activity in connection with identification documents; one count of using or trafficking in unauthorized access device; and two counts of aggravated identification theft.

Tilisha Morrison, 24, of Dallas, is also charged with three counts of bank fraud; one count of conspiracy to commit fraud and related activity in connection with identification documents; and one count of producing, using, trafficking in a counterfeit access device.

Katrina Thomas, 40, of Garland, who worked as an Underwriting Support Specialist for the Federal National Mortgage Association (Fannie Mae), is also charged with one count of conspiracy to commit fraud and related activity in connection with identification documents and one count of producing, using and trafficking in a counterfeit access device.

Kario Butler, 28, of Mansfield; Karen Mendoza, 43, of Dallas and Wichita Falls; Cyrus Pritchett, 24, of Dallas; and Jamilah Karriem, 20, of Dallas and Desoto, are also each charged with one count of bank fraud.

Minor and Morrison were originally charged in an indictment returned by a federal grand jury in October 2013.  Minor remains in federal custody.

According to the indictment, the defendants stole personal identifying information for true Bank of America and JP Morgan Chase account holders (the victim-customers) and used this information to fraudulently access funds contained in their bank accounts.  They also created false identities using the stolen personal identifying information.

Thomas, through her employment at Fannie Mae and her access to customer files, stole the personal identifying information of approximately 1,100 Fannie Mae customers and sold or provided the information to Minor or Morrison, knowing it was illegal and knowing that the information would be used to commit bank fraud.

Minor and Morrison recruited co-conspirators (“runners”), including Butler, Mendoza, Pritchett and Karriem, who would either use their own existing bank account, or would allow their identities to be used, to create new bank accounts to further the scheme.  They would either directly access the victim-customer’s account or open a joint account in the names of the runner and the victim-customer, without the victim-customer’s knowledge or consent.  Minor and Morrison would also use the banks’ telephone and online banking systems to transfer funds from the compromised victim-customer’s account into an account controlled by one of the co-conspirators.  They would then direct the runner to withdraw the money and Minor often drove the runner to the bank or automated teller machine to perform the transaction.

According to the indictment, the defendants used the funds or stolen information to rent hotel rooms and purchase luxury goods.  In fact, in July 2013, when Minor was arrested in his room at a luxury hotel in Dallas, which he had rented using another’s identification, he was in possession of several false identities and counterfeit checks as well as a computer containing a template for Texas Department of Public Safety Temporary Driver’s License and counterfeit checks.

In late June 2013, unidentified co-conspirators burglarized a furniture store in Farmers Branch, Texas, and stole a safe containing a passport, social security card and birth certificate of a particular individual.  On July 1, 2013, Morrison used that identification to rent an apartment in Mesquite.

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty.  However, upon conviction, the conspiracy to commit bank fraud count, as well as each of the bank fraud counts, carry a maximum statutory penalty of 30 years in prison and a $1 million.  The conspiracy to commit fraud and related activity in connection with identification documents count carries a maximum statutory penalty of 15 years in prison and a $250,000 fine.  The producing, using or trafficking in a counterfeit access device counts each carry a maximum statutory penalty of 10 years in prison and a $250,000 fine.  The maximum statutory penalty for the identity theft count is a mandatory term of two years in prison, to be served consecutively to any other term or imprisonment, and a $250,000 fine.

The case is being investigated by the U.S. Secret Service and the Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorney P. J. Meitl and Special Assistant U.S. Attorney Christopher G. Poor are prosecuting.

(Download Factual Basis)

FORT WORTH, Texas — Dwight L. Looney, 62, was sentenced today by U.S. District Judge John McBryde to 262 months in federal prison following his guilty plea in October 2013 to one count of production of child pornography.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the factual resume filed in the case, in May 2010, Looney knowingly used, persuaded and enticed “Jane Doe” to engage in sexually explicit conduct, and Looney used a digital camera to take a still image of that conduct.  Jane Doe was younger than 16 years old at the time.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”      

The investigation was conducted by the Fort Worth Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).  Assistant U.S. Attorney Aisha Saleem prosecuted.

