Southern District of Texas

HOUSTON ‐ A Lake Jackson area attorney has entered a guilty plea to bank fraud for his role in a mortgage fraud scheme, announced U.S. Attorney Ryan K. Patrick.

Kirk Lawrence Brannan, 64, admitted to conspiring with others from 2005 to 2009 to execute a scheme to defraud Wells Fargo Bank and other lenders.

Brannan sold 10 beach homes in the Freeport/Surfside area to “straw buyers” at exorbitant prices. Other co-conspirators recruited straw buyers who created loan applications with misrepresentations that lenders relied upon in deciding to make the mortgage loans. The applications contained misrepresentations of the buyer’s address, employer, income and expenses. The applications also suggested the buyers were much better credit risks than they actually were. Brannan admitted he paid kickbacks to co-conspirators each time one of the beach homes was sold to a straw buyer.

The beach properties were sold at two to three times the appraised values. The mortgage lenders, including Wells Fargo Bank, were induced to lend the inflated amounts for the purchases through flawed or fraudulent appraisals which were based on comparisons Brannan manufactured to further the scheme. 

Brannan created settlement statements that suggested he sold three of his properties to his children at exorbitant prices. Appraisers relied upon these “sales” as comparable sales in appraising Brannan’s remaining properties sold to straw buyers. As a result of the fraudulent appraisals, he and his co-conspirators were able to inflate the values for his properties and deceive the lenders into approving home loans at those exorbitant amounts. 

All of the straw buyers defaulted on the mortgages, and all 10 of the beach properties ended up in foreclosure. 

The fraudulent mortgage loan scheme resulted in a loss of $5,317,350 to Wells Fargo Bank and the other lenders. Brannan paid $2,401,368 to his co-conspirators as part of the scheme.

U.S. District Judge Lee Rosenthal accepted the plea and set sentencing for Aug. 29, 2018, at which time Brannan faces up to 30 years in federal prison and a possible $1 million maximum fine. He was permitted to remain on bond pending that hearing.

Co-conspirators Chucoboie Lanier, 41, David Lee Morris, 55, and Derwin Jerome Blackshear, 50, all of Houston, previously pleaded guilty for their roles in the scheme. They are set for sentencing Sept. 26, 2018.

The Texas Department of Public Safety and the FBI conducted the investigation. Assistant U.S. Attorneys Robert Johnson and Michael Day are prosecuting the case.

CORPUS CHRISTI, Texas – The final member of a 10-defendant heroin and money laundering conspiracy has pleaded guilty, announced U.S. Attorney Ryan K. Patrick. Jesus Gutierrez, 46, of Corpus Christi, pleaded guilty today to conspiracy to possess with intent to distribute more than one kilogram of heroin and conspiracy to launder money.

The court learned today that the defendants had been part of a significant, long-term heroin distribution ring operating in Robstown. Evidence also showed that on Oct. 4, 2017, authorities seized approximately a kilogram of heroin and almost $100,000 during the arrests related to this investigation.

The evidence presented during today’s plea demonstrated that Gutierrez and his nephew, Enrique Gutierrez Jr., regularly obtained kilogram quantities of heroin during the conspiracy which was then distributed via the other defendants. The overall scope of the conspiracy was estimated to be between 10-30 kilograms of heroin. The conspiracy operated between April 2016 and October 2017, according to the evidence presented to the court.

Previously, Gutierrez Jr., 31, of Sandia, Louie Molina, 36, of Robstown, Arturo Garcia, 55, of Mathis, Michael Flores, 36, of Robstown, and Jesus Leal Jr., 34, of Robstown, pleaded guilty to conspiracy to possess with intent to distribute more than one kilogram of heroin. Gutierrez Jr. also pleaded guilty to conspiracy to launder drug money as did Renee Gutierrez, 37, of Corpus Christi. Tim Molina, 34, of Robstown, Sakhone Chanhrattana, 35, of Jarrell, and Javier Ramirez, 52, of Alice, entered their pleas to possession with intent to distribute heroin. 

Sentencing for Gutierrez has been set before Judge Nelva Gonzales Ramos for Aug. 8, 2018. At that time, he faces a minimum of 10 years and up to life in prison for the conspiracy and a maximum of 20 years for the money laundering.  

The Drug Enforcement Administration and the Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorney Jon Muschenheim is prosecuting the case.

LAREDO, Texas – A 25-year-old man from Nuevo Laredo, Mexico, has been ordered to prison following his conviction of conspiracy to transport aliens which resulted in death, announced U.S. Attorney Ryan K. Patrick. Omar Gonzalez-Herrera pleaded guilty on Dec. 4, 2017.

Today, U.S. District Judge Diana Saldana ordered Gonzalez-Herrera to serve a 121-month term of imprisonment. Not a U.S. citizen, he is expected to face deportation proceedings following his sentence.

On Aug. 2, 2017, law enforcement found footprints near the Rio Grande River in Laredo which led them to a group of 14 people suspected of illegally being in the country. After following the prints, they encountered a group of fourteen persons. They also found a Glock handgun nearby on the ground. Upon further investigation, authorities learned the aliens had just crossed into the country via the Rio Grande River. They identified Gonzalez-Herrera as the foot guide.

Gonzalez-Herrera later admitted he was in fact the foot guide and that the Glock handgun was his. He was carrying it within his waist-band when he led the other aliens into the United States. He stated he was to be paid $1,500.

While crossing the river, three people died. All had been swept away by the current of the river and drowned. One of the victims was a child.

Gonzalez-Herrera has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation along with Border Patrol. Assistant U.S. Attorney Christopher dos Santos prosecuted the case.

HOUSTON – A total of nine people have been charged with wire fraud and money laundering in connection with a scheme to embezzle $3.4 from the Beck Group in Houston, announced U.S. Attorney Ryan K. Patrick.

A 24-count indictment was unsealed today against seven defendants charged for their roles in the scheme - Hannah Musleh, 49, and Akram Elias Musleh, 54, both of Houston; Collette Devoe Hines, 49, and Lanamasha Hampton, 42, both of Atlanta, Georgia; Janell Crosby Quant, 38, of Union City, Georgia; Heather Ashley Sowa, 31, of Denver, Colorado; and William Lewis Sutton Jr., 48, of Los Angeles, California. A criminal information charging Moses Said, 42, of Houston, was filed yesterday, while a criminal complaint was previously filed against Charles Lee Williams, 42, of Los Angeles.

As a construction manager with the Beck Group, Said was in charge of the Le Meridien Hotel Project in downtown Houston from 2016 to 2017, according to court records. Hampton, Quant, Hines, Sowa, Hannah Musleh, Akram Musleh, Sutton and Williams allegedly created shell companies in the scheme which submitted false invoices to the Beck Group for payment for construction products that were not provided and construction services that were not performed.

Said allegedly approved and submitted the false invoices for payment, causing the Beck Group to issue payments to the shell companies. Upon receipt of the monies, the other seven defendants allegedly paid some of the fraud proceeds to Said. They allegedly attempted to conceal and disguise the nature and origin of the proceeds by transferring them to other companies and individuals.

If convicted, all face up to 20 years in prison and a possible $6.8 million maximum fine.

The FBI conducted the investigation. Assistant U.S. Attorney Vernon Lewis is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is considered innocent until proven guilty in a court of law.

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CORPUS CHRISTI, Texas - A 51-year-old Corpus Christi physician has admitted he furnished false information in a record of dispensed controlled substances, announced U.S. Attorney Ryan K. Patrick.

Dr. Michael Jerome Pendleton pleaded guilty today. At the hearing, the court also heard that in February 2017, the Texas Medical Board found Pendleton was operating an unregistered pain clinic and that he had surrendered his Drug Enforcement Administration (DEA) registration license.

According to Title 21 of the Code of Federal Regulations, a registered individual practitioner is required to keep records of controlled substances listed in Schedules II, II, IV and V if the practitioner regularly engages in the dispensing or administrating of controlled substances.

Starting in September 2013, law enforcement initiated an investigation into Pendleton’s practice based on his prescription writing practices that included a high number of proscriptions for controlled substances. Law enforcement conducted eight undercover visits to Pendleton’s office. During seven of those occasions, Pendleton prescribed hydrocodone - a Schedule II drug under the Controlled Substance Act.

In November 2016, agents executed a search warrant on Pendleton’s office and seized several documents. The investigation revealed Pendleton had omitted from his records information he was required to provide including the hydrocodone he had distributed to the undercover agents.

Sentencing has been set before Senior U.S. District Judge John D. Rainey on July17, 2018. At that time, Pendleton faces up to four years in federal prison and a possible $250,000 maximum fine.

The DEA, IRS-Criminal Investigation, Texas Department of Public Safety, Corpus Christi Police Department and the Texas Medical Board conducted the investigation as part of a joint task force. Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case.

McALLEN, Texas – With the sentencing of the leaders today, seven members of a smuggling group that harbored and/or transported more than  200 undocumented aliens from the Rio Grande Valley to Houston have all been ordered to federal prison, announced U.S. Attorney Ryan K. Patrick.

Jose Luis Soto-Lopez, 52, and his daughter, Erica Janine Soto, 27, both who resided in Brownsville, were sentenced to 54 and 21 months in federal prison for their roles in an the alien smuggling that Soto-Lopez led. Soto will also serve two years of supervised release, while Soto-Lopez, not a U.S. citizen, is expected to face deportation proceedings following his prison term.

The conspiracy ran from at least Feb. 10, 2014, through Sept. 1, 2016.

Soto-Lopez and Soto recruited individuals to either harbor undocumented aliens in stash houses throughout Hidalgo County or serve as guides for undocumented aliens transported from stash houses to a residence in Houston.

Soto-Lopez and Soto coordinated or were involved in the unsuccessful transport of 48 undocumented aliens, including a 13-year-old child and other minor children, on at least seven different occasions between Feb. 10, 2014, and May 10, 2016 in Brooks, Jim Hogg, Webb and Starr Counties. On four of the seven occasions, load vehicles involved in the smuggling of the undocumented aliens either crashed or resulted in a vehicle bail-out to avoid law enforcement.  

The investigation further revealed alien stash houses that Soto-Lopez and Soto ran in Hidalgo County were discovered on at least three occasions from Aug. 9, 2016, through Sept. 1, 2016, resulting in the apprehension of 45 undocumented aliens.

At the time of Soto-Lopez and Soto’s arrest, authorities conducted a search of their residence in Brownsville where they found multiple vehicles and vehicle titles matching vehicles the organization used. The vehicle titles were registered to names and/or addresses not belonging to Soto-Lopez or Soto.

The investigation also revealed  Soto had previously been encountered on Jan.  10, 2016, with a ledger consistent with documenting the transport of approximately 113 additional aliens from Oct. 27, 2015, through Jan. 7, 2016. The ledger in Soto’s possession also contained information on rental properties, travel directions and international Western Union or Moneygram transactions consistent with alien smuggling. Based on information contained within the ledger, the organization appeared to be charging $800-$2600 to transport and/or harbor each undocumented alien.

Five other individuals involved in the smuggling organization were all from Mexico and have also been sentenced to varying terms up to 23 months imprisonment. They are also expected to face deportation proceedings.

Border Patrol and Immigration and Custom's Enforcement's Homeland Security Investigations conducted the investigation with the assistance of the Duval County Sheriff’s Office. Assistant U.S. Attorney Roberto Lopez Jr. prosecuted the case.

HOUSTON – A 34-year-old Nigerian man who illegally resided in Houston has been ordered to prison for his involvement in numerous Business Email Compromise (BEC) schemes. Samson Olugbenga Oyekunle pleaded guilty to conspiracy to commit wire fraud Oct, 6, 2017.

Today, U.S. District Judge Melinda Harmon ordered Oyekunle to serve 63 months in federal prison. He initially came to the United States on a student visa, but not a U.S. citizen, he is expected to face deportation proceedings following his sentence. At the hearing today, a victim spoke before the court as to how this case has devastatingly affected him and his law practice. Judge Harmon further ordered Oyekunle to pay restitution to the victims he defrauded. 

BEC fraud is a sophisticated fraud targeting businesses that regularly perform wire transfer payments. The fraud is carried out by compromising legitimate business e-mail accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds. The front end fraud of these BEC schemes originates from international locations. The fraudsters will use the method most commonly associated with their victim's normal business practices and make victims believe the emails are coming from a legitimate source.   Others, such as Oyekunle, working within the conspiracy open bank accounts with counterfeit passports that are being funded with fraudulent BEC wire transfers. These domestic bank accounts are a crucial component of the fraud scheme being a success. 

From on or about Jan. 1, 2016, through February 2, 2017, Samson Oyekunle was involved in numerous BEC schemes. Co-conspirators, working outside the United States, caused funds obtained through a variety of BEC schemes to be wire transferred into the various bank accounts Oyekunle fraudulently opened.     

