District of Utah

SALT LAKE CITY – Hubert Ivan Ugarte, 52, of Draper, Utah, pleaded guilty for his role in two separate fraud schemes last week in federal court. Ugarte first pleaded guilty to charges related to a federal bribery case involving the procurement of FedEx Ground (FXG) contract shipping routes worth $24 million dollars of profit and also pleaded guilty to fraudulently obtaining a federal Paycheck Protection Program (PPP) loan for other trucking companies.

In the bribery case, Ugarte was convicted of fraud and money laundering charges for his involvement in a pay-to-play trucking scheme where prosecutors alleged that Ugarte was one of ten defendants who paid approximately $1 million in bribes to the Utah FXG Ground Hub manager in order to exploit the manager’s position with FedEx and make their trucking businesses as lucrative as possible.

In the plea agreement, Ugarte admitted to bribing the FXG senior linehaul manager, Ryan Lee Mower, with approximately $490,000 which netted Ugarte’s trucking companies over $24 million dollars during a seven-year period between 2012 and 2019. In exchange for the bribe payments, the FXG manager awarded Ugarte’s companies with several delivery routes from FXG that Ugarte would not have qualified for under FXG’s established policies.

In order to carry out the scheme, Ugarte and the FXG manager worked to obscure the ownership of Ugarte’s many trucking companies by filing false compliance reports with FXG in order to award Ugarte with more trucking routes than one business owner was entitled to under established FXG policies. As a result, Ugarte was allowed to operate at least 45 trucking routes originating from the Salt Lake FXG hub, greatly exceeding the FXG limit of only 15 trucks for the Salt Lake City hub. This practice, known as “over scaling” in the contract shipping industry, along with the payment of bribes to the FXG manager, would have resulted in the automatic termination of Ugarte’s contracts if discovered by authorities at FXG. Throughout the scheme, Ugarte’s companies received approximately $135,000,000 in gross payments from FXG, resulting in net profits to his trucking companies of approximately $24,000,000.

In the second case involving Paycheck Protection Program (PPP) loan fraud, Ugarte pleaded guilty to submitting a fraudulent loan application to the Small Business Administration (SBA) through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Ugarte admitted that he fraudulently obtained $210,000 in PPP loans after failing to disclose that he was under federal indictment for his role in the fraudulent trucking scheme.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering from the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $249 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding.

PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses.

On May 14, 2020, Ugarte received $210,000 from Transportation Alliance Bank under the PPP. Instead of using at least 75 percent of the loan to pay payroll costs, including bounced payroll checks, Ugarte used 60 percent of the loan to pay the past due truck payments – leaving 40 percent for payroll costs.

Sentencing is set for June 3, 2021, in both matters.

Assistant United States Attorneys in the Utah U.S. Attorney’s Office prosecuted the cases against Ugarte. Special Agents from the FBI, IRS, and the Department of Transportation Office of Inspector General conducted the investigations.

SALT LAKE CITY – Attorney Matthew Kober, 45, of Draper, Utah, was charged via criminal information on Monday with one count of conspiring to launder money obtained via wire fraud in federal court.

The criminal information alleges that beginning in 2018, Kober formed a sports betting software company in Nevada known as “Sindakit Software LLC” and that Kober used this Nevada company to launder money obtained from the financial fraud scheme operated by Christopher Hales. Hales has already pled guilty to operating the fraudulent scheme in a different federal case and is scheduled to be sentenced on April 20, 2021.

The information further alleges that Kober opened a bank account in the name of Sindakit Software; that Kober and Hales immediately began utilizing the account to launder the money obtained from Hales’ fraudulent scheme; that Kober accepted wire transactions from one victim of Hales’ scheme totaling $405,000; and that Kober partially redistributed the funds to prior victims of the scheme, along with wiring $15,000 to his own law firm’s bank account.  The United States is also seeking a money judgment in the amount of $259,096.41, in addition to the criminal charges filed against Kober.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special Agents from the FBI and the IRS conducted the investigation.

Criminal charges are not findings of guilt.  Individuals charged in an information are presumed innocent unless or until proven guilty in court.

SALT LAKE CITY – Andrea T. Martinez is the Acting United States Attorney for the District of Utah, appointed on March 1, 2021, by virtue of the Vacancies Reform Act. As Acting U.S. Attorney, Ms. Martinez will serve as the District’s chief federal law enforcement official until a successor is nominated by the President and confirmed by the U.S. Senate. Ms. Martinez is only the third woman to serve as the Acting United States Attorney in the District of Utah and is the first Latina to hold the position.

Ms. Martinez is a career prosecutor who has dedicated her professional life to public service.  She has served in the United States Attorney’s Office for more than a decade.  As an Assistant United States Attorney, Ms. Martinez has been involved in the full spectrum of violent crime prosecution including drug trafficking, federal firearm, and child exploitation cases. She also prosecuted crimes in Indian Country.  Ms. Martinez has held an array of leadership positions within the office, including First Assistant United States Attorney, Violent Crime Deputy Section Chief, Senior Litigation Counsel, Violence Against Women Act Coordinator, District Diversity Chairperson, and Project Safe Childhood Coordinator.  

Ms. Martinez began her career at the Salt Lake County District Attorney’s office where she prosecuted felony narcotic, aggravated assault, special victim and homicide cases.  She also prosecuted cases while assigned to the Juvenile and Misdemeanor Divisions.  Ms. Martinez is from Utah.  She graduated from the University of Utah, S.J. Quinney College of Law in 2001, and was awarded a Bachelor of Arts degree, with a double major, from the University of Utah in 1998. 

ST. GEORGE, UTAH – Kurt Bauer 57, of Kanab, Utah, was sentenced to 78 months in federal prison after pleading guilty to three counts of wire fraud and two counts of falsely impersonating U.S. government employees in connection with an advanced-fee scheme. Bauer was also ordered to pay $856,422 in restitution to the victims of his crimes.

According to the plea agreement, between 2011 and 2020, Bauer created a fraudulent scheme where he told his victims that he was entitled to hundreds of millions of dollars—even billions—which were frozen in federal court proceedings. Bauer promised his victims that he would pay them large amounts of money if they would pay Bauer money up front, which he would then use to pay court fees to obtain the money frozen in the federal court proceedings. Bauer promised all of his victims large returns on their upfront investment. Bauer received at least $200,000 from two victims who were 80 and 82 years old, respectively, over the course of the scheme.

In order to carry out the fraud, Bauer created the false identities of a New York attorney, a federal court employee, and a billionaire, which he used to communicate with and solicit money from the victims of the scheme. Bauer would use these identities to solicit funds from these victims on a regular—sometimes weekly—basis. Bauer would tell his victims that the money in the federal court proceedings would be released soon and that he needed the funds to pay a “bond” which was required by the court. Bauer also impersonated federal judges and a federal court administrator during the scheme in order to convince the victims that the court proceedings were real, and to persuade victims to continue making payments.

In reality, Bauer had no prospects of receiving money from federal court proceedings; had relatively little wealth; and used the victims’ moneys on credit card payments, hotel bills, restaurants, and other personal expenses.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special Agents from the FBI conducted the investigation. The U.S. Attorney’s Office worked closely with the Kane County Sheriff’s Office and Kane County Attorney’s Office to prosecute the case.

SALT LAKE CITY– After six years of leadership as the United States Attorney for the District of Utah, America’s longest currently serving U.S. Attorney is moving on. John Huber’s last day as the United States Attorney is February 28. Huber was first nominated to the post by President Barack Obama, and was confirmed by the United States Senate in June of 2015. He was later re-nominated by President Donald J. Trump, and unanimously confirmed by the Senate for another four-year term as U.S. Attorney beginning in 2017.