DALLAS — A Dallas resident and his wife, along with her son, who were arrested by U.S. Postal Inspectors in January 2013 in Amityville, New York, on charges outlined in a federal indictment returned in the Northern District of Texas, have been convicted and sentenced for their respective roles in a mail fraud conspiracy, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Roxana Flores, 43, also of Dallas, was sentenced today, by Chief U.S. District Judge Sidney A. Fitzwater, to 24 months in federal prison.  Her husband, Jorge Armando Flores, 45, was sentenced in October 2013 to 46 months in federal prison.  Her son, Julio C. Funes-Alas, 27, also of Dallas, was sentenced in December 2013 to 24 months in federal prison.  Jorge and Roxana Flores were ordered to pay $2,056,162 in restitution, jointly and severally.  Julio Fuenes-Alas was ordered to pay $511,865 in restitution.

Jorge and Roxana Flores were employed as sales agents in the Latin Department by U.S.A. Gateway, Inc., an international wholesale travel agent, located on Spring Valley Road in Dallas.  Gateway was registered with the Airline Reporting Corporation which enabled it to purchase airline tickets directly from the airlines.  Gateway then sold these tickets to retail travel agencies, known as “subagents,” who would in turn sell the tickets to their customers.  Among the subagents that purchased airline tickets from Gateway were Ramon Travel & Services, Inc., located in Providence, Rhode Island; Your Travel Agent Con Sabor Latino, located in Carrollton, Texas; and Jeanette Travel, located in Lowell, Massachusetts.

According to documents filed in the case, from at least March 2007 until approximately August 2011, the defendants conspired with each other, and others, to commit mail fraud.  Defendants obtained subagents’ checks that had been mailed to Gateway and diverted them to bank accounts they had established for their joint use and financial benefit.  These accounts were opened in names similar to Gateway and the defendants would write checks and make ATM withdrawals on these accounts for their personal benefit and use.

The case was investigated by the U.S. Postal Inspection Service.  Assistant U.S. Attorney Christopher Stokes prosecuted.

DALLAS — A Dallas resident and his wife, along with her son, who were arrested by U.S. Postal Inspectors in January 2013 in Amityville, New York, on charges outlined in a federal indictment returned in the Northern District of Texas, have been convicted and sentenced for their respective roles in a mail fraud conspiracy, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Roxana Flores, 43, also of Dallas, was sentenced today, by Chief U.S. District Judge Sidney A. Fitzwater, to 24 months in federal prison.  Her husband, Jorge Armando Flores, 45, was sentenced in October 2013 to 46 months in federal prison.  Her son, Julio C. Funes-Alas, 27, also of Dallas, was sentenced in December 2013 to 24 months in federal prison.  Jorge and Roxana Flores were ordered to pay $2,056,162 in restitution, jointly and severally.  Julio Fuenes-Alas was ordered to pay $511,865 in restitution.

Jorge and Roxana Flores were employed as sales agents in the Latin Department by U.S.A. Gateway, Inc., an international wholesale travel agent, located on Spring Valley Road in Dallas.  Gateway was registered with the Airline Reporting Corporation which enabled it to purchase airline tickets directly from the airlines.  Gateway then sold these tickets to retail travel agencies, known as “subagents,” who would in turn sell the tickets to their customers.  Among the subagents that purchased airline tickets from Gateway were Ramon Travel & Services, Inc., located in Providence, Rhode Island; Your Travel Agent Con Sabor Latino, located in Carrollton, Texas; and Jeanette Travel, located in Lowell, Massachusetts.

According to documents filed in the case, from at least March 2007 until approximately August 2011, the defendants conspired with each other, and others, to commit mail fraud.  Defendants obtained subagents’ checks that had been mailed to Gateway and diverted them to bank accounts they had established for their joint use and financial benefit.  These accounts were opened in names similar to Gateway and the defendants would write checks and make ATM withdrawals on these accounts for their personal benefit and use.