Oyekunle would open bank these bank accounts in or around the Houston area with counterfeit passports in order to facilitate fraud payments into these accounts. Oyekunle opened numerous bank accounts at several financial institutions including Chase Bank, Bank of America, Capital One Bank, First National Bank of Texas, and Wells Fargo Bank. 

A total of 30 fraudulent wire transfers totaling $823,765 were taken from victims across the United States under false pretenses and were deposited into these accounts.

Oyekunle has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The U.S. Postal Inspection Service conducted the investigation along with Department of State – Diplomatic Security Service. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.

BROWNSVILLE, Texas - Tomas Yarrington Ruvalcaba, the former governor of the State of Tamaulipas, Mexico, and a former PRI Party candidate for Mexican President, has been extradited to the United States. Ruvalcaba is charged in a Brownsville indictment which includes allegations of racketeering, drug smuggling, money laundering and bank fraud.

U.S. Attorneys Ryan K. Patrick and John F. Bash, of the Southern and Western Districts of Texas, respectively, made the announcement along with Special Agent in Charge Shane Folden of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Special Agent in Charge Will R. Glaspy of Drug Enforcement Administration (DEA), Acting Special Agent in Charge Andy Tsui of IRS - Criminal Investigation (CI) and Special Agent in Charge Christopher Combs of the FBI.

In April 2017, Yarrington was captured in Italy while traveling under an assumed name and false passport and other identification documents. He was taken into custody on a provisional arrest warrant based on the indictment returned in May 2013. Although Yarrington contested his extradition, Italian authorities recently authorized his extradition to the United States. 

He has now arrived in the Southern District of Texas to face the charges and is expected to make his initial appearance Monday, April 23 at 1:30 p.m. before U.S. Magistrate Ronald Morgan in Brownsville.

He was charged in the Brownsville Division of the Southern District of Texas following an investigation that spanned several years. The indictment alleges Yarrington, 61, and Fernando Alejandro Cano Martinez, 61, the owner of a Mexican construction firm, conspired to violate the provisions of the Racketeer Influenced and Corrupt Organization (RICO) statute. The two men are also charged with conspiracy to launder money, conspiracy to defraud and conspiracy to make false statements to federally insured U.S. banks.

Yarrington is also separately charged with a conspiracy to violate the provisions of the Controlled Substances Act, two substantive bank fraud counts and a conspiracy to structure currency transactions at a domestic financial institution. Cano is separately charged with three counts of bank fraud.

“HSI aggressively pursues transnational criminal organizations that pose a threat to the U.S. national security, to include corrupt public officials who use their position and influence to further the illicit activity,” said Folden. “HSI is committed to upholding the rule of law and investigating those involved in criminal activity and bringing the illicit gains of these crimes to the U.S.”

“This case highlights the impact multiple agencies can have when they join forces. DEA, HSI, IRS-CI and FBI along with our state, local and international law enforcement partners will continue to work together and pursue those who threaten our country through the smuggling and distribution of illegal and dangerous drugs such as cocaine,” said Glaspy. “This extradition sends a global message that those accused of leveraging their political positions to conduct drug trafficking and other criminal activity will be brought to justice.”

“This investigation took law enforcement above and beyond its traditional role in financial crimes,” said Tsui. “The apprehension of Tomas Yarrington Ruvalcaba underscores IRS-CI’s commitment to assist our law enforcement partners, both foreign and domestic, and follow the money trail across the globe to unravel this and other complex financial investigations.”

Yarrington served as governor of Tamaulipas from 1999 to 2004. Tamaulipas lies along the southern border between the United States and Mexico directly across from Brownsville and Laredo.

According to the indictment, beginning in approximately 1998, Yarrington received large bribes from major drug traffickers operating in the Mexican state of Tamaulipas, including the Gulf Cartel. In return, Yarrington allegedly allowed them to operate their large scale, multi-ton enterprises freely, which included the smuggling of large quantities of drugs to the United States for distribution. From 2007 to 2009, Yarrington allegedly became involved in the smuggling of large amounts of cocaine through the Port of Veracruz into the United States.

Yarrington also collected bribes from commercial operations in Mexico, according to the indictment. Cano operated Materiales y Construcciones Villa de Aguayo, S.A. de C.V., a construction firm in Tamaulipas that received significant public works contracts during Yarrington’s term as governor. The indictment alleges Cano, in turn, paid bribes to Yarrington to include the acquisition of real estate in front names for him.

The indictment further alleges Yarrington also received control over stolen public funds in the latter part of 2004. Portions of those funds were allegedly used to buy a Sabreliner 60 airplane in January 2005. As part of that purchase, $300,000 was transferred to a bank account in the United States. Another portion of the allegedly stolen funds, $5 million Mexican pesos, was transferred to Cano in the spring of 2005, according to the indictment.

The indictment further alleges that starting in approximately 1998, Yarrington, and later to include Cano, became involved in the acquisition of valuable assets in the United States, using front names and business entities established starting in 2005 to disguise the true ownership of the assets. The assets allegedly included bank accounts, residences, airplanes, vehicles and real estate in Bexar, Cameron, Hidalgo and Hays Counties, many of which were acquired via allegedly fraudulent loans from banks in Texas. According to the indictment, bank accounts established in front names at Texas banks were used to receive and disburse money to carry the ongoing costs of the assets, such as loan costs and condo fees.

The indictment identifies numerous specific front entities involved in the scheme, each of which allegedly applied for multi-million dollar fraudulent loans at Texas banks, which Cano allegedly personally guaranteed. The indictment details a total of more than $7 million in transfers into the U.S. accounts of the front entities.

Additional entities were created and used to apply for other loans to fund the purchase of still other assets, according to the indictment. Numerous currency transactions were allegedly conducted at First National Bank, headquartered in Edinburg, Texas, in a structured manner in amounts at or below $10,000 in order to evade the filing of Currency Transaction Reports by the bank.

Cano is not in the custody of the United States and a warrant remain outstanding for his arrest. Anyone with information about his  whereabouts is asked to contact Homeland Security Investigations at 956-542-5811. Persons calling from Mexico should call 001-800-010-5237.

The RICO and money laundering charges each carry sentences of up to 20 years in prison, while conspiracy to commit bank fraud carries as possible punishment up to 30 years. The drug conspiracy charges carry a term of imprisonment of at least 10 years. The currency structuring charges carry a possible five-year-term of imprisonment.

The indictment also includes a notice of forfeiture. Some of the assets identified in the indictment already have been seized and forfeited to the United States in civil forfeiture actions over the course of the investigation, to include approximately 46 acres in Bexar County, a condo on South Padre Island, a 2005 Pilatus airplane and residences in Hidalgo and Hays counties.

The investigation leading to the indictment has been conducted by the Organized Crime Drug Enforcement Task Force in Brownsville, San Antonio, Houston, Corpus Christi and New York and has included agents and officers with HSI, DEA, IRS-CI, FBI and the Texas Attorney General’s Office. The Criminal Division’s Office of International Affairs handled the extradition in this matter. The United States government also acknowledges with gratitude the significant assistance received from the government of Mexico in the course of this investigation. Additionally, the United States acknowledges the assistance of the U.S. Marshals Service, HSI-Rome, HSI-Mexico City, the Italian Ministry of the Interior (particularly Interpol Rome and the Central Operations Service of the Italian National Police) and the Italian Ministry of Justice in Yarrington’s extradition.

Assistant U.S. Attorneys Julie K. Hampton, Jody Young, Karen Betancourt and Jon Muschenheim are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.

HOUSTON - The former general manager of the procurement subsidiary of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA), pleaded guilty today for his role in an international money laundering scheme involving bribes paid by the owners of U.S.-based companies to Venezuelan government officials to corruptly secure energy contracts and payment priority on outstanding invoices.

U.S. Attorney Ryan K. Patrick, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Houston Field Office made the announcement.

Cesar David Rincon Godoy (Cesar Rincon), 50, a citizen of Venezuela previously residing in Spain, pleaded guilty today in federal court in Houston to one count of conspiracy to commit money laundering. U.S. District Judge Kenneth M. Hoyt of the Southern District of Texas accepted Cesar Rincon’s plea and imposed a personal money judgment in the amount of $7,033,504.71 against the defendant, who agreed to the entry of an order of forfeiture. Sentencing is scheduled for July 9, 2018. 

Cesar Rincon was arrested in Spain in October 2017 and subsequently extradited to the United States after a federal grand jury in the Southern District of Texas returned a 20-count indictment against him and Luis Carlos De Leon Perez (De Leon), 41; Nervis Gerardo Villalobos Cardenas (Villalobos), 50; Alejandro Isturiz Chiesa (Isturiz), 33; and Rafael Ernesto Reiter Munoz (Reiter), 39. According to admissions made in connection with Cesar Rincon’s plea, between January 2012 and June 2013, he conspired with De Leon, Villalobos, Isturiz, Reiter and others, all of whom were then-current officials of PDVSA and its subsidiaries or former officials of other Venezuelan government agencies or instrumentalities, to solicit PDVSA vendors for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business. Specifically, Cesar Rincon admitted he accepted bribes from Roberto Enrique Rincon Fernandez (Roberto Rincon), 57, of The Woodlands, and Abraham Jose Shiera Bastidas (Shiera), 54, of Coral Gables, Florida, in exchange for taking official acts in his capacity as general manager of PDVSA’s procurement subsidiary in order to assist Roberto Rincon’s and Shiera’s companies, including their U.S.-based companies, in receiving payment priority and receiving additional PDVSA contracts. Cesar Rincon further admitted he then conspired with Roberto Rincon and Shiera to launder and conceal the proceeds of the bribery scheme through a series of financial transactions, including wire transfers to accounts in the United States and Switzerland held in the names of individuals or entities other than Cesar Rincon. Both Roberto Rincon and Shiera previously pleaded guilty in the Southern District of Texas to charges under the Foreign Corrupt Practices Act (FCPA) for their respective roles in the bribery scheme. They currently await sentencing.

As part of his plea agreement, Cesar Rincon also admitted to soliciting and receiving bribes from other owners of energy companies based in the United States in exchange for his assistance in helping those individuals and their companies win business with PDVSA and obtain payment from PDVSA on outstanding invoices ahead of other PDVSA vendors. In total, Cesar Rincon admitted to conspiring with others to launder at least $7,033,504.71 in proceeds from the various bribery schemes in which he participated.

The charges against De Leon, Villalobos, Isturiz and Reiter remain pending. Each of the four remaining defendants is charged with one count of conspiracy to commit money laundering and with one or more counts of money laundering. De Leon and Villalobos are also each charged with one count of conspiracy to violate the FCPA. De Leon was extradited from Spain on March 9 and was ordered detained pending trial following a detention hearing held on April 10 before U.S. Magistrate Judge Frances H. Stacy of the Southern District of Texas. Villalobos and Reiter remain in Spanish custody pending extradition and Isturiz remains at large. 

Cesar Rincon becomes the latest individual to plead guilty as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA. Including Cesar Rincon, Roberto Rincon and Shiera, the Justice Department has announced the guilty pleas of a total of 11 individuals in connection with the investigation. 

ICE-HSI in Houston is conducting the ongoing investigation with assistance from ICE-HSI in Boston and Madrid as well as from IRS - Criminal Investigation. Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson are prosecuting the case along with Trial Attorneys Jeremy R. Sanders, Sarah E. Edwards and John-Alex Romano of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Kristine Rollinson of the Southern District of Texas is handling the forfeiture aspects of the case.

The Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice and the Spanish Guardia Civil have provided substantial assistance.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.

The former general manager of the procurement subsidiary of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA), pleaded guilty today for his role in an international money laundering scheme involving bribes paid by the owners of U.S.-based companies to Venezuelan government officials to corruptly secure energy contracts and payment priority on outstanding invoices.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Houston Field Office made the announcement.

Cesar David Rincon Godoy (Cesar Rincon), 50,  a citizen of Venezuela previously residing in Spain, pleaded guilty today in federal court in Houston to one count of conspiracy to commit money laundering.  U.S. District Judge Kenneth M. Hoyt of the Southern District of Texas accepted Cesar Rincon’s plea and imposed a personal money judgment in the amount of $7,033,504.71 against the defendant, who agreed to the entry of an order of forfeiture.  Sentencing is scheduled for July 9.  