During his time as United States Attorney, Huber served as a close advisor to three Attorneys General and served as the Vice-Chair of the Attorney General’s Advisory Committee for Attorney General Jeffrey Sessions and Attorney General William Barr. Huber also led the Attorney General’s Advisory Subcommittee on Terrorism and National Security and the interagency Domestic Terrorism Executive Committee in Washington D.C.

During his tenure, the cases prosecuted by the U.S. Attorney’s Office in Utah increased in numbers, complexity, and notoriety. Huber transformed the culture of the office while preaching productivity, and oversaw the physical move of the office in downtown Salt Lake City.

On the national security front, Huber oversaw the prosecution of two international terrorists in Utah; many domestic terrorism matters; and a former United States Government employee acting as a spy for China. Huber also spoke regularly on the Department of Justice’s China Initiative in order to educate leaders of Utah industry on the threat posed by China.

On the violent crime front, Huber launched the Utah Gang Initiative within the U.S. Attorney’s Office. Under his leadership, the office has prosecuted several high-profile gang cases, including that of the nationally known white supremacist gangs Soldiers of Aryan Culture and Silent Aryan Nation. In addition, federal prosecutors have led high level prosecutions against the Norteno and the Glen Mob Street Gangs and numerous other gangs along the Wasatch Front with connections to Mexican drug cartels.

Prosecutors in his office successfully prosecuted what was the largest illicit dark web trafficker of fentanyl-laced oxycodone in the United States and obtained a lengthy prison sentence against a Utah doctor who illegally prescribed opioids to drug addicts. Huber also prioritized cases involving child victims and his office brought numerous cases involving the exploitation of minors, including the conviction of an ex-Ute Tribal leader who sexually abused a girl starting at the age of 10.

Huber was also a proponent of using targeted federal, state, and local partnerships to combat violent crime in urban areas. Huber helped to lead a violent crime reduction partnership in Ogden, Utah, that contributed to the decrease in violent crime by as much as 30% and helped to create a similar partnership that is ongoing in Salt Lake City.

Huber also reached out to all of Utah’s rural counties and offered to prosecute criminals that had disproportionate impacts on their communities. One of the most important prosecutions during his tenure was convicting the murderer of Millard County Deputy Sheriff Josie Greathouse-Fox, a case that Huber says “will impact him for the rest of his life.”

On the financial crime front, the United State’s Attorney’s Office took on record-breaking fraud schemes in Utah. Huber’s office played a role in the prosecution of Northern Utah’s Kingston Polygamist Clan, which defrauded the United States out of close to $500 million dollars, as well as the prosecution of Lyle Jeffs and members of the Fundamentalist LDS Church in Southern Utah, who were found to have defrauded the United States’ Supplemental Nutrition Assistance Program. Prosecutors in his office obtained a conviction and a lengthy prison sentence against Rick Koerber, and have now turned their sites on the pending Rust Rare Coin case, a case that prosecutors allege is one of the largest and most destructive frauds Utah has ever seen.

On the civil side, Huber’s office successfully fought to keep snowboarders out of Alta Ski Resort, a decision that still garners mixed reviews amongst snowboarders in Utah. In addition, the office engaged in important civil rights work related to Utah’s public universities;  successfully held doctors and pharmacies accountable in the midst of the opioid epidemic; and engaged in numerous cases related to the misuse of taxpayer funds amidst the global pandemic.

Of all of his accomplishments, Huber is most proud of the fact that he has hired over 50 percent of the office’s nearly 60 prosecutors. This, Huber says, will be his most important legacy, as he will be “extremely proud to see all that they will accomplish on behalf of the United States of America.”

Leaders in the law enforcement community offered accolades regarding U.S. Attorney Huber’s Service.

“For the past six years, John Huber has been a valuable partner and a strong supporter of the FBI and our mission,” said Acting Special Agent in Charge Robert Meacham of the Salt Lake City FBI. “As Utah's U.S. Attorney, Huber had a genuine interest in keeping our communities safe. He never hesitated to devote resources to aggressively investigate and prosecute cases, from gangs and drugs to fraud, and national security threats. He was hard on crime but maintained a personable relationship with those of us in the law enforcement community. All of us at FBI Salt Lake City wish him the best in his future endeavors.”  

United States Marshal for the District of Utah, Matthew Harris stated that “what I respect the most about John, is that he is the same imperturbable man he was nearly two decades ago when I first met him, a dedicated public servant of the highest moral character, who used the ascendancy of his position, not to enrich himself, but to make Utah a safer place for its citizens. Not only was John a friend of federal law enforcement, but he earned the respect of local and state officials by helping remove the most violent criminals from their communities.  He is the epitome of what Americans should expect from their U.S. Attorney. His leadership will be greatly missed.”

Special Agent in Charge of the ATF Denver Field Division David S. Booth stated that “Mr. Huber is a strong advocate for ATF and violence related prosecutions, especially those cases involving the use of firearms. This stance has led to a marked reduction in violent crime in the State of Utah. The collaboration between ATF and the United States Attorney’s Office for the District of Utah under Mr. Huber has led to hundreds of violent criminals being taken off the streets and has made Utah a safer place. John balances this approach with absolute respect for fairness and an unwavering adherence to equal justice under the law. ATF has been proud to partner with Mr. Huber. He is a true defender of the law and a public servant to the people of Utah. He is professional, passionate, knowledgeable, and someone whose vision of serving the people of Utah mirrors ATF’s core mission of fighting violent crime.”

Michael J. Tinkler, Assistant Special Agent in Charge of the Salt Lake City Drug Enforcement Agency stated that “on behalf of the Drug Enforcement Administration,  I would like to thank U.S. Attorney John Huber for his outstanding support and partnership with the Salt Lake City District Office and the Metro Narcotics Task Force. John has been a friend and mentor to many throughout these past six years and will be sorely missed. During his tenure, several significant drug trafficking organizations were disrupted that directly impacted the citizens of this state and nation. His dedication to upholding the rule of law and serving others are tenets that he followed and served as a motivation for others.”

“Homeland Security Investigations is fortunate to have U.S. Attorney John Huber as an advocate and partner in prosecuting criminals in the great state of Utah,” said Steve Andres, Assistant Special Agent in Charge of Homeland Security Investigations in Utah. “His tireless advocacy for justice resulted in several significant outcomes including the successful prosecution of a North Korean state actor seeking sensitive U.S. technology, a life sentence for a major DarkWeb narcotics dealer and ensuring numerous child predators were put behind bars.  We appreciate his dedication to our shared mission of protecting the homeland and will miss his leadership.”

"Change is never easy, especially when that change brings an end to such a great working relationship. U.S. Attorney John Huber has been a great partner to our department, and I have enjoyed working with him. It is obvious he cares about the safety and security of Salt Lake City and the state of Utah,” said Salt Lake City Police Chief Mike Brown.

Huber graduated with honors from The University of Utah, and went on to complete his juris doctor degree at The University of Utah’s S.J. Quinney College of Law. He began his public service in the Weber County Attorney’s Office, and later served as the Chief Prosecutor for West Valley City before joining the U.S. Attorney’s Office. Huber first served joined the U.S. Attorney’s Office as a Special Assistant United States Attorney and rose within the office to become the Executive Assistant United States Attorney until his appointment as the United States Attorney. His resignation ends a chapter of 27 years of continuous public service.