The case was investigated by the U.S. Postal Inspection Service.  Assistant U.S. Attorney Christopher Stokes prosecuted.

Defendant Worked as a Pediatric Dental Provider at Kool Smiles and Personally Benefitted From Scheme

ABILENE, Texas — Dr. Tuan Truong, aka “Terry Truong,” of Abilene, a dentist who practiced pediatric dentistry at Kool Smiles in Abilene, was sentenced this afternoon, by U.S. District Judge Jorge A. Solis, to 18 months in federal prison.  Truong pleaded guilty in August 2013 to an Information charging one count of making a false statement in connection with a health care matter.  Truong was also ordered to pay $57,969 in restitution to Kool Smiles.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, in summer 2008, Truong began working for Kool Smiles, which paid him a base salary and offered opportunities for bonuses based on additional procedures he performed in excess of daily targets set by Kool Smiles management.  Dentists were required to use professional judgment in the treatment and management of patient care.

Beginning on June 30, 2008, and continuing to July 10, 2009, Truong made false entries on Kool Smiles patient records, purporting to have performed dental services for Medicaid beneficiaries that he well knew he had not performed.  As a result of the false and fraudulent statements and entries Truong made, Kool Smiles billed Medicaid for procedures that were not performed.  In fact, during this time period, Truong made false entries in the Kool Smiles electronic database that caused Kool Smiles to bill and receive payment from Medicaid (and Medicaid affiliates) of more than $120,000, but less than $200,000 for services he claimed to have performed, but did not. 

In addition, according to the factual resume filed, Truong personally benefitted from this scheme by receiving bonuses of $32,749 to which he would not have been otherwise entitled.  The court also ordered Truong to reimburse Kool Smiles for the legal fees incurred during the investigation.

Kool Smiles has cooperated throughout the investigation, which was conducted by the Medicaid Fraud Control Unit of the Office of the Attorney General for the State of Texas and the FBI.  Assistant U.S. Attorney Amy Burch, of the U.S. Attorney’s Office in Lubbock, Texas, was in charge of the prosecution.

DALLAS — A federal jury returned guilty verdicts late this afternoon against five individuals convicted for their roles in a pill mill conspiracy that operated in Dallas since 2010.  The trial began Monday, January 27, 2014, in Dallas federal court before U.S. District Judge Barbara M. G. Lynn.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, the jury convicted each of the below-listed defendants on one count of conspiracy to unlawfully distribute controlled substances:

Lisa L. Hollier, 44, of Sunnyvale, Texas

Jose L. Martinez, 54, of Flower Mound, Texas

Joesephis Austin, 60, of Dallas

Patricia A. Bryant, 59, of Dallas

Walter R. Hudspeth, 62, of Dallas

According to evidence in the case, Austin, Bryant and Hudspeth operated as “dealers” who would recruit “patients,” often from homeless shelters, and drive them in groups to Padron Wellness Clinic (PWC), located at 1000 Emerald Isle Drive in Dallas.  Co-conspirators physician Nicolas Padron, 54, of Garland, Texas, and Martinez opened PWC in the fall of 2010.  PWC operated not as a legitimate medical facility, but as a place to unlawfully obtain controlled substances, such as hydrocodone.

Dr. Padron and Martinez, the PWC’s business manager, charged cash only for office visits in which Dr. Padron would do little to no physical examination and prescribe a “cocktail” of controlled substances, including hydrocodone, a Schedule II controlled substance and alprazolam, a Schedule IV controlled substance.  Generally, they charged $250 for a new patient office visit and $185 for an established patient visit.