Cesar Rincon was arrested in Spain in October 2017 and subsequently extradited to the United States after a federal grand jury in the Southern District of Texas returned a 20-count indictment against him and Luis Carlos De Leon Perez (De Leon), 41; Nervis Gerardo Villalobos Cardenas (Villalobos), 50; Alejandro Isturiz Chiesa (Isturiz), 33; and Rafael Ernesto Reiter Munoz (Reiter), 39.  According to admissions made in connection with Cesar Rincon’s plea, between January 2012 and June 2013, he conspired with De Leon, Villalobos, Isturiz, Reiter and others, all of whom were then-current officials of PDVSA and its subsidiaries or former officials of other Venezuelan government agencies or instrumentalities, to solicit PDVSA vendors for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business.  Specifically, Cesar Rincon admitted that he accepted bribes from Roberto Enrique Rincon Fernandez (Roberto Rincon), 57, of The Woodlands, Texas, and Abraham Jose Shiera Bastidas (Shiera), 54, of Coral Gables, Florida, in exchange for taking official acts in his capacity as general manager of PDVSA’s procurement subsidiary in order to assist Roberto Rincon’s and Shiera’s companies, including their U.S.-based companies, in receiving payment priority and receiving additional PDVSA contracts.  Cesar Rincon further admitted that he then conspired with Roberto Rincon and Shiera to launder and conceal the proceeds of the bribery scheme through a series of financial transactions, including wire transfers to accounts in the United States and Switzerland held in the names of individuals or entities other than Cesar Rincon.  Both Roberto Rincon and Shiera previously pleaded guilty in the Southern District of Texas to charges under the Foreign Corrupt Practices Act (FCPA) for their respective roles in the bribery scheme.  They currently await sentencing.

As part of his plea agreement, Cesar Rincon also admitted to soliciting and receiving bribes from other owners of energy companies based in the United States in exchange for his assistance in helping those individuals and their companies win business with PDVSA and obtain payment from PDVSA on outstanding invoices ahead of other PDVSA vendors.  In total, Cesar Rincon admitted to conspiring with others to launder at least $7,033,504.71 in proceeds from the various bribery schemes in which he participated.

The charges against De Leon, Villalobos, Isturiz and Reiter remain pending.  Each of the four remaining defendants is charged with one count of conspiracy to commit money laundering and with one or more counts of money laundering.  De Leon and Villalobos are also each charged with one count of conspiracy to violate the FCPA.  De Leon was extradited from Spain on March 9, and was ordered detained pending trial following a detention hearing held on April 10, before U.S. Magistrate Judge Frances H. Stacy of the Southern District of Texas.  Villalobos and Reiter remain in Spanish custody pending extradition and Isturiz remains at large. 

The charges contained in the indictment are merely accusations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Cesar Rincon becomes the latest individual to plead guilty as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA.  Including Cesar Rincon, Roberto Rincon, and Shiera, the Justice Department has announced the guilty pleas of a total of 11individuals in connection with the investigation. 

ICE-HSI in Houston is conducting the ongoing investigation with assistance from ICE-HSI in Boston and Madrid, as well as from IRS Criminal Investigation.  Trial Attorneys Jeremy R. Sanders, Sarah E. Edwards and John-Alex Romano of the Criminal Division’s Fraud Section and Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson of the Southern District of Texas are prosecuting the case.  Assistant U.S. Attorney Kristine Rollinson of the Southern District of Texas is handling the forfeiture aspects of the case.

The Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice and the Spanish Guardia Civil have provided substantial assistance.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

McALLEN, Texas – A 22-year-old woman from Guadalajara, Mexico, has been ordered to federal prison following her conviction of importing methamphetamine into the country, announced U.S. Attorney Ryan K. Patrick. Yezel Eunice Nevarez-Martell pleaded guilty Aug. 30, 2017.

Today, U.S. District Judge Micaela Alvarez ordered Nevarez to serve 168 months in federal prison. Not a U.S. citizen, Nevarez is expected to face deportation proceedings following the sentence. At the hearing, the court took into consideration that the methamphetamine had a 90% purity level which is commonly referred to as “ice.” In handing down the sentence, Judge Alvarez noted that there are many young people that come before the court, sadly, on a regular basis and also expressed concern with the significant amount of such a significant drug which, once distributed, effects people at all levels of life.

At the time of her guilty plea, Nevarez admitted that on April 2, 2017, she drove a vehicle from Mexico and attempted to enter the United States at the Hidalgo port of entry, knowing the vehicle contained a controlled substance. Upon inspection, Customs and Border Protection (CBP) officers discovered methamphetamine hidden in a false compartment within the rear cargo area of the vehicle. Agents seized 23 packages weighing approximately 22 kilograms of methamphetamine.

Nevarez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Immigration and Customs Enforcement’s Homeland Security Investigations and CBP conducted the investigation. Assistant U.S. Attorney Linda Requénez prosecuted the case.

McALLEN, Texas – A 42-year-old Mexican national has been sentenced to prison for illegally re-entering the country after removal or deportation, announced U.S. Attorney Ryan K. Patrick. A federal jury deliberated for only approximately 30 minutes before finding Candelario Lucio-Garza guilty on Jan. 23, 2018.

Today, U.S. District Judge Micaela Alvarez handed Lucio-Garza a 40-month sentence to be followed by three years of supervision after his release from prison. Not a U.S. citizen, Lucio-Garza is again expected to face deportation proceedings following the sentence. At the hearing, additional evidence was also provided that detailed Lucio-Garza’s three prior convictions for illegal re-entry and that he had also been convicted of attempted murder in 1993. In handing down the sentence, the court noted Lucio-Garza’s prior convictions, the fact that he attempted to re-enter the United States just two weeks after being deported and the 32-month sentence he received for his last illegal re-entry conviction in 2015.

During the trial, law enforcement testified that Lucio-Garza had been apprehended hiding on the Pharr International Bridge just 150 yards south of the Pharr Port of Entry shortly after midnight on Oct. 16, 2017. At that time, he admitted to being a Mexican national. Record checks revealed he had also been previously removed from the United States on three separate occasions and that he had no lawful status to be in the country.

The defense attempted to convince the jury that he had not actually entered the United States because he was still on the international bridge and that it was his intent to seek asylum in the United States even though he was found hiding from law enforcement agents after the bridge was closed and had not attempted to approach the processing center. 

The jury did not believe his claims and found him guilty as charged.  

Lucio-Garza has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.  

Customs and Border Protection conducted the investigation with the assistance of the Pharr Police Department. Assistant U.S. Attorneys David M. Paxton and Linda Requénez prosecuted the case.

McALLEN, Texas ‐ The former director of the La Joya Housing Authority and another man have been ordered to federal prison for a bid rigging scheme, announced U.S. Attorney Ryan K. Patrick. Juan Jose Garza, 50, of La Joya, and Mexican national Armando Jimenez, 53, pleaded guilty to wire fraud May 3, 2017.  

Today, U.S. District Judge Ricardo H. Hinojosa ordered Garza to serve 37 months in prison, while Jimenez received an 18-month-prison term. In imposing the sentence, the court ruled Garza abused his position of trust to facilitate the wire fraud scheme, commenting that “the public trusts people in public office to do the right thing.” Judge Hinojosa further noted in regard to Garza “that trust was broken.” Garza will also serve two years of supervised release. Not a U.S. citizen, Jimenez is expected to face deportation proceedings following his sentence.

From 1999 through 2016, Garza was the executive director of the La Joya Housing Authority. From July 2013 through March 2013, Garza and Jimenez engaged in bid rigging for construction contracts with the Alamo and Donna Housing Authorities. They submitted false bids to guarantee Jimenez Construction would be the low bidder and then awarded construction projects. Jimenez then falsely submitted invoices for work he claimed his construction company did, but that had been completed by subcontractors working for Garza.

Garza and Jimenez were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The Department of Housing and Urban Development - Office of Inspector General and the FBI conducted the investigation. Assistant U.S. Attorney Kristen Rees prosecuted the case. 

CORPUS CHRISTI, Texas – A 44-year-old Richardson man has been ordered to federal prison following his conviction of possession with intent to distribute methamphetamine, announced U.S. Attorney Ryan K. Patrick. Michael Cipriano pleaded guilty Dec. 18, 2017.

Today, Senior U.S. District Judge John Rainey sentenced Cipriano to 210 months imprisonment followed by five years of supervised release.

On July 26, 2017, law enforcement officers had received information that a vehicle would be travelling from Dallas to deliver methamphetamine to a location in Corpus Christi. As agents were conducting surveillance, Cipriano arrived at the location, at which time officers attempted to conduct a traffic stop of the vehicle. He then quickly fled the location, but Cipriano was quickly apprehended a short distance away without incident.

When officers searched the vehicle, they discovered a large plastic bag that contained a white crystal substance, which tested positive for methamphetamine. Laboratory analysis confirmed the substance had a purity of 97% and contained 967 grams of pure methamphetamine.

Cipriano has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.

The Drug Enforcement Administration, Texas Department of Public Safety and the Corpus Christi Police Department. Assistant U.S. Attorney Lance Watt is prosecuting the case.

CORPUS CHRISTI, Texas – The owner of American Auto Pros in Corpus Christi has been ordered to federal prison after admitting he used numerous credit card accounts belonging to others in order to obtain things of value without authorization, announced U.S. Attorney Ryan K. Patrick. Antonio Arteaga, 38, of Corpus Christi, pleaded guilty Nov. 2, 2017, to one count of credit card fraud and one count of aggravated identity theft.

Today, Senior U.S. District Judge Hilda G. Tagle handed Arteaga a 12-month sentence for the credit card fraud as well as a consecutive 24 months for the identity theft. The total sentence of three years will be immediately followed by an additional three years of supervised release.  He was further ordered to pay restitution to his victims. In handing down the sentence, Judge Tagle noted she could put herself in the victims’ shoes, citing one victim that learned of the fraud when her credit card was declined at a gas pump and the ripple effect of bounced checks and missed payments which would follow the victims of his fraud.  Judge Tagle went on to explain that Arteaga’s customers relied on his honesty in taking their credit cards as payment and the entire credit card system counts on the honesty of merchants. 

Arteaga was arrested Aug. 18, 2017, following an investigation into a series of fraudulent ATM withdrawals in Corpus Christi and surrounding areas. Many of the victims had been customers at Arteaga’s business, American Auto Pros. Authorities executed a search warrant at the business which led to the discovery of a credit card processing pad that was connected to a laptop computer in the office. This allowed Arteaga to illegally capture the account information and PIN numbers of credit and debit cards used there.

During a subsequent search of Arteaga’s home, law enforcement found a magnetic strip encoder that had been used to replace the information on the magnetic strip of gift cards with the compromised credit and debit card numbers. Agents also found numerous altered gift cards with the encoder at Arteaga’s house and additional gift cards illegally re-encoded with victim’s credit card information in Arteaga’s vehicle and wallet. 

Agents determined that between Dec. 10, 2016, and Aug. 18, 2017, Arteaga unlawfully used the credit and debit card information of dozens of American Auto Pros customers to withdraw tens of thousands of dollars from his victims’ accounts. 

Arteaga was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The Secret Service conducted the investigation with the assistance of the Corpus Christi Police Department. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuting the case.    

LAREDO, Texas – Three persons alleged to have been involved in engaging in the business of dealing in firearms without a license have made their initial appearances in federal court, announced U.S. Attorney Ryan K. Patrick along with Special Agent in Charge Fred Milanowski of the  Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Special Agent in Charge Shane Folden, of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).

Authorities arrested Alejandro Rodriguez, 26, Alejandro Hernandez, 27, and Lewis Rodriguez, 28, all of Laredo, Thursday, April 12. Today, they made their appearance in Laredo federal court. They are set for a preliminary examination hearing on April 20, at 10:00 a.m. before U.S. Magistrate Judge Diana Song Quiroga.

According to the criminal complaint, on four separate occasions, federal agents purchased 11 AR-type rifles from the three men. Last week, agents seized another 12 AR-type rifles as part of an undercover operation. The charges allege two of those weapons were fully automatic firearms. None of the firearms had any identifying markings or serial numbers, according to the complaint.  

“ATF targets firearms smuggling organizations, because stopping the flow of weapons illegally exported from the United States is a top priority," said Milanowski. “These offenders and their networks must be dismantled, as they remain a serious threat here in the United States.” 

“Stopping the flow of weapons illegally exported into Mexico is an urgent priority for HSI,” said Folden. “HSI along with its federal partners will continue to target firearms smuggling organizations and dismantle the networks responsible for supplying these egregious offenders before they fall into the hands of drug cartels which pose a threat here in the United States and abroad.”

If convicted, each faces up to five years imprisonment and a possible $250,000 maximum fine.

ATF and HSI are conducting the investigation with the assistance of Border Patrol, U.S. Marshals Service and the Laredo Police Department. Assistant U.S. Attorney Giselle S. Guerra is prosecuting the case. 

 A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law. 

###

HOUSTON – A 28-year-old former employee of BP America Inc. has admitted he attempted to extort money from the company, announced U.S. Attorney Ryan K. Patrick. George Koutsostamatis pleaded guilty to one count of wire fraud.  

Koutsostamatis, of Chicago, was a BP employee. While employed there, he admitted he sent an email to BP falsely claiming to possess personal information of company employees and their families. He also claimed he had infiltrated BP’s computers and computer network system. He threatened to release the information if he was not paid 125 bitcoins.   