SALT LAKE CITY- The United States Attorney’s Office mourns the loss of retired Unified Police Department Officer Hugh B. Bennett, after his courageous battle with Covid-19.  Hugh was a loving husband to our United States Attorney’s Office Victim-Witness Coordinator, Candy Bennett, and had a distinguished 26-year career in law enforcement with the Unified Police Department and the Salt Lake County Sheriff’s Office.

Upon his retirement from local law enforcement, Hugh became a Federal Court Security Officer, where every member of the United States Attorney’s Office had the privilege of interacting with him on a daily basis.

“Hugh Bennett was a gentleman who had a long and distinguished career in law enforcement,” said United States Attorney John W. Huber.  “We extend our deepest sympathies to Candy Bennett, the Unified Police Department, the United States Courthouse and Hugh’s entire family. We will always remember him.”

ST. GEORGE, UTAH – Richard Dimitri Barraza, 24, of St. George, Utah, has agreed to serve 150 months in federal prison after pleading guilty to possessing heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking crime.

According to the plea agreement, Barraza admitted to possessing approximately 160 grams of a mixture or substance containing heroin, along with a 9mm pistol that he used to further his heroin trafficking enterprise. Because Barraza was on supervised release for a 2017 federal conviction for being a felon in possession of a firearm, this plea also resolves the outstanding supervised release violation pending against him.

“Southwest Utah needs federal law enforcement because of cases like this one,” said United States Attorney John W. Huber. “We are committed to focusing on dangerous offenders who drag down our quality of life through reckless decisions.”

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Agents from the Washington County Drug Task Force, Officers from the St. George Police Department, and Special Agents from the DEA conducted the investigation.  The U.S. Attorney’s Office coordinated the prosecution with the Washington County Attorney’s Office.

SALT LAKE CITY – Craig C. Garrick, Jr., 42, of Alpine, Utah, was ordered to serve 12 months and one day in federal prison at a hearing on February 10, after being convicted of securities fraud in federal court. Garrick previously pleaded guilty to securities fraud in October of 2020.

Garrick admitted in the plea agreement, that from 2019 to 2020, he induced victims to invest at least $450,000 in his company without disclosing the fact that he was serving a probationary sentence for felony charges of mortgage fraud arising out of the Utah State Courts. Garrick also admitted that that he planned to use, and did use, investment money for his own benefit and living expenses; that he knew it was illegal to fraudulently take money from investors; to make a misrepresentation or an omission of a material; and to engage in conduct that operates as a fraud or deceit upon a person, in connection with the purchase or sale of securities.

Garrick was sentenced Wednesday by District Court Judge Dale Kimball, who ordered $450,000 in restitution to the victims but noted Garrick had already arranged for the victims to be repaid prior to sentencing.

“It is all too common for fraudsters to claim they are raising money for a business venture, when in reality, they are lining their pockets with the hard-earned savings of Utahns,” said United States Attorney John W. Huber. “Unfortunately, con artists excel at preying on the trusting nature of Utahns. Remember that talk is cheap, and it is of the utmost importance that investors in Utah do their due diligence before investing their hard-earned money with anyone.”

“Fortunately, Mr. Garrick’s victims were able to recoup their money, but that’s not often the case.  Investment fraud victims are usually left financially and emotionally devastated,” said Acting Special Agent in Charge Robert Meacham of the Salt Lake City FBI. “The FBI is committed to holding people accountable for financial crimes.  As fraudsters are known to re-offend, we also encourage the public to do their due diligence when looking to invest and report any suspicious activity to the FBI."

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special agents of the FBI conducted the investigation.

One month ago, Mayor Mendenhall of Salt Lake City, Chief Mike Brown of the Salt Lake City Police Department and Commissioner Jess Anderson of the Utah Department of Public Safety joined members of the Utah federal law enforcement community, including United States Marshal Matthew Harris and United States Attorney John Huber, to announce a strategic partnership to reduce violent crime in Salt Lake City.

Since that time, the partnerships gained have been central to the success of this strategic initiative. Leaders from every federal law enforcement agency in Utah with a mission to combat violent crime have joined the partnership, including the Bureau of Alcohol Tobacco and Firearms, the Drug Enforcement Agency, the FBI, Homeland Security Investigations, and the United States Marshals Service. The partnership has also gained valuable partners in the Utah State Bureau of Investigation, the Unified Police Department, the Salt Lake County Sheriff’s Office, and the Salt Lake County District Attorney’s Office.

Since the beginning of January, this partnership has resulted in 24 defendants who present a threat to the safety to the citizens of Salt Lake City being charged or convicted in federal court. Of these 24 defendants, 16 illegally possessed firearms, and nine of the firearms involved in these cases were reported stolen; nine are currently on probation or parole for other offenses; eight have been charged with federal drug trafficking violations; seven are affiliated with a street gang; and five have a previous or current domestic violence charge; the narcotics seized includes heroin, methamphetamine, cocaine, and crack cocaine.

Examples of cases that have come from the partnership include Jordan Gonzales, 27, of Salt Lake City, who was allegedly involved in a drive-by shooting on January 20 in Salt Lake City. Gonzales was charged in federal court with one count of illegally possessing a firearm within a day of his arrest thanks to the ATF. The federal complaint filed by the United States alleges that Gonzales is a Norteno gang member who was the driver of a car involved in a drive-by shooting who fled from the police during a pursuit. After his vehicle became inoperable, it is alleged that Gonzales exited the driver’s side door, began to flee on foot, and removed a firearm from his waistband while an officer was within 5-10 feet of him. Due to the efforts of the SLCPD, the firearm was recovered, and Gonzales was apprehended after the deployment of a K9 officer. Gonzales’ case is currently pending in United States District Court.

Brian Keith Stack, 60, of Salt Lake City, is currently under indictment in federal court for allegedly enticing a minor to engage in sexual activity in Salt Lake City. Stack was charged by a federal grand jury with two counts related to the enticement of a minor and the attempted production of child pornography. This case was investigated by the SLCPD and brought to federal court due to the enhanced partnership with the United States Attorney’s Office.

Artemio Rivera-Luna, 34, of West Valley City, has been charged with three counts related to the distribution of multiple pounds of heroin and methamphetamine, along with the illegal possession of nine firearms. Due to the partnership with HSI and SBI, Rivera-Luna was charged in federal court on January 20 for conduct that occurred in Salt Lake City, and his case is currently pending.

Kirk Madsen, 41, of Granstsville, has been federally indicted for the possession of illegal firearms. Madsen allegedly opened fire with a large capacity automatic rifle outside of a Salt Lake City apartment complex during a domestic violence related incident. According to court documents, he admitted to emptying an entire 30 round rifle magazine during the incident. Because of the close partnership between the FBI, SLCPD, and the USAO, Madsen was arrested and indicted on federal charges on February 3.

“We mean what we say,” said United States Attorney John W. Huber. “As partners, we are serious in our commitment to aggressively pursue justice in Utah’s capital. Our goal is to make Salt Lake City a safer place, and after one month of targeted work, we are off to a promising start.”

“It’s our job to ensure residents, businesses, and visitors are safe in Salt Lake City and I am encouraged by the early outcomes of this partnership,” Salt Lake City Mayor Erin Mendenhall said. “These apprehensions are an important step in making a difference for our community and reducing our crime rates.”