Typically, the dealers set appointments on PWC’s schedule and brought in multiple patients at a time.  The dealers escorted the patients into the clinic, coordinated with Martinez and paid cash for the patients they brought.  Dr. Padron would sometimes see two or more patients at a time in one exam room.  Patient visits were short in duration and patients normally left with a 30-day prescription of 120 pills of hydrocodone and 30-90 units of alprazolam.  Most of the patients were diagnosed by Dr. Padron with lower back pain and anxiety, without regard of their true condition; thus these prescriptions were medically unnecessary and outside the scope of professional practice. 

Dr. Padron, who is awaiting sentencing, testified at trial.  He pleaded guilty in September 2013 to his role in this conspiracy.  He faces a maximum statutory penalty of 10 years in federal prison and a $500,000 fine on this conviction.

Hollier, a licensed pharmacist, owned and operated Urban Independent Pharmacy (UIP), located at 6300 Samuell Blvd., in Dallas.  She and Dr. Padron coordinated a procedure for PWC’s staff to fax prescriptions for the controlled substances to UIP. 

Once Dr. Padron issued the prescriptions, these dealers would drive the patients to UIP to get the prescription filled.  Typically they did this in groups and Hollier had large amounts of hydrocodone and alprazolam in pre-filled bottles ready each day to handle the large groups of dealers and their patients.  These dealers furnished the money to pay for the narcotics.  Sometimes they paid Hollier directly for the prescriptions.  After Hollier filled the prescriptions, the patients would give the dealers the pills which they would sell on the street for a profit.

Dr. Padron has also pleaded guilty, in a separate and unrelated case, to one count of conspiracy to commit health care fraud.  A sentencing date is pending in that case also.

The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit.  Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are prosecuting.  

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the HEAT Strike Force, see: www.stopmedicarefraud.gov

Defendant Arrested at JFK International Airport Just Prior to
Boarding Flight to Ghana

DALLAS — Two recent, Dallas-area residents, Annetta Lou Smith, aka “Annette Crawford,” 49, and Warren Michael Hills, 54, have each pleaded guilty to conspiracy to commit wire fraud stemming from a gold purchase investment fraud scheme they ran in November and December 2010.  Hills pleaded guilty yesterday, before U.S. District Judge Reed C. O’Connor, to count one of the indictment and was remanded into federal custody.  Smith entered her plea earlier this month to a superseding information.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

According to documents filed in the case, on August 27, 2013, Smith was informed that an indictment charging her and Hills with fraud would be presented to a federal grand jury in Dallas the following week.  On Sunday evening, September 1, 2013, Smith was arrested on a criminal complaint, by FBI agents at JFK International Airport where she was awaiting a flight, she had booked to Ghana, scheduled to depart later that evening.  She has been in custody since that time.

According to plea papers filed in the case, Smith and Hills worked together to recruit investors to purchase gold from the country of Ghana, located in West Africa.  Smith and Hills represented to two particular investors that if these investors wired their funds to a specific bank account in Ghana, then they would cause the promised (and paid for) gold to be shipped to the investors.  These two particular investors suffered substantial financial losses as a direct result of the failure of Smith and Hills to cause all of the promised gold to be delivered to them.

Although both Smith and Hills knew that the investors had fully paid for all of their promised gold, they also knew that all of the promised gold was ultimately not shipped and was never going to be shipped to them.  Rather than be truthful to the investors, Smith and Hills made false representations to them promising the remaining gold would be shipped. 

According to the indictment, Smith and Hills caused substantial monetary losses to investors, including approximate total net losses of $113,483 to investor P.G. and approximately total net losses of $325,000 to investor M.W.

Hills faces a maximum statutory penalty of 20 years in federal prison, and Smith faces a maximum statutory penalty of five years in federal prison.  Each could also be fined up to $250,000 and ordered to pay restitution.  Judge O’Connor will sentence Hills on May 15, 2014, and Smith on April 24, 2014.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

The case is being investigated by the FBI.  Assistant U.S. Attorney David Jarvis is in charge of the prosecution.