U.S. District Judge Sim Lake accepted the plea today and has set sentencing for July 13, 2018. At that time, Koutsostamatis faces up to 20 years in federal prison and a possible $250,000 maximum fine.  He was permitted to remain on bond pending that hearing.      

The FBI Houston Cyber Task Force investigated this case. The FBI Houston Cyber Task Force is a multi-agency task force responsible for investigating, pursuing and defeating cyber criminals who seek to exploit our nation’s most significant computer systems, networks and critical infrastructure. The Houston field office of the FBI led the investigation with assistance from U.S. Attorney’s Offices in Houston and Chicago, FBI – Chicago field office and the National Crime Agency in the United Kingdom. Assistant U.S. Attorney Rodolfo Ramirez is prosecuting the case.

HOUSTON – A 31-year old resident of Webster has been ordered to prison following his conviction on one count of receipt of child pornography and one count of possession of child pornography, announced U.S. Attorney Ryan K. Patrick. Jake Nicholas Luera pleaded guilty June 27, 2017.

Today, U.S. District Judge David Hittner ordered him to prison for a total of 136 months after which he must immediately serve 15 years of supervised release, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender.

Luera came to the attention of law enforcement following an investigation dubbed Operation Back to School in August 2015 which targeted the online solicitation of minors. During the operation, Luera engaged in online chats with an undercover officer posing as a 15-year-old female and drove to a location where he believed he would make sexual contact with her.  

Following his arrest, authorities searched his home in Webster. They discovered and seized various items of computer media which a forensic analysis revealed more than 4,000 images and 75 videos of child pornography involving young children engaged in sexually explicit conduct. These videos included children under the age of 12 involved in sadistic conduct, including bondage.

At the time of his plea, Luera admitted he received and saved the images and videos on multiple storage devices.

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Houston Metro Internet Crimes Against Children Task Force conducted the investigation at the Pearland Police Department in conjunction with Immigration and Customs Enforcement’s Homeland Security Investigations.

This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

HOUSTON - The U.S. Attorney’s Office has resolved a claim that The Woodlands Retina Center violated the American with Disabilities Act (ADA) when it refused to treat a disabled patient because he was accompanied by a service animal, announced U.S. Attorney Ryan K. Patrick.

The United States initiated an investigation after receiving a complaint that alleged The Woodlands Retina Center discriminated against people with disabilities and denied equal access to medical services to people with disabilities who use service animals. The individual alleged The Woodlands Retina Center told him they had a “no dog policy” and refused to treat him because a service animal accompanied him during an eye appointment.

Under the ADA, persons with disabilities who are accompanied by their service animals shall be afforded the opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages or accommodations equal to that afforded to other individuals. The government is authorized to commence a civil action when it is believed discrimination exists, seeking damages and full compliance with the ADA including requiring the owners and operators of places of public accommodations to make reasonable modifications to policies, practices and procedures.

Dr. Wael Abdelghani owns The Woodlands Retina Center, which is a professional office and a place of public accommodation under the ADA.

“This settlement resolves an allegation of discrimination based on disability,” said Patrick.  “The announcement today should make clear that our medical professionals must provide reasonable accommodations to people with disabilities and that every member of our society is entitled to equal access to medical services.”

The settlement agreement requires The Woodlands Retina Center to adopt a service animal policy that will ensure it accepts and treats disabled patients accompanied by service animals.

The settlement agreement also requires The Woodlands Retina Center to pay the individual who made the claim compensatory damages.

Finally, the settlement agreement provides that the U.S. Attorney’s Office monitors the center to ensure it is meeting its obligations under the ADA.

Assistant U.S. Attorney Keith Edward Wyatt and Paralegal Specialist Raymond Babauta handled this matter on behalf of the U.S. Attorney’s Office.

HOUSTON – A 45-year-old Porter man has again been sent to prison, this time for three federal charges to include distribution, receipt and possession of child pornography, announced U.S. Attorney Ryan K. Patrick. Eric Furzland is a sex offender who has been required to register since his conviction for indecency with a child in 1997 in Harris County. He pleaded guilty Oct. 12, 2017.

Today, U.S. District Judge Alfred H. Bennett sentenced Furzland to a total of 288 months in federal prison. He will also serve 20 years on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. Furzland will also again be ordered to register as a sex offender.

Authorities believed Furzland was uploading and storing child pornography into a virtual storage account. He had been using a variety of online applications to chat with others about child pornography and trade materials. He later posted such materials to a cloud storage service and made the link to his account available to at least one other person.

Law enforcement executed a search warrant at his residence, at which time they seized computer media and cellular phones. Forensic analysis of the phone, computer media and virtual storage accounts revealed 300 child pornography images and 2000 child pornography videos.  

At a detention hearing held shortly after his arrest in April 2017, Furzland was found to be a flight risk and danger to the community. He has been in custody since that time where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation.

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

HOUSTON – A federal judge has found a 44-year-old legal permanent resident who lived in Sugar Land guilty of receipt, access with intent to view and possession of child pornography, announced U.S. Attorney Ryan K. Patrick. U.S. District Judge Alfred H. Bennett found Jacinto Lopez-Toledo guilty on Dec. 12, 2017, following two days of trial.

Today, Judge Bennett sentenced Lopez-Toledo to 120 months in prison to be immediately followed by 10 years of supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender. The court also imposed a $15,000 fine and a $10,000 special assessment for the Justice for Victims of Trafficking Act.

Lopez-Toledo came to the attention of law enforcement after investigators found evidence that he was accessing files from a website known to contain child pornography. A search warrant was executed on his residence on Dec. 1, 2015, at which time investigators seized two desktop computers, a laptop computer and an external hard drive. 

The forensic examination of the seized devices revealed Lopez-Toledo had 50,216 images and 941 videos of child pornography. These images and videos included children under the age of 12, bondage and acts of violence. Some of the images are of known victims as identified through the National Center for Missing and Exploited Children. 

At trial, the court found Lopez-Toledo had an additional 527,844 images and 969 videos which appeared to be child pornography but could not be confirmed as involving a minor. The court also heard that Lopez-Toledo had been collecting and viewing child pornography for several years, dating back to as early as 2003. 

Lopez-Toledo has previously admitted he would view and download child pornography from the internet and also from file sharing networks. Prior to trial, he argued those statements should be suppressed as well as the original search warrant which started the overall investigation.

The judge ultimately found him guilty as charged.

Previously released on bond, Toledo-Lopez was ordered into custody following the verdict where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI and the Pearland Police Department conducted the investigation with the assistance of the Sugar Land Police Department and Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorneys Julie N. Searle and Kimberly Leo prosecuted the case. 

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

HOUSTON –  A federal jury convicted former U.S. Representative Stephen E. Stockman for orchestrating a scheme to steal hundreds of thousands of dollars from charitable foundations and the individuals who ran those foundations to illegally finance Stockman’s campaigns for public office and to pay for his and others’ personal expenses. U.S. Attorney Ryan Patrick. Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Assistant Director in Charge Nancy McNamara of the FBI's Washington Field Office and Special Agent in Charge D. Richard Goss of IRS-Criminal Investigation’s (CI) Houston Field Office made the announcement.

Stockman, 60, of Clear Lake, was convicted of seven counts of mail and wire fraud, one count of conspiracy to make conduit campaign contributions and false statements to the Federal Election Commission (FEC), one count of making coordinated excessive campaign contributions, two counts of making false statements to the FEC, 11 counts of money laundering and one count of filing a false tax return.  Thomas Dodd, 38, of the Houston area, a former special assistant in Stockman’s congressional office, and Jason Posey, 46, formerly of Houston, a former Stockman congressional staffer, previously pleaded guilty to their involvement in the scheme.

“This case was a fantastic collaboration between the Southern District of Texas and the Department of Justice Criminal Division,” said Patrick.  When public officials use their office to defraud donors and violate federal law, we will hold them accountable. Corrupt officials like former congressman Stockman make it harder for the honest ones to do their jobs.”

“Stephen Stockman abused his position as United States Congressman to defraud charitable donors and then used the proceeds of his crimes to corrupt the election process and make a range of impermissible personal expenditures,” said Cronan. “The Criminal Division is committed to preserving the public’s confidence in our government by investigating and prosecuting corrupt public officials.  We also will continue to address the threat that illegal coordinated campaign contributions pose to the integrity of federal elections, and aggressively pursue these offenses at every appropriate opportunity.”

“Former Representative Stockman used his position as a Member of Congress to fraudulently solicit charitable donations for the purpose of keeping himself in public office,” said McNamara. “Today’s verdict shows that no one is above the law and the FBI and our partners will thoroughly investigate all allegation of violations of federal election system.”

“The integrity of our political system is paramount to maintaining our way of life,” said Goss. “IRS-CI Agents along with the assistant of our federal partners unraveled a scheme in which Stockman diverted considerable funds intended for charitable organizations for his own purposes that included funding his campaign. This type of behavior undermines our democracy and cannot be tolerated.”

According to the evidence presented at trial, from May 2010 to October 2014, Stockman solicited and obtained approximately $1.25 million in donations based on false pretenses. Specifically, in 2010, Stockman diverted a significant portion of $285,000 in charitable donations to pay for his and Dodd’s own personal expenses and to further Stockman’s own interests. The evidence at trial established that in 2011 and 2012, Stockman and Dodd received an additional $165,000 in charitable donations, much of which Stockman used to finance his 2012 congressional campaign.

According to the evidence at trial, shortly after Stockman took office in the U.S. House of Representatives in 2013, he and Dodd used the name of a nonprofit entity to solicit and receive a $350,000 charitable donation. Stockman used this donation for a variety of personal and campaign expenses, including illegal conduit campaign contributions, a covert surveillance project targeting a perceived political opponent and payments associated with Stockman’s U.S. Senate campaign in early 2014.

Trial evidence also demonstrated that in connection with Stockman’s Senate campaign, Posey used a nonprofit entity to secure a $450,571 donation in order to fund a purported independent expenditure for a mass-mailing project attacking Stockman’s opponent. In reality, Stockman directed and supervised the independent expenditure. Only approximately half of the donation was spent on the mail campaign, and Posey used a portion of the unspent balance to pay for expenses associated with Stockman’s Senate campaign and to fund personal expenses.

Stockman was taken into custody following the return of the verdict.

Sentencing has been set for Aug. 17, 2018. At that time, he faces up to 20 years for each of the mail and wire fraud charges, five years for the making coordinated campaign contributions, five years for each conviction of making false statements, another 10 years for each of the money laundering counts and up to three years for filing a false tax return.

The FBI and IRS-CI conducted the investigation. Assistant U.S. Attorney Melissa Annis of the Southern District of Texas and Trial Attorneys Ryan J. Ellersick and Robert J. Heberle of the Criminal Division’s Public Integrity Section are prosecuting the case.

A federal jury convicted former U.S. Representative Stephen E. Stockman for orchestrating a scheme to steal hundreds of thousands of dollars from charitable foundations and the individuals who ran those foundations to illegally finance Stockman’s campaigns for public office and to pay for his and others’ personal expenses.  Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Assistant Director in Charge Nancy McNamara of the FBI's Washington Field Office and Special Agent in Charge D. Richard Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.

Stockman, 61, of Clear Lake, Texas, was convicted of seven counts of mail and wire fraud, one count of conspiracy to make conduit campaign contributions and false statements to the Federal Election Commission (FEC), one count of making coordinated excessive campaign contributions, two counts of making false statements to the FEC, 11 counts of money laundering and one count of filing a false tax return.  Thomas Dodd, 38, of the Houston, Texas area, a former special assistant in Stockman’s congressional office, and Jason Posey, 46, formerly of Houston, a former Stockman congressional staffer, previously pleaded guilty to their involvement in the scheme.

“Stephen Stockman abused his position as United States Congressman to defraud charitable donors and then used the proceeds of his crimes to corrupt the election process and make a range of impermissible personal expenditures,” said Acting Assistant Attorney General Cronan.  “The Criminal Division is committed to preserving the public’s confidence in our government by investigating and prosecuting corrupt public officials.  We also will continue to address the threat that illegal coordinated campaign contributions pose to the integrity of federal elections, and aggressively pursue these offenses at every appropriate opportunity.”

“This case was a fantastic collaboration between the Southern District of Texas and the Department of Justice’s Criminal Division,” said U.S. Attorney Patrick.  “When public officials use their office to defraud donors and violate federal law, we will hold them accountable. Corrupt officials like former congressman Stockman make it harder for the honest ones to do their jobs.”

“Former Representative Stockman used his position as a Member of Congress to fraudulently solicit charitable donations for the purpose of keeping himself in public office,” said Assistant Director McNamara. “Today’s verdict shows that no one is above the law and the FBI and our partners will thoroughly investigate all allegation of violations of federal election system.”