“While we expected to see some early success, the results so far have exceeded our expectations. Keeping these offenders off the street not only helps bring justice to their victims, but also keeps others from becoming victims,” said Salt Lake City Police Chief Mike Brown. “The success of our partnerships will ultimately be measured in our ability to keep our community safe by limiting the opportunity for criminals to pray on our neighbors, and this is a great start.”

"The Utah Department of Public Safety, State Bureau of Investigation is committed to removing those who victimize our communities,” said DPS Commissioner Jess Anderson. “We are excited to be part of an extensive and ongoing crime reduction effort in Salt Lake City. We appreciate the great partnerships and are thrilled to see the early success of this project."

"The FBI plays a key role in combatting violent crime, focusing on issues that pose major threats to our society," said Acting Special Agent in Charge Robert Meacham of the Salt Lake City FBI. "No community is untouched, which is why a concerted effort is necessary to fight this issue.  Partnerships pool together the best of what law enforcement agencies have to offer.  When we share resources, intelligence, and skills, it allows us to remain focused on one goal - keeping our communities safe."

“ATF’s success in fighting violent crime has always been a direct result of our strong partnerships with the Salt Lake City Police Department, the State of Utah, our local law enforcement partners, and the U.S. Attorney’s Office,” said ATF Denver Field Division Special Agent in Charge David S. Booth. “With the combined dedication and skill of our Federal partners, I am confident we will have even greater success in the future and ensure that our communities stay safe.”                                         

“HSI routinely leverages its investigative authority and expertise in partnership with federal, state and local law enforcement colleagues to address violent crime,” said HSI Assistant Special Agent in Charge Steve Andres.  “We bring the ability to fight local crime and elevate it to a national or even international level as criminal networks are uncovered,” said Andres.  “Our partnerships act as a force multiplier to keep our community safe.”

Indictments are not findings of guilt.  Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

SALT LAKE CITY – Deland Cornpeach, 20, of the Shoshone-Bannock Indian Tribe, pleaded guilty to one count of voluntary manslaughter and one count of assault on a federal officer in federal court on February 1, 2021.  As a part of the plea agreement, Cornpeach has agreed to serve 84 months in federal prison. 

In the plea agreement, Cornpeach admitted to stabbing the victim, E.P., an enrolled member of the Ute Indian Tribe, to death with a knife on the Uintah and Ouray Indian Reservation on June 20, 2017.  The assault on a federal officer charge stems from an incident at the Davis County Jail, where Cornpeach was detained on the federal manslaughter case.  While at the jail, Cornpeach assaulted and inflicted injury upon two Davis County Sheriff’s Deputies who where engaged in the performance of their official duties on behalf of the federal government.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case.  Special Agents of the FBI conducted the investigation with assistance from officers of the Bureau of Indian Affairs. 

Salt Lake City- Dr. Nicholas (“Nick”) Carl Greenwood, 43, of Salt Lake City, Utah, pleaded guilty to one felony count of distributing a schedule III narcotic for a non-legitimate medical purpose outside of the standards of medical practice. In addition, Greenwood entered into a consent agreement in order to resolve a civil complaint related to his unlawful practice of prescribing controlled substances from his Murray, Utah, office.

In the criminal case, Greenwood pleaded guilty to one felony count of distribution of a controlled substance in a Utah federal court. In the plea agreement, Greenwood admitted that he intentionally prescribed and distributed Buprenorphine, a schedule III controlled substance, to a purported patient knowing the prescription was for a non-legitimate medical purpose and was outside of the standards of medical practice. Greenwood was ordered to serve 24 months of probation and to pay a $500 fine.

In the civil case against Greenwood, a federal court in Utah entered a consent judgment and permanent injunction ordering Greenwood to permanently cease dispensing opioids or other controlled substances and to pay $500,000 in civil penalties. Under the court’s order, Greenwood will also surrender his registration with the DEA and will never seek renewal. The consent order resolves a complaint filed by the United States alleging that Greenwood repeatedly wrote prescriptions for opioids and other controlled substances in violation of the Controlled Substances Act. 

In the complaint, the United States alleged that several confidential sources who were working for the DEA obtained prescriptions for Buprenorphine by simply asking Greenwood for them. The confidential sources received dozens of prescriptions for hundreds of pills without ever receiving any medical treatment. In most cases, the confidential sources paid cash for prescriptions they picked up from Greenwood’s office staff that were pre-written and signed. In the few times Greenwood did see the confidential sources, he offered no treatment, allowed the confidential sources to bargain for prescriptions, and coached the confidential sources on how to trade and sell the powerful opioids he prescribed them. The complaint further alleged that Greenwood followed this same pattern with other customers, and wrote prescriptions for dangerous combinations and for doses far in excess of those needed for proper treatment, while ignoring urinalysis tests and writing prescriptions for a form of medication more susceptible to abuse. 

“Healthcare professionals should be looked upon as heroes. Unfortunately, in this matter the physician abused his position of trust, and cast a shadow on the profession,” said United States Attorney John W. Huber. “The addiction epidemic continues to cause despair in American homes and communities. In partnership with the DEA, we will bring accountability to those who exploit the vulnerable. 

“This investigation highlights the cooperative efforts between the U.S. Attorney’s Office and members of the DEA Salt Lake City District Office in combatting the illegal distribution of controlled substances in Utah, said DEA Assistant Special Agent in Charge Michael J. Tinkler. The DEA is committed to ensuring that those individuals prescribing regulated medications do so in a safe and legal manner.”

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the civil and criminal cases against Dr. Greenwood. Special agents and Diversion Investigators from the DEA conducted the investigation. 

SALT LAKE CITY – Daniel Kevin Richards, 37, of Sandy, Utah, pleaded guilty to receiving misbranded chloroquine from China with the intent to sell the drug in the United States. In the plea agreement, Richards admitted that, in April of 2020, he imported and received over 50 kilograms of misbranded and mislabeled chloroquine from China. Richards admitted that the chloroquine was falsely mislabeled as “Boswellia Serrata Extract” and that the drug was not manufactured and prepared by an establishment registered as a drug manufacturer with the Food and Drug Administration. Additionally, the labeling on the drugs failed to bear adequate directions for use as required by federal law. At sentencing, Richards faces a maximum possible sentence of up to a year in prison and a $100,000 fine. Richards has also agreed to pay for the destruction of the drug by the proper authorities at the conclusion of the case.

“This office, with our partners at the FDA and FBI, pursued every meaningful investigative lead in this matter, and fully examined the facts and circumstances surrounding this federal offense,” said United States Attorney John W. Huber. “This is the just outcome of that thorough investigation, and it will conclude our review.”

“The FDA continues to proactively identify and neutralize threats to consumers, particularly those related to COVID-19.  Proffering the sale of misbranded prescription drugs of unknown origin puts consumers’ health at risk,” said Special Agent in Charge Charles L. Grinstead, FDA Office of Criminal Investigations Kansas City Field Office. “We will continue to investigate and bring to justice those who intend to exploit consumers’ fears during the pandemic with potentially dangerous drugs.” 

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special Agents of the Food and Drug Administration- Office of Criminal Investigations, the FBI, and investigators from the Salt Lake County District Attorney’s Office conducted the investigation. 

SALT LAKE CITY – Patrick George Jackson, 60, of North Salt Lake, Utah, will serve 10 years in federal prison followed by 84 months of supervised release after pleading guilty to possession of child pornography in federal court. In the plea agreement, Jackson admitted that in May of 2019, he possessed over 600 images of child pornography on his electronic devices. Jackson also admitted that he had been previously convicted twice of sexual offenses Utah, including a 1990 conviction for Sexual Abuse of a Child, and a 2002 conviction for Attempted Forcible Sexual Abuse. After his release from federal prison, Jackson will be required to register as a sex offender under the Sex Offender Registration and Notification Act.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special Agents of the FBI conducted the investigation. 

WASHINGTON – Vivint Smart Home Inc. (Vivint), based in Provo, Utah, has agreed to pay the United States $3.2 million to resolve allegations under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) that Vivint employees made false statements to secure financing for customers’ purchases of Vivint’s home monitoring products, the Justice Department announced today.  FIRREA imposes civil penalties on any person or entity that violates certain predicate federal statutes.

Vivint is a provider of smart home monitoring services and frequently obtains new customers through door-to-door sales by Vivint sales representatives.  The United States contended that, from 2017 to 2020, certain Vivint sales representatives used their personal funds to cover the cost of initial financing payments on behalf of Vivint customers who sought financing to purchase Vivint’s products, while making false and misleading statements to the federally insured financial institution providing the financing that made it appear as if the borrowers had funded the initial payments. 

“Making false statements about the creditworthiness of borrowers undermines the integrity of our banking system and puts at risk the taxpayer dollars that help to support it,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division.  “We will pursue those who fail to provide truthful information needed by federally insured financial institutions to make appropriate lending decisions.”

“American business should be based on truthful disclosures, and false and misleading statements should never be part of dealings with federally insured financial institutions,” said U.S. Attorney John W. Huber for the District of Utah.  “This resolution should send a strong message to corporations that using fraudulent tactics to secure consumer sales will not be tolerated.”

The allegations resolved by the settlement were initially provided to the United States in a declaration submitted under the Financial Institutions Anti-Fraud Enforcement Act, which provides for rewards to eligible declarants who provide information about potential FIRREA violations.  The declarant’s share of the recovery in this matter has not yet been determined.

This matter was investigated by the U.S. Attorney’s Office for the District of Utah and the Civil Division’s Commercial Litigation Branch (Fraud Section).  Investigative assistance was provided by the FBI.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.  

SALT LAKE CITY – Thomas Robbins, 65, of Heber City, Utah, will serve 60 months in federal prison after pleading guilty to securities fraud and money laundering in July. As a part of his plea agreement, Robbins admitted he induced victims to invest more than $10 million in a fraudulent foreign currency day-trading business beginning in 2016 and ending in early 2020. Robbins was sentenced Wednesday. 

According to the plea agreement, as a part of his efforts to lull investors into a false sense of security about their investments, Robbins told investors he had achieved high returns in his foreign day-trading business. In fact, Robbins lost millions of dollars and diverted investor money for his personal use and benefit. He solicited approximately 66 investors to invest around $10,170,700.69 in his scheme.

Robbins admitted that he made several fraudulent representations in his communication with investors in the scheme. These representations included telling investors that he had spent 11 years developing an algorithm for foreign currency trading which allowed him to average returns of 5 percent to 30 percent per month, that he had previously worked for a German bank where he was on contract to help the bank develop algorithms for their traders to use, that he used more than 13 different brokerage firms in different countries to facilitate his foreign currency trading program, that he assured investors that his trading program was compliant with the laws of the Commodities Futures Trading Commission, and that people who invested with him would never lose more than 5 percent of the net equity in their trading account due to “stop loss” measures.

Robbins also admitted in the plea agreement that he made these false representations knowing he was not providing a legitimate investment, that he had lost nearly all of the investor money, and that he was using a portion of the investor money on personal living expenses and no significant investment returns were ever generated.

“Thomas Robbins is a classic example of a Utah fraudster. He is a repeat offender who bilks trusting investors out of their hard earned savings while exploiting their trusting nature,” said United States Attorney John W. Huber. “Like-minded swindlers should take note that they are on the radar screen, and we will hold them accountable. For Utah investors, we strongly encourage healthy skepticism and due diligence before parting with your money.”

“We hope this latest sentence will finally send a message to Thomas Robbins and others like him that fraud doesn’t pay,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI Office.  “Financial crimes are not victimless. A scam can devastate innocent people whose life savings are usually never recovered.  The FBI and our partners will never turn a blind eye to those who deceive and betray people’s trust out of greed.” 

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special agents of the FBI and IRS-Criminal Investigation conducted the investigation. 

SALT LAKE CITY –  Kent Crump, 54, of Heber City, Utah, will serve 18 months in federal prison followed by 36 months of supervised release after pleading guilty to wire fraud in federal court. In the plea agreement, Crump admitted that while he was working as the comptroller for Park City Dry Cleaning and Linen Corporation, that he defrauded the business out of $672,081 between 2012 and 2018. Crump admitted that he carried out the fraud by stealing a large portion of the cash receipts received by the business’ various retail locations each day, and depositing the cash in his and his wife’s personal bank accounts. Crump used the proceeds of this scheme to purchase a non-financed home in his wife’s name, and prosecutors were able to forfeit the proceeds from the sale of the home on behalf of Park City Dry Cleaning and Linen as a part of the prosecution. Crump has also been ordered to pay $217,289 to the victims, which represents the remainder of the amount taken from the business during his scheme.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special agents of the FBI conducted the investigation. 

SALT LAKE CITY – A federal grand jury returned an indictment Wednesday afternoon charging an Ogden, Utah, business owner, who owned and operated four healthcare related limited liability companies, with 27 counts of failing to pay over trust fund taxes totaling $146,856 to the IRS, between 2014 and 2016.

 According to the indictment, Daniel Fry, who owned and operated four limited liability companies, including Burch Creek Homecare and Hospice LLC, Medical Billing Advantage LLC, Scrub World, and Country Niche LLC, caused trust fund taxes to be withheld from the wages paid to the employees of each of these businesses, and that Fry failed to pay over to the IRS all of the taxes owing to the United States on behalf of the employees of these businesses.

The indictment alleges that employers are required to withhold, account for, and pay over to the IRS, a variety of taxes from employee wages, including federal income taxes and FICA taxes- which include Medicare and Social Security taxes. These taxes are referred to as “trust fund taxes” because employers are required to hold them in trust for their employees and pay them over to the IRS. 

 Fry faces up to five years in federal prison if convicted of failure to pay over trust fund taxes. The case is being investigated by IRS Criminal Investigation.

Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty beyond a reasonable doubt in a court of law.

A summons has been issued for Fry to appear in federal court. This case is being prosecuted by the U.S. Attorney’s Office in Utah.

SALT LAKE CITY – Project Safe Childhood, a unified and comprehensive strategy to combat child sexual exploitation, continues to operate at full speed in Utah.  Initiated in May 2006, Project Safe Childhood (PSC) in Utah continues to bring together statewide law enforcement partners to investigate and prosecute cases and raise the level of public awareness and accountability of sexual predators in our communities.

“We have very serious problems with child sexual exploitation in Utah. Fortunately, a strong team of experienced prosecutors and investigators remain committed to protecting child victims and holding perpetrators accountable,” U.S. Attorney John W. Huber said today.

“While the pandemic has exacerbated the challenges in protecting children, there has been no slowdown in our efforts. Our investigations and prosecutions of new exploitation cases continue to move forward with determination,” Huber said.

Huber said that as a result of the pandemic, prosecutors have also been engaged in opposing the early release of PSC defendants, who are serving lengthy federal prison sentences based upon egregious offense conduct.  These compassionate release motions, if granted, could result in significant reductions in the sentences imposed in the case.