“The integrity of our political system is paramount to maintaining our way of life,” said Special Agent in Charge Goss.  “IRS-CI Agents along with the assistant of our Federal partners unraveled a scheme in which Stockman diverted considerable funds intended for charitable organizations for his own purposes that included funding his campaign.” This type of behavior undermines our democracy and cannot be tolerated.”

According to the evidence presented at trial, from May 2010 to October 2014, Stockman solicited and obtained approximately $1.25 million in donations based on false pretenses.  Specifically, in 2010, Stockman diverted a significant portion of $285,000 in charitable donations to pay for his and Dodd’s own personal expenses and to further Stockman’s own interests.  The evidence at trial established that in 2011 and 2012, Stockman and Dodd received an additional $165,000 in charitable donations, much of which Stockman used to finance his 2012 congressional campaign.

According to the evidence at trial, shortly after Stockman took office in the U.S. House of Representatives in 2013, he and Dodd used the name of a nonprofit entity to solicit and receive a $350,000 charitable donation.  Stockman used this donation for a variety of personal and campaign expenses, including illegal conduit campaign contributions, a covert surveillance project targeting a perceived political opponent and payments associated with Stockman’s U.S. Senate campaign in early 2014.

Trial evidence also demonstrated that in connection with Stockman’s Senate campaign, Posey used a nonprofit entity to secure a $450,571 donation in order to fund a purported independent expenditure for a mass-mailing project attacking Stockman’s opponent.  In reality, the independent expenditure was directed and supervised by Stockman.  Only approximately half of the donation was spent on the mail campaign, and Posey used a portion of the unspent balance to pay for expenses associated with Stockman’s Senate campaign and to fund personal expenses.

Stockman was taken into custody following the return of the verdict.  Sentencing has been set for Aug. 17.

The FBI and IRS-CI conducted the investigation. Assistant U.S. Attorney Melissa Annis of the Southern District of Texas and Trial Attorneys Ryan J. Ellersick and Robert J. Heberle of the Criminal Division’s Public Integrity Section are prosecuting the case.

HOUSTON – The owner of multiple diagnostic businesses and a durable medical equipment company has been ordered to federal prison in relation to the Team Work Ready (TMR) health care fraud conspiracy, announced U.S. Attorney Ryan K. Patrick. Mark Edward Farias, 48, of Houston pleaded guilty April 17, 2017, admitting to a conspiracy to pay kickbacks, health care fraud as well as money laundering.

Today, U.S. District Judge Gray Miller handed Farias a 68-month sentence to be immediately followed by three years of supervised release. At the hearing, Judge Miller denied Farias’ request for probation and considered the duration of his criminal activity, the repetitive nature of the crime and the $4,122,980 his companies billed. The court also ordered Farias to pay $2,790,704 in restitution to the Department of Labor Office of Worker’s Compensation who administers the Federal Employees Compensation Act (FECA) health insurance program.

Farias was the owner of a durable medical equipment business known as AMR Medical Supply as well as three medical diagnostic businesses - Winlock Medical Surgical LLC, ARC Diagnostics LLC and Tessla Diagnostics LLC - located in Texas and Louisiana. As part of his guilty plea, Farias admitted he paid the owner and CEO of TWR – Jeffrey Eugene Rose, 55, of Houston - at least $436,213.54 in kickbacks for access to at least 419 patients from TWR clinics in Texas and Louisiana. Farias admitted he attempted to hide and conceal the kickback payments by indicating on the payments that they were for marketing. Farias did not receive any marketing services from TWR, just patients covered by the FECA program. In addition to engaging in kickbacks, Farias admitted he also committed health care fraud by submitting up-coded claims for the kickback patients, including claims for diagnostic testing that were not medically necessary, and for diagnostic reports that were not produced. Farias also admitted to engaging in money laundering with the criminal proceeds he received from FECA.

Rose was convicted of conspiracy, health care fraud, wire fraud and money laundering in October 2016 following a three-week trial. Also convicted were chief financial officer Pamela Annette Rose, 55, of Houston, along with the clinic’s vice president of operations Frankie Lee Sanders, 55, also of Houston. Team Work Ready defendants Pamela Rose and Sanders were sentenced in July of last year to 120 and 300 months, respectively. Jeffrey Rose is scheduled for sentencing on June 1, 2018, before U.S. District Judge Ewing Werlein Jr.

Farias was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

U.S. Postal Service - Office of Inspector General (OIG), Department of Labor – OIG, IRS - Criminal Investigation, Department of Veterans Affairs - OIG and Department of Homeland Security – OIG conducted the joint investigation. Assistant U.S. Attorney Julie Redlinger is prosecuting the case.

CORPUS CHRISTI, Texas - A 55-year-old resident of Pettus has been ordered to federal prison following his admission that he attempted to meet two underage boys for the purpose of sex, announced U.S. Attorney Ryan K. Patrick. Darrell Freeze pleaded guilty Oct. 30, 2017, to one count of online solicitation of a minor.

At a hearing late yesterday, Senior U.S. District Judge Janis Graham Jack sentenced Freeze to 380 months in prison. Additional information was also presented, including testimony from a federal agent that an individual in Arizona reported Freeze had sexually assaulted him when he was a minor. Freeze will also serve 25 years on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender. In handing down the sentence, Judge Jack noted freeze had not shown any remorse for his victims.

Freeze was communicating with a person he believed was the mother of two minor children - ages 14 and 11. He made arrangements to meet and engage in sexual contact with the minors, but was apprehended as he arrived at the designated meeting place. Freeze admitted to authorities he had sent messages indicating his intention to engage in sexual acts with the children. He was also in possession of condoms and candy he brought for the children.

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI, Immigration and Customs Enforcement’s Homeland Security Investigations, Corpus Christi Police Department—Internet Crimes Against Children Task Force and the Nueces County District Attorney’s Office conducted the investigation as part of Operation Hidden Predator.

Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

CORPUS CHRISTI, Texas – A 42-year-old resident of Corpus Christi has been ordered to prison following his conviction of two counts of online solicitation of minors and two counts of transfer of obscene material to minors, announced U.S. Attorney Ryan K. Patrick. A federal jury deliberated for approximately 20 minutes following less than two days of trial before convicting Spencer Salcedo on Jan. 9, 2018.

Today, U.S. District Judge Nelva Gonzales Ramos handed Salcedo a total 168-month sentence. Salcedo was further ordered to serve five years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. Salcedo will also be ordered to register as a sex offender.

According to the evidence presented at trial, Salcedo was communicating with a person he believed was the mother of two minor female children - ages 14 and 11. In reality, he was actually talking to an undercover police officer. During the course of the communications, he made arrangements to meet and engage in sexual activity with the mother’s children. Salcedo also sent sexually explicit photographs through text messages intended for the children.

He was apprehended as he arrived at the designated meeting place. At the time of his arrest, Salcedo had condoms with him and candy for the children.

At trial, the jury heard from an agent who testified that Salcedo gave a conflicting statement as to why he showed up to the meeting location.

Previously released on bond, Salcedo was remanded to custody following the verdict where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.  

Immigration and Customs Enforcement’s Homeland Security Investigations and the Corpus Christi Police Department - Internet Crimes Against Children Task Force conducted the investigation as part of Operation Hidden Predator, a joint investigation targeting individuals involved in online solicitation of minors. 

Assistant U.S. Attorney Hugo R. Martinez and Jeff S. Miller prosecuted the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

CORPUS CHRISTI, Texas – A 45-year-old Weslaco man has been ordered to federal prison following his conviction of human smuggling which resulted in the death of an undocumented alien trapped inside a toolbox, announced U.S. Attorney Ryan K. Patrick.

Juan Enrique Escobedo-Moreno pleaded guilty Jan. 5, 2018, admitting he smuggled the victim in his tractor trailer. The victim died after being trapped in a toolbox measuring only 30 inches long, 26 inches wide and 16 inches deep.   

Today, U.S. District Judge Janis Graham Jack handed Escobedo-Moreno a 210-month sentence to be immediately followed by three years of supervised release. At the hearing, additional evidence was presented detailing the defendant’s previous alien smuggling apprehensions and describing the egregious conditions under which Escobedo-Moreno transported the aliens in this case leading to the death of one of the aliens. In handing down the sentence of more than 17 years, the court noted Escobedo-Moreno exhibited “a complete disregard for human life."

According to the facts presented to the court at the time of the plea, Escobedo-Moreno drove his 2002 Kenworth tractor-trailer into the primary inspection area of the Falfurrias Border Patrol checkpoint shortly after midnight on Oct. 3, 2017. He claimed to be a hauling a load of watermelons from Edinburg to Houston and that no one else was with him. Upon inspection, authorities discovered one Mexican national hidden inside a small closet directly behind the driver’s seat. Escobedo-Moreno and that undocumented alien made no mention of anyone else in the vehicle.

Authorities later discovered the remains of an individual concealed in a tool compartment under the sleeper berth. When in the down position, the bed was secured with an exterior latch that would be inaccessible from inside the tool storage compartment under the bed and prevent anyone from freeing themselves. According to information presented in court, Escobedo-Moreno specifically instructed the victim to pull the bed down hard to make sure it would latch and stay closed. 

Escobedo-Moreno remains in custody pending transfer to a Bureau of Prisons facility to be determined in the near future.

Immigration and Customs Enforcement’s Homeland Security Investigations and Border Patrol conducted the investigation with the assistance of the Brooks County Sheriff’s Office. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuting the case.    

CORPUS CHRISTI, Texas - A 28-year-old Corpus Christi man has been ordered to federal prison after admitting to distribution of child pornography, announced U.S. Ryan K. Patrick. Randy Michael Ramirez pleaded guilty Jan. 29, 2018.

Today, Senior U.S. District Judge Janis Graham Jack sentenced Ramirez to 188 months in federal prison. Additional information was also presented today, including evidence that months before his arrest, Ramirez was communicating with an individual and was attempting to pay the individual to have sexual intercourse with an infant. Ramirez will serve the rest of his life on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender.

In May 2016, authorities discovered Ramirez was communicating with an undercover detective in Dallas and eventually sent a link which contained 76 videos of child pornography. During the communications, Ramirez told the undercover detective that he had access to a nine-year-old female and a 10-month-old infant that he would offer for sex.  Law enforcement was able to locate Ramirez and determined he did not have access to any children.  Authorities seized a cellular telephone from Ramirez’s residence which resulted in the discovery of more than 80 images and 12 videos of child pornography. Many of the videos involved sexually explicit conduct with children as young as infants.

At the time of his plea, the court heard that upon his arrest, Ramirez attempted to hide a cellular telephone. Law enforcement was able to locate the device and a forensic analysis revealed an additional 120 images of child pornography.

Ramirez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.  

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Corpus Christi Police Department - Internet Crimes Against Children Task Force.

Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

CORPUS CHRISTI, Texas - A local man has been ordered to federal prison following his conviction of illegal possession of a firearm, announced U.S. Attorney Ryan K. Patrick. Adam Alfredo Flores, 36, of Corpus Christi, pleaded guilty Jan. 4, 2018, to felon in possession of a firearm.

Today, Senior U.S. District Judge Janis Graham Jack sentenced Flores to 180 months imprisonment to be immediately followed by three years of supervised release. Flores had previously been convicted in state court for numerous felonies. In handing down the sentence today, the court determined him to be an armed career criminal.

In July 2017, officers with the Corpus Christi Police Department (CCPD) conducted a traffic stop on a vehicle for disregarding a stop sign. Flores was identified as the front seat passenger, at which time authorities discovered a loaded .22 caliber handgun underneath his seat. Flores, who had a previous felony conviction, is prohibited from possessing firearms and ammunition per federal law.

He was taken into custody as a part of Operation City Shield, a coordinated federal, state and local law enforcement effort to identify violent offenders, stop gun violence and protect the community.

In custody since his arrest, Flores will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. 

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the CCPD conducted the investigation. Assistant U.S. Attorney Lance Watt is prosecuting the case.

McALLEN, Texas – A 19-year-old resident of Donna has been ordered to federal prison for five years as a result of his conviction for conspiracy to transport undocumented aliens, announced U.S. Attorney Ryan K. Patrick. Jesse Zuniga pleaded guilty on Dec. 19, 2017.

Today, U.S. District Judge Randy Crane sentenced Zuniga to 60 months imprisonment to be immediately followed by three years of supervised release. The sentence was enhanced as the court took into consideration Zuniga’s role in the conspiracy, his use of minors to transport undocumented aliens and that fact Zuniga was heavily involved in overseeing the transportation cell of the alien smuggling organization. The court also considered the total number of aliens transported during the conspiracy, that a vehicular accident occurred during one of the transports which resulted in multiple aliens being sent to the hospital for minor injuries and that Zuniga had been arrested several times for transporting aliens when he too was a minor, among other factors.

Zuniga was involved in coordinating at least two separate alien transporting events from April 23, 2017, to Oct. 21, 2017.

On or about April 23, 2017, Border Patrol agents were conducting surveillance in the Donna area when they observed individuals emerge from the Rio Grande riverbank and load into a vehicle. After the vehicle departed from the area, agents attempted to conduct a traffic stop. The vehicle failed to stop and led agents on a pursuit that lasted approximately five miles and reached speeds of 100mph, which ended when the vehicle rolled over into an open field. Agents apprehended 16 undocumented aliens who were passengers in the vehicle, which included a three-year-old child. Five of the aliens were transported to a local hospital where they were treated for minor injuries.

On the second occasion, agents observed two vehicles driving in tandem near the riverbank of the Rio Grande near Donna. At the location, multiple subjects emerged from the nearby area and loaded into both vehicles, which then drove in a northbound direction away from the river. Shortly thereafter, agents stopped both vehicles.  Between both vehicles, agents apprehended a total of 10 undocumented aliens who were passengers in the vehicles.

Zuniga has been and will remain in federal custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Jacqueline Christine Medrano, 28, of McAllen, pleaded guilty for her role in the April event and is set for sentencing June 18, 2018. Darryin Nicole Uribe, 19, of San Juan, and Rey Angel Silguero, 19, of Alamo, were charged for their roles in the October smuggling event Both have pleaded guilty and are set for sentencing April 17, 2018.

Immigration and Customs Enforcement’s Homeland Security Investigations and Border Patrol conducted the investigation. Assistant U.S. Attorney Linda Requénez prosecuted the case.

A 71-year-old Kansas native who was residing in Panama pleaded guilty today to use of sexually explicit depictions of a minor for importation into the United States, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.

Jebediah Dishman, of Fredonia, Kansas, pleaded guilty to an information charging him with use of sexually explicit depictions of a minor for importation into the United States before U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas.  Sentencing is set for July 6.

Dishman was arrested in Houston on Nov. 8, 2016, on a criminal complaint.  On Feb. 1, 2017, a grand jury in the U.S. District Court for the Southern District of Texas indicted him on one count each of engaging in illicit sexual conduct with a minor in a foreign country, production of child pornography, sex trafficking of children, and obtaining custody and control of a minor for the purpose of producing sexually explicit visual depictions of the minor.

According to admissions made in conjunction with a plea agreement, in September 2014, Dishman began an approximately six-month trip to several countries in Southeast Asia.  During his trip to Indonesia, another tourist observed Dishman engaging in suspicious interactions with minors, masturbating while watching minors, and using a tablet to take photographs of a three-year-old German child.  The tourist confronted Dishman, seized his tablet, and turned it over to local authorities.  U.S. authorities later reviewed the tablet pursuant to a search warrant and discovered sexually explicit images of minors, including of the German child, as well as Internet searches indicating an interest in the sex trafficking of minors in Southeast Asia.

The FBI is investigating this case with the cooperation of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  Trial Attorneys James E. Burke IV and William M. Grady of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri Zack of the Southern District of Texas are prosecuting the case.  Assistant U.S. Attorney Elly Peirson of the Central District of Illinois, previously on detail at CEOS, also served as a vital member of the prosecution team at earlier stages of the litigation.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

HOUSTON – A federal judge has ruled that BestCare Laboratory Services LLC and its founder and CEO Karim Maghareh defrauded Medicare by billing for thousands of miles that were not actually travelled, announced U.S. Attorney Ryan Patrick.

U.S. District Judge Lynn Hughes of the Southern District of Texas awarded the United States $30,571.635 in damages from the Webster, Texas - based company. BestCare serves nursing homes throughout Texas, including San Antonio, Dallas, Austin, Waco and El Paso.

Dr. Richard Drummond discovered the fraud after hiring a former BestCare employee and learning of their billing practices. Drummond filed suit under the False Claims Act which allows private citizens who know of fraud to file suit on behalf of the United States.  

As detailed in that lawsuit, Medicare compensates laboratories which serve nursing home patients approximately a dollar per mile for technician travel. The travel must be for the purpose of collecting a specimen from a home-bound or nursing home-bound patient, not for the purpose of picking up and transporting specimens already collected. The miles are supposed to be pro-rated among the number of patients from whom they are collected. 

The court found that BestCare not only failed to prorate miles, but shipped batches of specimens by air freight to Houston at a cost of approximately $100 per batch then billed Medicare for the round-trip distance between the nursing home and the lab in Webster. 

The court found BestCare billed Medicare for $10.1 million in claims for miles which no lab tech traveled. The False Claims Act mandates trebling of the damages, resulting in a judgment of $30.5 million. 

The FBI, U.S. Department of Health and Human Services – Office of Inspector General investigated the case along with the U.S. Attorney’s Office and Civil Division of the U.S. Department of Justice. Assistant U.S. Attorneys Michelle Zingaro and Daniel David Hu and Trial Attorney Richard Nicholson handled the matter.   

BROWNSVILLE, Texas – A 29-year-old Brownsville resident has been ordered to prison following his conviction of being a felon in possession of a firearm, announced U.S. Attorney Ryan K. Patrick. Rafael Gandaria pleaded guilty Sept. 20, 2017.

Today, U.S. District Judge Rolando Olvera ordered him to prison for a total of 87 months in prison. At the hearing, the court heard that Gandaria is affiliated with Partido Revolucianario Mexicano, a security threat group in south Texas and Mexico, and that the sentence was necessary to protect the public from Gandaria’s future crimes.

The court also heard additional information regarding Gandaria’s criminal history which was determined to be in the highest criminal category under the U.S. Sentencing Guidelines. His convictions include simple battery in Georgia in 2005, attempted robbery in Brownsville in 2007, assault on a public servant in Brownsville in 2011, assault family violence in Brownsville in 2011, evading arrest in Brownsville in 2011, resisting arrest in 2013 in Florida and possession of a controlled substance in Minnesota in 2014.

As a convicted felon, he is prohibited from possessing a firearm per federal law.

His crimes included violent behavior while being incarcerated for this firearms charge. Judge Olvera also heard argument relating to Gandaria’s violence towards jailers while being detained and his transportation to and from jail for court settings. Judge Olvera noted Gandaria lacked remorse for his actions before handing down the sentence.

Gandaria had posted a rap video on Facebook in which he displayed a Smith & Wesson SD40VE pistol. In November 2016, authorities executed a search warrant at his residence, at which time they located and seized that firearm.

Gandaria will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Bureau of Alcohol, Tobacco, Firearms & Explosives conducted the investigation. Assistant U.S. Attorney Jason Corley is prosecuting the case.

CORPUS CHRISTI, Texas – A Mexican National on a visitor visa has entered a guilty plea to attempting to smuggle illegal aliens behind a load of produce, announced U.S. Attorney Ryan K. Patrick.

A federal grand jury returned the indictment against Luis Valero-Carrizales, 39, Feb. 28, 2018. Today, he pleaded guilty as charged.  

Valero-Carrizales admitted he conspired to transport illegal aliens hidden behind a load of produce in the trailer portion of the 18-wheeler he was driving. On Dec. 16, 2017, Valero-Carrizales drove a freightliner and approached the primary inspection lane at the U.S. Border Patrol Checkpoint near Falfurrias. During a routine immigration inspection, a service canine alerted to the trailer.

During a subsequent search of the vehicle, authorities discovered 53 illegal aliens hidden inside. The temperature inside the refrigerated trailer was 54 degrees.

He was taken into custody at that time where he remains pending his sentencing hearing, set for Aug. 2, 2018. At that time, he faces a maximum of 10 years in federal prison and a possible $250,000 fine.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the U.S. Border Patrol. Assistant U.S. Attorney Jeffrey S. Miller is prosecuting the case.

HOUSTON – A 24-year-old Houston woman has been ordered to prison for the armed robbery of two auto parts stores in the Houston area, announced U.S. Attorney Ryan K. Patrick. Latoya Taylor pleaded guilty Dec. 6, 2017, to two counts of interference with commerce by robbery and one count of brandishing a firearm during a crime of violence.

Today, U.S. District Judge David Hittner handed Taylor a 51-month sentence for the robberies. She also received an additional 84 months for the firearms charge which must be served consecutively to the other sentence imposed. The sentences will be immediately followed by three years of supervised release.

On April 1, 2017, Taylor robbed the Advance Auto Parts store at 1821 W Mount Houston Rd. She first robbed one employee and then went directly to the next register and pointed the gun at two more employees. All three employees were able to positively identify her as the lone robber. Authorities also discovered the same sunglasses and a hat she was wearing during the robbery after conducting a search of a family member’s residence.

Just a few days later, Taylor entered the AutoZone located at 2202 West 43 St. in Houston. She again pointed the gun at two employees, demanded money and left. Both of the employees were also able to identify Taylor.

She has been and will remained in custody.

The Bureau of Alcohol, Tobacco, Firearms and Explosives; Harris County Sherriff’s Office and the Houston Police Department conducted the investigation. Assistant U.S. Attorney Jennie Basile is prosecuting the case.

This is an example of coordination between law enforcement who are part of the Houston Law Enforcement Violent Crime Initiative which combines personnel and resources from numerous federal, state and local agencies. The goal is to proactively fight and reduce violent crime across the Greater Houston area by targeting the region’s most violent offenders, augmenting investigative and prosecutorial efforts, and enhancing training, public awareness and education.

The case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In late 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.

HOUSTON – A 28-year-old man from Houston has been ordered to prison for his convictions of distribution, receipt and possession of child pornography, announced U.S. Attorney Ryan K. Patrick. Samier Patrick Clark pleaded guilty to all charges Nov, 1, 2017.

Today, U.S. District Judge David Hittner sentenced Clark to 151 months in prison. At the hearing, the court heard that the images and videos included children under the age of five and that more than 50 videos were longer than five minutes in length with some as long as 45 minutes. In handing down the sentence, the court noted that Clark had been engaged in this type of behavior for seven years. Clark will serve a minimum of 10 years on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.

Clark first came to the attention of law enforcement in September 2016 after multiple images of child pornography were found associated with his online account. Authorities discovered Clark used a peer-to-peer network to obtain child pornography and later conducted a search of his residence, leading to the discovery of 68 videos and 143 images. Some of the images are of known victims identified through the National Center for Missing and Exploited Children. 

Clark admitted ownership of the child pornography as well as the online account and computer media he used to obtain it.  

At the time of his plea, Clark admitted to using peer-to-peer software to search for, download and obtain child pornography. He also admitted to distributing the child pornography through his online account. 

Clark was ordered into custody following his guilty plea where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation.

Assistant U.S. Attorney Julie N. Searle is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

HOUSTON – Two brothers are set to appear in court following the return of two indictments for their separate operations involving the possession and interstate transportation of stolen property, announced U.S. Attorney Ryan K. Patrick.

A federal grand jury returned the indictments March 28, 2018, against Yasser Saleh Ouwad, 47, of and Bilal Saleh Awad, 45, both of Houston. Luis Garcia-Oyuela, 33, a Honduran national who illegally resided in Houston is also charged for his role in Ouwad’s organization. Ouwad and Garcia-Oyuela are set for their arraignment today before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. Awad is scheduled for a detention hearing at 2:00 p.m. today before Judge Stacy. The indictment remains sealed as to others charged but not as yet in custody for their roles in the organizations.

Ouwad and Awad are alleged to have acted as high-level “fences” in multi-million dollar, multi-state criminal enterprises involving stolen over-the-counter (OTC) medicine, diabetic test strips and health and beauty supplies. The enterprises allegedly used “boosters” to steal OTC medication from large retailers.

A “booster” allegedly steals goods and merchandise not for personal use but for re-sale to a “fence” for a fraction of its retail value. A “fence” is a person who receives stolen goods and merchandise from “boosters” and others. The “fence” then re-sells the stolen goods and merchandise to third parties for a profit.

The scope of these criminal enterprises ranged from June 2015 to March 2018, according to the charges. 

The indictment alleges Ouwad owned and operated Houston-based GPS Wholesale Inc. which he ran from his warehouse at 12440 Oxford Park, in Houston. At his warehouse, he and Garcia-Oyuela would receive stolen OTC, clean the products of anti-theft stickers and security labels, re-package the products into pallets and ship the merchandise to wholesale companies in the New Jersey, according to the charges. The indictment further alleges he hired undocumented aliens from Central America to travel throughout the United States to steal the OTC, beauty products and diabetic test strips from major retail chain stores such as Wal-Mart, CVS and Walgreens. He allegedly facilitated this interstate travel by fronting the boosters with travel money, wiring them money during their travels and paying the boosters for the stolen merchandise.

Awad allegedly ran a similar operation, but received his stolen merchandise at Cube Smart at 7001 Synott Road in Houston. The indictment alleges he cleaned and re-packaged the stolen OTC merchandise at his residence in Houston before shipping the product to a wholesale company in Oceanside, New York.