Over the last several years, the U.S. Attorney’s Office in Utah has prosecuted approximately 55 cases a year involving the production, possession, and distribution of child pornography and coercion and enticement of minors in Utah. These cases result from investigations conducted by members of the FBI’s Child Exploitation and Human Trafficking Task Force.  This task force was formed in June 2016 to ensure a rapid, effective response to federal crimes against children and the victimization of children by online predators. These investigations, including chat operations conducted by the task force, account for the majority of cases charged by the U.S. Attorney’s Office.  The U.S. Attorney’s Office also takes cases referred by the Utah Internet Crimes Against Children Task Force. 

“Sadly, when it comes to the sexual exploitation and sex trafficking of children, there's never a shortage of work for our special agents and partners.  The FBI's Child Exploitation and Human Trafficking Task Force in Utah, Idaho, and Montana receives and responds to hundreds of cases each year.  As more kids are spending time online, the case load is even greater right now,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI.  “Parents and guardians need to keep a close eye on their kids’ online activities because any child, no matter the age or demographic, can be a victim.  Keeping our children safe will always be a top priority for the FBI and our task force."

Members of the task force include Adult Probation and Parole, Clearfield, Layton, Lehi, Park City, Roy, Salt Lake City, Syracuse, and Tooele police departments, the Davis County Sheriff’s Office, the Davis County Attorney’s Office, the Salt Lake District Attorney’s Office, the Weber County Sheriff’s Office, the Weber County Attorney’s Office, the Utah Department of Public Safety, the Dixie State University Police Department, and the U.S. Department of Homeland Security. 

State and federal prosecutors routinely coordinate on prosecutions when cases are referred by agents or law enforcement officers.  Generally, state prosecutors handle the hands-on sexual abuse portion of the investigation while the U.S. Attorney’s Office in Utah undertakes the prosecution of any connected production, distribution and possession of child pornography or enticement of a minor. This coordination is effective because federal sentencing guidelines allow for enhanced sentences of repeat sex offenders and prosecutors can seek imposition of lifetime supervision of a defendant once they finish their prison sentence. 

PRODUCTION OF CHILD PORNOGRAPHY:

2016:   United States vs. Lyman Dale Black

Black was sentenced to 300 months in prison, followed by lifetime supervised release, after pleading guilty to one count of production of child pornography and one count of distribution of child pornography. Black traded child sexual abuse material and through live stream chats Black sexually abused his 14-month-old victim. Black was also convicted in state court for the sexual abuse of the victim. This case is an example of the coordinated efforts with our state partners in holding offenders accountable for all conduct involved in the exploitation of children in our community. This case was prosecuted by the U.S. Attorney’s Office in St. George.

2017:   United States vs. Geoffrey James Cheney

Cheney was sentenced to 300 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Cheney sexually abused an infant child and then distributed images of the sexual abuse to law enforcement during an undercover online operation.

2018:   United States vs. Nathan Ward

Ward was sentenced to 262 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Ward, an obstetrician-gynecologist, live streamed the sexual abuse of his victim, who was between 12 and 14-years-old, with another sex offender, Robert Edwin Francis, who was also identified and convicted in federal court. Ward was also convicted for the sexual abuse of the same victim in state court. This case is an excellent example of the close working relationship the U.S. Attorney’s Office has with our state prosecuting agencies. A prosecutor in the Davis County Attorney’s Office, cross-designated as a Special Assistant U.S. Attorney, played a significant role in this case.

2019:   United States vs. Dennis Andreasen

Andreasen was sentenced to 180 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Andreasen recorded the sexual abuse he perpetrated on his 6-year-old victim. This case is an example of our coordinated efforts with state prosecuting agencies. Andreasen was also convicted of the sexual abuse in state court.

2020:   United States vs. Eduardo Ponce: 

Ponce was sentenced to 300 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Ponce recorded the sexual abuse of his victim. Ponce was also convicted of the sexual abuse in state court where he was sentenced to an indeterminate sentence of 25 years to life.

2020:   United States vs. Michael Travers

Travers was sentenced to 210 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Travers, a long haul truck driver from Mississippi, participated in the production of sexually explicit images of an 8-year-old child.

POSSESSION OF CHILD PORNOGRAPHY: 

2017:   United States vs. Donald Ray Fritcher

Fritcher was sentenced to 330 months in prison, followed by lifetime supervised release, after pleading guilty to distribution of child pornography.  Fritcher, a previously twice convicted sex offender, distributed child sexual abuse material that included images and videos of Fritcher sexually abusing two minor girls. This investigation was a coordinated effort with Homeland Security Investigations and the Royal Canadian Mounted Police.

2018:   United States vs. Jason David Lott

Lott was sentenced to 132 months in prison, followed by 240 months of supervised release, after pleading guilty to possession of child pornography. Lott, who had two previous sex offender convictions, was found to be in possession of child sexual abuse material of infants, toddlers, and prepubescent children.

2020:   United States vs. Aaron Scott Smith

Smith was sentenced to 120 months imprisonment, followed by lifetime supervised release, after pleading guilty to possession of child pornography. Smith, a prior convicted sex offender, possessed child sexual abuse material.

COERCION AND ENTICEMENT OF A MINOR:

2018:   United States vs. Christopher Lambert

Lambert was sentenced to 80 months in prison, followed by 120 months of supervised release, after pleading guilty to travel with the intent to engage in illicit sexual conduct. Lambert traveled from New Mexico to Utah to meet a 15-year-old female he met online with the intent to engage in sexual activity. He then transported the female minor back to New Mexico where Lambert engaged in illegal sexual activity with her.

2018:   United States vs. Skyler Mark Hansen

Hansen was sentenced to 150 months imprisonment, followed by 120 months of supervised released, after pleading guilty to sex trafficking of a minor. Hansen, a long haul truck driver, admitted that over a two-year period, he coerced a minor to engage in sexual acts with him in exchange for money.

2019:   United States vs. Sean Timothy O’Neill

O’Neill was sentenced to 120 months in prison, followed by 240 months supervised release, after pleading guilty to attempted enticement of a minor and possession of child pornography. O’Neill, via Facebook, attempted to entice a minor under the age of 18 to engage in illegal sexual activity. O’Neill moved from Michigan to Utah and continued in his efforts to persuade the minor to engage in illegal sexual activity. O’Neill was also found to be in possession of child sexual abuse material during the course of this investigation. This case was prosecuted in federal court in St. George.

2020:   United States v. Lyle Reveral Leifson

Leifson was sentenced to 120 months in prison, followed by lifetime supervised release, after pleading guilty to attempted coercion and enticement of a minor. Leifson, a prior convicted sex offender, arranged to meet with someone he believed was a 13-year-old minor to engage in illegal sexual activity. This is an example of the proactive efforts of law enforcement in undercover online operations in our communities.

COMPASSIONATE RELEASE CASES  

United States vs. John Dennis Bowen

Bowen was sentenced to 120 months in prison, followed by 180 months supervised release, in February 2020 after pleading guilty to possession of child pornography. Bowen possessed a large amount of child pornography, distributed child pornography on his YouTube account, and live streamed a video feed of female children being sexually assaulted by adult men. U.S. District Judge Richard Shelby denied relief because Bowen had not demonstrated the existence of extraordinary and compelling reasons despite Bowen claiming he had several underlying medical conditions that put him at risk if infected with COVID-19. However, even if Bowen had demonstrated the existence of extraordinary and compelling reasons, Judge Shelby found that Bowen was a danger to the community based upon the conduct in this case and his criminal history, which included prior sexual abuse convictions.