To avoid detection by law enforcement, the undocumented aliens would ship the stolen merchandise to Ouwad and Awad using fictitious names and company names, according to the charges. Once the stolen merchandise arrived in Houston, Awad and Ouwad or their associates would allegedly remove any retail store identifying labels and security features. The indictment alleges the fences would then have the stolen products repackaged and shipped to wholesalers in the Northeast for profit.

Authorities conducted a search of Ouwad’s warehouse on Feb. 27, 2018, at which time they seized almost $600,000 in stolen OTC as well as inventory lists and numerous items related to his alleged criminal activity. The following day, Awad was found with similar items related to his operation at his residence.  

Ouwad, Awad and Garcia-Oyuela each face up to five years for conspiracy to transport stolen merchandise in interstate commerce as well as up to 10 years for each count of possessing and transporting interstate stolen merchandise. All charges also include a possible $250,000 maximum fine.

Immigration and Customs Enforcement’s Homeland Security Investigations and the Food and Drug Administration conducted the investigation with the cooperation of CVS, Walgreens, Proctor & Gamble, Johnson & Johnson, Roche, Abbott and Kroger. Assistant U.S. Attorneys Heather Winter and Richard Hanes are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.

CORPUS CHRISTI, Texas - A 30-year-old Corpus Christi man has admitted he sexually assaulted four minor females, announced U.S. Attorney Ryan K. Patrick. Matthew Joseph Lucio pleaded guilty to two counts each of online solicitation and production of child pornography.

In November 2017, the National Center for Missing and Exploited Children (NCMEC) notified authorities that Lucio had solicited a minor female via an internet messaging application for sexual intercourse. Law enforcement identified the minor female who confirmed the abuse. Days later, law enforcement received another NCMEC report that Lucio solicited a different minor female via an internet messaging application for sexual intercourse. Authorities identified the second minor female who also confirmed the abuse.

Law enforcement obtained a search warrant for Lucio’s residence, after which agents seized several digital devices and located narcotics. Forensic analysis of the devices led to the discovery of videos depicting the sexual assault of two different minor females. Both minors were located and also confirmed the abuse. All four minor females reported that Lucio drugged them before they were sexually assaulted.

Today, the court also heard that law enforcement has identified an additional six minor females and two adult females that have reported Lucio sexually assaulted them.

U.S. District Judge Nelva Gonzales Ramos accepted the guilty plea today and set sentencing for Aug. 9, 2018. At that time, Lucio faces a minimum of 10 years and up to life in federal prison for the online solicitation of a minor charges and a minimum of 15 and up to 30 years for production of child pornography. Lucio also faces a possible $250,000 maximum fine on each charge. Upon completion of any prison term imposed, Lucio also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet.

Lucio was arrested on federal charges in February 2018 and has been in custody since that time where he will remain pending his sentencing hearing.  

Immigration and Customs Enforcement’s Homeland Security Investigations, Corpus Christi Police Department—Internet Crimes Against Children Task Force and the Nueces County District Attorney’s Office conducted the investigation with the assistance of NCMEC.

Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

HOUSTON – A Houston man will be serving nearly 43 years in prison for the attempted robbery and robbery of the Shared Resources Credit Union and for using and carrying a firearm during commission of the crimes, announced U.S. Attorney Ryan K. Patrick. A federal jury deliberated for less than five hours before convicting Raynard Gray, 34 and Sonny Pervis, 28, March 23, 2017, on all counts as charged following a three-day-trial.

Today, U.S. District Judge Sim Lake handed Gray a total sentence of 510 months in federal prison – 150 months for the robberies in addition to five years for the first firearms charge and another 25 years for the second which must be served consecutively to each other and to the bank robbery sentences. Following completion of his more than 42-year prison term, he will serve five years of supervised release. In imposing the sentence, the court found that Gray planned, organized and recruited participants for the bank robbery and that he was the leader of this robbery crew which warranted the most prison time.  

Pervis was previously sentence to a total of 485 months in federal prison. His sentence was also enhanced due to the reckless endangerment during flight. The judge found that following the robbery, Pervis aided and abetted the high speed chase and fired his weapon at a civilian in a nearby neighborhood. 

A total of seven men met and planned the robbery of the credit union. At trial, the jury heard Gray was the leader of this robbery crew and acted as a lookout during the robberies, while Pervis was one of the men who entered the credit union and brandished and discharged a firearm.

They arrived at the bank first on Saturday, July 26, 2014, with the intention of committing the robbery. The jury heard that employees inside the bank observed the men with the firearms as they approached. However, the doors to the lobby were locked so the crew left, but returned two days later to complete the crime.

The men fled the scene after stealing the money on July 28. A civilian followed them in order to give police the vehicle information of the robbers, during which time Howard Glaze, 24, of Houston, and Pervis discharged their firearms in a neighborhood in his direction. The group then led officers on a high-speed chase from Pasadena to north Houston, where they abandoned their vehicle and fled on foot. Glaze was soon apprehended. The investigation later led to the discovery and arrest of the others.

During trial, the jury saw surveillance videos, photos and police dash camera footage of the high speed chase and heard testimony from 12 witnesses. They also heard from a sergeant with the Pasadena Police Department who collected cash, bank straps and clothing of the robbers from the abandoned vehicle. The officer was also able to lift a fingerprint off a trash bag found in that vehicle, which belonged to Pervis. 

The defense did not dispute that the robberies occurred, but contended that Pervis and Gray were not involved. The jury was not convinced and convicted them on all charges.

Gray will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The remaining five co-defendants - Keith McGee, 27, Glaze, Kwhun Johnson, 25, Leroy Richardson, 37, and Christopher Braziel, 30, all of Houston, had pleaded prior to trial. McGee was ordered to serve a sentence of 140 months, while Richardson, Johnson and Glaze received respective sentences of 130, 60 and 130 months imprisonment. Braziel is set for sentencing June 14, 2018.

The FBI and police departments in Pasadena and Houston conducted the investigation. Assistant U.S. Attorneys Richard Hanes and Heather Winter are prosecuting the case.

HOUSTON – A convicted tax offender has been charged again, this time for failing to serve his prison sentence, announced U.S. Attorney Ryan K. Patrick.

Kermit Woods is set to appear before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. today.

Woods had owned and operated an income tax preparation business in Houston known as L&L Finance. He pleaded guilty in March 2012 to willfully preparing a false U.S. Individual Income Tax Return. He was sentenced in January 2013 to 24 months in prison and ordered to pay the IRS restitution of $362,340.

At the time of his sentence, the court had permitted him to remain on bond and voluntarily surrender to the U.S. Bureau of Prisons on Feb. 26, 2013. He never reported as ordered, according to the charges. He remained a fugitive until his recent arrest in Arizona.

If convicted of failing to appear, Woods faces another maximum of 24 months in prison in addition to the already-imposed 24 months for the tax offense.

IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorney Charles J. Escher is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.

CORPUS CHRISTI, Texas – A 38-year-old Corpus Christi man has been convicted of possessing stolen mail, announced U.S. Attorney Ryan K. Patrick along with Postal Inspector in Charge Adrian Gonzalez of the U.S. Postal Inspection Service (USPIS).

Christopher Escobedo admitted to stealing packages that the U.S. Postal Service (USPS) had left on the front porches of Corpus Christi residents between Dec. 31, 2017, and Jan. 8, 2018. Authorities identified Escobedo or his vehicle in video surveillance at a number of locations where packages were stolen. On one occasion, an observant neighbor confronted Escobedo as he attempted to take a package. The neighbor was able to supply the authorities with Escobedo’s description and a license plate number of the vehicle he was using. Postal inspectors used this information to track down Escobedo and link him to a number of other package thefts in the area. 

“The USPIS is committed to ensuring customers’ mail is protected from theft and criminal activity,” said Gonzalez. “Our efforts to protect the nation’s mail system is a strategic part of our mission and one of our highest priorities. Postal inspectors will vigorously pursue anyone attempting to commit theft against the USPS and its customers.”

U.S. District Judge Nelva Gonzales Ramos accepted the plea today and set sentencing for July 19, 2018. At that time, Escobedo faces up to five years in federal prison and a possible $250,000 maximum fine.

The USPIS conducted the investigation with the assistance of the Corpus Christi Police Department. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuting the case.

McALLEN, Texas – Two men have been ordered to federal prison following their convictions in a cocaine trafficking conspiracy, announced U.S. Attorney Ryan K. Patrick. Jesus A. Villarreal, 58, of Sullivan City, and Juan Cristobal Hernandez, 39, of Reynosa, Tamaulipas, Mexico, pleaded guilty Feb. 6, 2017.

Today, U.S. District Judge Ricardo Hinojosa ordered Villarreal and Hernandez to each serve 92 months, respectively. Villarreal will serve three years of supervised release following completion of his prison term. Not a U.S. citizen, Hernandez is expected to face deportation proceedings following his sentence.

Both admitted they conspired to possess with the intent to distribute cocaine. As part of their guilty pleas, each admitted to assisting with coordinating the trafficking of 108 kilograms of cocaine from McAllen to Houston from April 2 to April 9, 2015. Both were also held responsible for a total of 134 kilograms of cocaine as the court considered another narcotics seizure in which both men were involved.

Both men have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Rolando Martinez Jr., 33, of Rio Grande City, is also charged in the case. He is considered a fugitive and a warrant remains outstanding for his arrest. Anyone with information about his whereabouts is asked to contact the Drug Enforcement Administration (DEA) at 1-956-992-8400 or Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) at 1-866-347-2423.

The DEA and HSI conducted the investigation dubbed Operation Killing Time with the assistance of the Texas Department of Public Safety and task force officers from police departments in San Juan, McAllen, Palmview, Weslaco and Mission. Assistant U.S. Attorney Juan F. Alanis is prosecuting the case.

CORPUS CHRISTI, Texas - A 26-year-old former Navy sailor has been convicted of distributing a video depicting the drowning of puppies, announced U.S. Ryan K. Patrick.

In June 2016, Naval Criminal Investigative Service (NCIS) agents were notified that Petty Officer Third Class Daniel James O’Sullivan would be in possession of disturbing videos depicting the torture and killing of animals. Authorities interviewed him at Naval Air Station Corpus Christi where he was stationed at the time. O’Sullivan admitted he distributed a video to an individual in Montana that depicted the drowning of puppies in a river. That individual admitted to receiving the video. 

Law enforcement conducted a forensic search on his digital devices which resulted in the discovery of the video depicting the drowning of puppies and other animal crush videos. In one video, a dog’s mouth is closed with duct tape as it is set on fire. In another, a dog is thrown off a high-rise building. Other videos depict mice and baby chicks being ground-up in a blender. 

Under federal law, it is illegal to depict - via photograph, motion-picture film, video, digital recording or electronic image - actual conduct in which one or more living non-human mammals, birds, reptiles or amphibians is intentionally crushed, burned, drowned, suffocated, impaled or otherwise subjected to serious bodily injury, and is obscene.

This is the second such case prosecuted in this district. The first resulted in a 57-month federal prison sentence and was believed to be the first indicted nationwide since the statute was amended in 2010.  

In September 2017, O’Sullivan received an other than honorable discharge from the Navy.

Sentencing has been set before U.S. District Judge Nelva Gonzalez Ramos on Aug. 2, 2018. At that time, O’Sullivan faces up to seven years in federal prison and a possible $250,000 maximum fine. O’Sullivan was allowed to remain on bond pending that hearing.  

NCIS conducted the investigation. Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case.

HOUSTON – A 45-year-old former Richmond man has been given the statutory maximum sentence for systematically torturing a former girlfriend by sending horrific images and threatening email messages, announced U.S. Attorney Ryan K. Patrick. The jury returned its verdict Oct. 27, 2017, against Heriberto Latigo following five days of trial and less than two hours of deliberations.

This is the first case tried in the Southern District of Texas in which a defendant used the internet to cause substantial emotional distress. In the last 10 years, less than 100 defendants have been convicted using this federal stalking statute.

Today, U.S. District Judge Kenneth Hoyt sentenced Latigo to 60 months in prison. Additional information was also presented today, including a letter the victim had written which detailed the torment she endured and how Latigo’s actions have changed her life forever, stating that no matter how hard she has tried, she has not been able to overcome what he did to her. “There was not a day that I didn’t feel scared,” she said.

Latigo was further ordered to serve three years on supervised release following completion of his prison term during which time the court ordered him to get mental health treatment. Judge Hoyt also noted that the maximum sentence imposed may not be sufficient for the crime and stated the possibility that Latigo might just be “mean and evil.”

Latigo began a romantic relationship with the victim in 2013. As it progressed, Latigo’s conduct became controlling and demanding to include forcing her to send him naked images of her. The relationship eventually devolved into physical altercations to include an alleged rape. The victim testified that she was and is afraid of Latigo.

In June 2014, she discovered she was pregnant. She testified that Latigo was so controlling and crazy during this time that she decided to end the pregnancy. Latigo found out and created a Facebook page titled “Magdelana Aborted” where he pretended to be the aborted fetus, sent the link to her and said “Your abortion video will now be posted you whore.” She was so upset that she overdosed on tranquilizers in an attempt to take her own life. 

From March 2014 to April 2015, Latigo used threats and blackmail tactics to force the victim to do things against her will. Latigo had used the naked images she had previously sent during their relationship to compel her to do a variety of things, including complying with his sexual demands. If she refused, he would post the images online until she acquiesced. On many occasions, she had to contact Google to have naked pictures of her removed. Latigo also sent the images to her sister, her sister’s boss and male co-workers in an effort to control and harass her.

Latigo used his own email address to send messages to the woman in which he berated her and demanded she do things. He even created a Gmail account and Google+ page with the victim’s name and used a naked photograph of her as the profile picture.

Latigo’s actions caused the victim to move. She even changed jobs. She closed her Facebook account and got offline. However, he ultimately found her again, went to her new job and continued to harass her.

The jury also heard from another witness that placed Latigo at the victim’s daughter’s school indicating he was physically stalking her. A computer forensic expert also testified that Latigo accessed multiple Facebook accounts and the victim’s email from his own computer and attempted to cover his trail in the process.

Latigo represented himself during the trial and attempted to convince the jury that this entire case was about the victim wanting to hurt him. He claimed she created the accounts used to harass her. However, she actually broke down in tears on the stand when she learned her naked images had been sent in response to a Craigslist ad she supposedly created. No evidence was presented to the jury that demonstrated the victim ever had control of either of these accounts. In fact, Latigo’s owne xpert witness testified that the email address at issue was created on one of Latigo’s computers seized by the FBI during a search of his home.

The jury ultimately did not believe Latigo’s claims and found he intentionally harassed the victim and caused her substantial emotional distress. He was convicted as charged.

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation. Assistant U.S. Attorneys Sherri Zack and Steve Schammel are prosecuting the case.

McALLEN, Texas – A 45-year-old Mexican national residing in San Juan has been sentenced for his leadership role in a drug trafficking case involving nearly 40 kilograms of cocaine, announced U.S. Attorney Ryan K. Patrick. Carlos Guerrero pleaded guilty Aug. 28, 2015.

Today, U.S. District Judge Ricardo H. Hinojosa confirmed that Carlos Guerrero was previously convicted of a federal drug trafficking crime and re-imposed a 240-month sentence that he originally ordered on March 15. The court found Guerrero to be a leader/organizer within the drug trafficking organization. The sentence was enhanced due to his 2005 convictions for conspiracy to possess with intent to distribute more than five kilograms of cocaine and possession with intent to distribute approximately 45.5 kilograms of cocaine. Not a U.S. citizen, he is expected to face deportation proceedings following completion of the sentence.

On May 28, 2015, authorities followed a vehicle from the Hidalgo Port of Entry to a parking lot in McAllen. Yadira Martinez-Gomez, a 24-year-old Mexican national, was driving. She then handed the vehicle off to 43-year-old Mexican national Rodolfo Hernandez-Flores who drove it to Guerrero’s residence in San Juan. A search of the vehicle and the residence led to the seizure of 39 kilograms of cocaine. Raul Sanchez-Solano, a 40-year-old Mexican national, and Guerrero were arrested at that time and charged for storing the narcotics at the residence.

Martinez-Gomez was previously sentenced to 37 months imprisonment, while Sanchez-Solano and Hernandez-Flores received 60 and 48 months in prison, respectively.

Guerrero has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Pharr Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Kristen J. Rees prosecuted the case.

CORPUS CHRISTI, Texas - A 28-year-old Corpus Christi man has admitted he distributed child pornography, announced U.S. Attorney Ryan K. Patrick.

In November 2017, an electronic chat room company notified the National Center for Missing and Exploited Children (NCMEC) that a known image of child pornography had been uploaded to an internet chat room. Authorities were able to link the specific IP address associated with a user known as “jack” to Parker J. Pendergraph.

Law enforcement determined Pendergraph was employed as an assistant band director for a local high school and middle school and obtained a search warrant for his residence. At that time, authorities seized several digital devices that led to the discovery of the known image of child pornography uploaded to the chat room. In addition, law enforcement also located more than 500 images and 390 images of child erotica.   

The image uploaded to the chat room was located on one of Pendergraph’s digital devices. The image depicted a minor female approximately 14 years of age that is nude and sitting on a chair with her knees bent exposing her vagina to the camera. Pendergraph was shown the image, after which he admitted to uploading it.

Pendergraph also acknowledged going to chat sites and wanting to trade pictures of nude girls. He further stated he had seen images of child pornography on his computer for almost a year.  

Today, Pendergraph admitted he knew the image he distributed was child pornography.

Sentencing is set before U.S. District Judge Nelva Gonzalez Ramos on July 19, 2018. At that time, Pendergraph faces a minimum of five and up to 20 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Pendergraph also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet.

Immigration and Customs Enforcement’s Homeland Security Investigations and Corpus Christi Police Department’s – Internet Crimes Against Children Task Force conducted the investigation with the assistance of NCMEC.  

Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

HOUSTON – Two Nigerian citizens, both of whom reside in Houston, have been ordered to federal prison for perpetuating a wire fraud scheme involving various internet scams, announced U.S. Attorney Ryan K. Patrick. Idowu Olugbenga Temetan aka David Cole, 30, and Adeltilewa Olamigoke Afolabi Ikuejuyone aka Kuffour Duval, 36, previously pleaded guilty to conspiracy to commit wire fraud and three counts of wire fraud. Temetan also admitted to one count of passport forgery. 

Today, U.S. District Judge Sim Lake handed Temetan a 51-month sentence, while Ikuejuyone received a 45-month sentence yesterday. Both defendants were also held jointly and severally liable to pay $187,422.60 in restitution. As both are not U.S. citizens, each are expected to face deportation proceedings following their sentences. 

At Ikuejuyone’s sentencing, the court heard testimony from a relative of one of the victims who testified about the emotional and financial toll the defendant’s criminal actions had taken on their family. During Temetan’s sentencing hearing today, he acknowledged his mistakes and apologized to the victims for his actions. In handing down the sentences, the court noted the defendants engaged in a series of actions over an extended length of time to defraud multiple victims.

From October 2013 until March 2014, Temetan and Ikuejuyone used counterfeit passports to open bank accounts in the greater Houston area. The passports contained photographs of Temetan and Ikuejuyone but utilized the aliases of David Cole and Kuffour Duval, respectively. Both Temetan and Ikuejuyone then worked with others to lure victims into sending money into various bank accounts under their sole ownership and control. These funds were obtained through a variety of internet scams, including lottery scams and business investment scams. Checks or wire transfers were then sent from the victims’ bank accounts to accounts Temetan and Ikuejuyone controlled. Temetan, Ikuejuyone and their co-conspirators would then use the counterfeit passports to retrieve the fraudulently obtained funds.  

Law enforcement has been able to trace at least $4 million to victims, some of whom who reside in Houston, that have been affected by this scheme. The conspiracy resulted in the defrauding of one elderly victim of $3 million alone. After authorities identified this victim, they were able to trace the accounts into which the monies were being deposited. 

Temetan and Ikuejuyone will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorneys Julie N. Searle and Rick Bennett prosecuted the case.

HOUSTON – A 46-year-old inmate who formerly resided in Houston has received another federal sentence for threatening a U.S. District Judge, announced U.S. Attorney Ryan K. Patrick. George Yarbrough pleaded guilty Sept. 8, 2017.

Today, U.S. District Judge Harmon handed Yarbrough a 120- month sentence. In handing down the sentence, the court noted that this was the second time Yarbrough has been convicted of sending a threatening letter to the same federal judge. He was sentenced in that case to 21 months which will be served consecutively to the previous prison term imposed today.

Yarbrough is currently in the custody of the Texas Department of Criminal Justice (TDCJ). While in custody, Yarbrough wrote a letter threatening to kill a Houston federal judge. The U.S. District Court Clerk’s Office in Houston received the letter on April 19, 2017. In the letter, Yarbrough said “So the State of Texas and the Fed. Govt. (illegible), are to Blame: for me killing you, and your family.” It also included that “Everyday I look at your photo, that I got of the internet, and think of many ways to kill you, and your family.” 

Yarbrough previously wrote a similar letter in 2014. In that case, Yarbrough indicated the basis for the threat was because the judge had had dismissed a civil rights lawsuit Yarbrough filed against TDCJ personnel several years earlier. He had stated then that he was going to murder the judge upon his release from TDJC and blamed the judge for all his problems. He added that he had people on the outside that would murder the judge if something happened to him before he got out. Yarbrough also said he was going to murder a judge in San Antonio who took his daughter away. 

In the current case, Yarbrough admitted writing the letter, expressing his concern that he is not being taken seriously as the sentence he received the fist time was so short, referring to it as a “slap on the wrist.” During the interview with authorities, he again threatened the judge, a state senator and two prison guards which who were the basis of the original civil lawsuit.

He will be returned to state custody. Upon his release there, he will be transferred to a U.S. Bureau of Prisons facility to be determined in the near future to serve his total 120 month federal prison term. Yarbrough was also ordered to serve a three-year term of supervised release upon his release from federal prison, during which he will participate in mental health counseling.

The U.S. Marshals Service and FBI conducted the investigation. Assistant U.S. Attorney Jennie Basile is prosecuting the case.

HOUSTON – A 34-year-old Nigerian man who was residing in Houston has been ordered to prison for conspiracy to commit mail fraud and aggravated identity theft, announced U.S. Attorney Ryan K. Patrick. Azeez Abiodun Balogun pleaded guilty Oct. 27, 2017.

Today, U.S. District Judge Ewing Werlein Jr. handed Balogun a 75-month sentence. Not a U.S. citizen, Balogun is expected to face deportation proceedings following the sentence. At the hearing, the court noted that this was a sophisticated scheme that began in 2015 and that he only stopped when he caught.

From on or about Jan. 1, 2015, through April 13, 2017, Balogun was involved in a conspiracy that involved many schemes to defraud via the U.S. mail and using personal identifying information (PII) of individuals without their permission.

He would open bank accounts with counterfeit passports in order to facilitate fraud payments into these accounts. Balogun would then use the stolen PII to apply for credit cards. He opened approximately 30 credit card accounts at Bank of America, Chase Bank and others by using the stolen information.

Additionally, he also engaged in Stolen Identity Refund Fraud (SIRF) in which he would use the stolen PII to apply for tax refunds. The stolen funds were then loaded onto prepaid debit cards and mailed to addresses Balogun or others controlled in the Houston area.  

The investigation unraveled approximately 10 different identities and passports Balogun used to open bank accounts and receive fraudulent funds from the various his schemes. The total loss attributed to his conduct is $2,976,265.

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.  

The U.S. Postal Inspection Service conducted the investigation along with Department of State – Diplomatic Security Service. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.

LAREDO, Texas – A 57-year-old man has been ordered to prison following his conviction of trafficking heroin, cocaine and nearly 12 kilograms of fentanyl, announced U.S. States Attorney Ryan K. Patrick. Jeffrey Layne Parker, of Belleville, Illinois, pleaded guilty Aug. 31, 2017.

Today, visiting U.S. Appellate Judge Kimberly Moore ordered Parker to serve a total of 168 months in federal prison to be immediately followed by five years of supervised release. At the hearing, additional evidence was presented including evidence that fentanyl is 30 to 50 times more powerful than heroin and that one gram of fentanyl can result in the deaths of between 300 and 500 people. The fentanyl found in Parker’s car could have caused the deaths of up to 5.8 million people - more than the populations of Dallas, San Antonio and Houston combined. In handing down the sentence, Judge Moore denied Parker’s requests for leniency, noting the quantities of narcotics found in Parker’s possession, his extensive criminal record and the fact that Parker had transported narcotics loads at least four times.

Parker was first arrested March 7, 2017, after authorities found 16 packages of narcotics concealed in the trunk of Parker’s car at the Border Patrol (BP) checkpoint just north of Laredo. The narcotics included 11.77 kilograms of fentanyl, 1.85 kilograms of heroin, 76 grams of cocaine and 1.41 kilograms of marijuana. He was arrested but later released following a medical issue.

Parker was arrested three months later on June 7, 2017. At that time, he approached the same checkpoint and agents found nine bundles containing 11.15 kilograms of heroin hidden behind the speakers in a Ford pickup truck he was driving. 

Parker has been in federal custody without bond since his second arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Drug Enforcement Administration conducted the investigation with the assistance of BP. Assistant U.S. Attorney Mike Eaton is prosecuting the case.