United States vs. Aaron Elliott

Elliott was sentenced to 72 months in prison, followed by 60 months supervised release, in 2015 after pleading guilty to sex trafficking of children. Elliott advertised and arranged for a female minor to engage in commercial sex acts with clients of his escort service in exchange for money. Elliott sought relief claiming he had serious health conditions that put him at risk if infected with COVID-19. Judge David Nuffer found that Elliott had failed to demonstrate that his circumstances constituted extraordinary and compelling reasons to justify compassionate release. In addition, U.S. District Judge Nuffer found that the conduct of the offense and Elliott’s criminal history also did not support granting the relief.

United States vs. Darin Fronk Clark

Clark was sentenced to 180 months in prison, followed by 120 months of supervised release, in 2013 after pleading guilty to Production of Child Pornography. Clark induced his victim into engaging in sexually explicit conduct for the purpose of producing sexually explicit material. Although Clark claimed to suffer from several chronic medical conditions that put him at risk if infected with COVID-19, the medical conditions did not constitute extraordinary and compelling reasons to warrant relief. In addition, relief was denied because Clark was found to be a danger to the community if released.

United States vs. Chad Ryan Huntsman

Huntsman was sentenced to 270 months in prison, followed by lifetime supervised release, in 2016 after pleading guilty to production of child pornography. Although Huntsman sought release based on his health condition and the COVID-19 pandemic, Judge Ted Stewart found that Huntsman had not exhausted all of his administrative remedies. However, even if Huntsman had exhausted his administrative remedies, Judge Stewart found that Huntsman was a danger to the community and he would not be released.

SALT LAKE CITY – The U.S. Department of Justice is recognizing the leadership success of Ogden Police Chief Randy Watt in the city’s Project Safe Neighborhoods (PSN) Target Enforcement Area. Each year, the Department of Justice recognizes outstanding efforts to restore safety in communities through annual PSN Achievement Awards.

U.S. Attorney John W. Huber presented the Outstanding Individual Contribution to the PSN Program award to Chief Watt Tuesday in Ogden.  PSN is a critical piece of the Department’s crime reduction efforts.  Generally, the awards are presented at a national ceremony.  However, with the pandemic, local presentations are being done this year.

The U.S. Attorney’s Office in Utah has been one of the highest performing offices in the PSN initiative for almost 20 years, using the initiative goals to reduce violent crime in Utah communities. PSN, which fosters using local solutions to solve local problems, focuses investigation and prosecution resources on those individuals who most significantly drive violence in our communities.  It also promotes partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct. For example, 255 cases PSN cases were filed by federal prosecutors in 2018; 215 in 2019, and, as of November, 169 in 2020.  

The U.S. Attorney’s Office nominated Chief Watt for the award in recognition of his decades of leadership in law enforcement and his efforts to lead a PSN targeted enforcement effort in Ogden, partnering with federal law enforcement agencies.

Chief Watt was the architect of a program to develop a Targeted Enforcement Area (TEA) in Ogden.  He selected a 4.86 square mile area, located primarily within Ogden, for enhanced targeted enforcement.  The TEA initiative started in April 2018 with support from DOJ PSN grants.  Partners adopted a zero tolerance position for anyone committing firearms or narcotics violations in the targeted area. Offenders are screened for federal or state prosecution as a part of a coordinated prosecution strategy.  The federal cases are often prosecuted by Weber County Attorneys cross-designated as Assistant U.S. Attorneys. This partnership and geographic surge of resources has resulted in a significant reduction in Type 1 crimes.

“Chief Watt deserves this high honor for his efforts in the Target Enforcement Area.  His forward thinking leadership in defining and targeting a specific area, combined with his willingness to partner with the PSN program and federal law enforcement, has made the TEA the success is.  His success in crime suppression and prevention has made Ogden a model for other cities to use in addressing violent crime issues,” Huber said today.

As a part of the Ogden TEA initiative, 181 firearms have been seized.   The firearms include one grenade launcher, 128 pistols, 15 revolvers, 23 rifles, and 14 shotguns. These are firearms no longer in the hands of criminals in the community.

Huber said prosecutors have even heard from offenders, arrested as a part of the initiative, promoting a crime-prevention mantra:  Don’t get caught in the Box. 

SALT LAKE CITY, UT – U.S. Attorney John Huber announced today that Chiropractor Matthew Wood and his practice, Life Health Medical Center (“LHMC”), have agreed to pay $175,000 to resolve liability under the False Claims Act for allegations he improperly billed Medicare for the use of electro-acupuncture devices.

From November 3, 2018 through February 28, 2020, Dr. Wood and LHMC billed Medicare for an implantable neurostimulator device, a device that typically requires a surgical procedure and is performed by a surgeon in an operating room.

STIVAX® is a percutaneous auricular electro-acupuncture device. Pursuant to the manufacturer’s instructions, the device is affixed behind a patient’s ear using an adhesive.  Needles are inserted into the patient’s ear and affixed using another adhesive. Once activated, the device then provides intermittent stimulation by electrical pulses. It is a single-use, battery-powered device designed to be worn for approximately four days until its battery runs out, at which time the device is thrown away.  Other brand names for this device include NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.

Medicare does not reimburse for electro-acupuncture devices as implantable neurostimulators nor acupuncture.

LHMC also agreed to enter into an Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services that will require regular monitoring of its billing practices for a period of three years.

"Health care professionals who inappropriately bill Medicare do so at a disservice to this vital program,” said Special Agent in Charge Curt L. Muller, U.S. Department of Health and Human Services Office of Inspector General.  "Working with our law enforcement partners, we will continue to protect taxpayer-funded health care programs as well as the patients who rely on them."

This settlement agreement is one of many of its kind involving electro-acupuncture billing that U.S. Attorneys’ Offices across the United States have worked diligently to resolve.

The settled civil claims are allegations only. There has been no determination of civil liability. This case was investigated by the Office of Inspector General of the U.S. Department of Health and Human Services. Assistant U.S. Attorney Sandra L. Steinvoort, Chief of the Affirmative Civil Enforcement section in the Utah U.S. Attorney’s Office, handled the matter. 

SALT LAKE CITY – A Utah pharmacy is accused of dispensing thousands of highly addictive controlled substances in violation of the Controlled Substances Act (CSA) in a newly filed federal lawsuit, U.S. Attorney John W. Huber announced today. The complaint was filed Friday in U.S. District Court in Salt Lake City.

Ridley’s Family Markets, Inc., a corporate-owned supermarket and pharmacy chain, is accused of failing to recognize “red flags” of improper and illegitimate prescriptions. Ridley’s operates 31 grocery stores and two stand-alone pharmacies in Utah, Idaho, Wyoming, Colorado, and Nevada.

A pharmacy owned by Ridley’s in Morgan, Utah, became the subject of a DEA investigation after it was discovered that Ridley’s filled 160 forged and fraudulent prescriptions for two of its regular customers. The United States alleges in its complaint that the customers’ actions were so obviously fraudulent that any reasonable pharmacist would have prevented the illegal diversion of dangerous opioids and other controlled substances by properly following the provisions set forth by the CSA. 

The Morgan location is the second pharmacy owned by Ridley’s to be accused of this conduct. A Ridley’s pharmacy located in Casper, Wyoming, is also alleged to have filled more than 200 illegitimate prescriptions written by a now convicted pill-pushing doctor.

The actions sought in this complaint are part of the ongoing efforts made by the U.S. Attorney’s Office in Utah and its federal law enforcement partners to combat the opioid crisis through criminal prosecutions and civil actions. 

The lawsuit alleges Ridley’s shirked its responsibility as the “last line of defense between powerful controlled substances with high potential for abuse and the people seeking them.”  In addition to overlooking obviously altered paper prescriptions, Ridley’s turned a blind eye to numerous “red flag” warnings of drug abuse and diversion, including: 1) filling prescriptions not within the scope of the prescriber’s practice; 2) unusual levels of cash sales; 3) prescriptions for the same drugs in multiple strengths; 4) prescriptions for daily doses higher than medically necessary; 5) similar or duplicate prescriptions written for more than one family member residing at the same address; and 6) prescriptions for drug combinations well-known in the medical and pharmacy community as carrying a high risk for drug abuse, the lawsuit alleges. 

The lawsuit alleges that Ridley’s employees not only failed to comply with CSA protocol, they failed to follow their own minimal safeguards. Following this protocol would have prevented the diversion of thousands of dangerous opioids.

Dispensing drugs in violation of the CSA carries a civil penalty of up to $67,627 per violation. The complaint alleges “hundreds” of violations by Ridley’s with just these two customers. In addition to civil penalties, the United States seeks injunctive relief to restrain Ridley’s violations of the CSA. 

The claims asserted against the defendants are allegations only and there has been no determination of liability. 

SALT LAKE CITY – Theodore Lamont Hansen, age 50, of Highland, Utah, who pleaded guilty to money laundering and bank fraud in May in connection with a financial fraud scheme, will serve 48 months in federal prison.  U.S. District Judge Robert L. Shelby imposed the sentence Thursday afternoon in U.S. District Court.

Hansen was ordered to pay $1,435,913.44 in restitution as a part of the sentence.

“Another Utah fraudster has come to justice in federal court. In this case, a repeat offender ignored a merciful opportunity to separate from a life of crime given to him by a state court.  It is unfortunate that more victims had to pay such a steep price for this swindler’s federal crimes after he ignored the state court’s orders in his previous conviction. There are far too many fraudsters in Utah who are truly wolves in sheep’s clothing, and Utah investors must be more mindful when parting with their hard-earned savings,” U.S. Attorney John W. Huber said today.

"Fraudsters are very good at what they do.  They are extremely convincing and will work hard to gain your trust.  Driven by greed, many reoffend," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI.  "The FBI will aggressively investigate these crimes, but we urge the public to do their part too.  When considering investment opportunities, do your due diligence and ask some tough, detailed questions about a person’s financial history.  The public is also encouraged to check court records and the state’s White Collar Crime Offender Registry online at utfraud.com."

“Mr. Hansen has made a lifestyle of fraud – whether it was fraud against investors or fraud against a financial institution. The IRS, working with our law enforcement partners, have finally put an end to his lifestyle of fraud,” IRS Special Agent in Charge Tara Sullivan said.

As a part of a plea agreement reached with federal prosecutors, Hansen admitted that he devised a scheme to defraud an individual of $1 million using fraudulent promises and omitting material facts.  Hansen convinced the victim of the scheme, identified as E.L. in the plea agreement, to give him the money by representing he would use the funds to purchase full ownership of Seven Peaks Water Park in Provo.  Hansen told E.L. he would return the money if the transaction could not be completed within 24 hours.  In exchange for the investment, E.L. was promised $23.5 percent ownership in the waterpark.

Hansen admitted that he used the $1 million for things inconsistent with his representations and never returned the money to E.L.  For example, he used $28,000 for a purchase from RC Automotive.

The bank fraud conviction stems from a large check-kiting scheme involving Bank of the West and Deseret First Credit Union.  The check-kiting involved at least 10 different companies and got so complicated in the end that Hansen and a colleague would go to Bank of the West every morning to sort out each transaction.  The bank, according, to the sentencing memo, discovered the kite and put an end to it.  Bank of the West was left with a loss of more than $1.6 million. Hansen asked an elderly friend to cover the loss, but the friend would only agree to pay a portion of the amount, taking the loss amount down to $585,913.44.   

In a sentencing memorandum, federal prosecutors told the court that “Hansen is a prodigious fraudster whose only real occupation is convincing others to give him money and property.”  Hansen was convicted by the State of Utah for selling unregistered securities and placed on probation for 36 months. As a part of his conditions of release, Hansen was required to disclose to any prospective investor in writing that he had approximately $45 million in outstanding judgments against him – some thing he did not do in the case prosecuted by federal prosecutors.

SALT LAKE CITY – A federal indictment unsealed Tuesday morning charges six individuals with conspiracy to steal money from customers at various gas stations in Utah and elsewhere. The indictment alleges the defendants and their co-conspirators executed the conspiracy by using Bluetooth enabled skimming equipment that they installed on the motherboard of the internal computer that controls the gas pumps.  Victims of the alleged scheme lost at least $200,000.

Charged in the indictment are Yosbel Delgado-Valdes, age 40, Iraldo Pereda-Mendez, 32, Emmanuel Nina-Perez, 28, Jandry Artigas-Reyes, 35, and Yarislani Padron-Cruz, 35, all of Salt Lake City, and Yofre Napoleon Almonte, 47, a citizen of the Dominican Republic currently being held in the Davis County Jail on unrelated charges. In addition to Almonte, who is not a U.S. citizen, three defendants are legal permanent residents of the United States, one is a naturalized U.S. citizen, and one has an application pending for legal permanent resident status.

The skimming equipment contains a Bluetooth card reader/recorder that records information – such as customers’ credit card numbers and the name and zip code associate with the card – from the magnetic strip of customers’ cards as the customers insert the cards into gas pumps, according to the indictment.  The defendants and their co-conspirators only needed to get within the necessary range of the Bluetooth skimming device to initiate a wireless Bluetooth connection to the device still inside the gas pump.

The indictment alleges the defendants then downloaded the digital credit card or debit card information that had been captured and stored in their skimming devices.  They were then able to use the captured data to create duplicate “cloned” cards encoded with the same data as the customers’ authentic credit or debit cards.

After making the cloned cards, the defendants and their co-conspirators tested the cards by attempting small transactions – typically $1 – to identify which of the cloned cards were viable and could be used to make larger purchases.

After testing the cards, the defendants and their co-conspirators moved to what the indictment calls the “cash out” phase. The “cash out” phase generally involved large purchases of fuel, though they did make other purchases at gas stations and other retail stores.  The fuel purchases were typically for vehicles they were driving, or for trusted associates/purchasers the defendants would meet, using the cloned cards to fill up their tanks.  The defendants further used the cloned cards to fill external fuel tanks installed in the beds of their pickup trucks – later offloading that fuel into the tanks of semi trucks or into larger storage containers for future use or resale.

In furtherance of the scheme, the indictment alleges the defendants committed several overt acts.  For example, on April 30, 2020, Artigas-Reyes and Pereda-Mendez visited the Tesoro gas station in Sunset, Utah, just after midnight and installed a Bluetooth skimmer in the pump.  On May 21, 2020, they installed a Bluetooth skimmer in a pump at a Texaco station in Scipio.  The indictment alleges the acts were for the purpose of committing bank fraud.

Using the cloned credit or debit cards, the defendants obtained at least $200,000 in funds from multiple financial institutions, the indictment alleges.  For instance, on May 5, 2020, Almonte made a $100 purchase at Exxon Mobil Common Cents in Bountiful using a cloned JP Morgan Chase credit card.  On May 27, 2020, Artigas-Reyes made an $89.41 purchase at the Exxon Mobile Common Cents in Salt Lake City using a cloned Capital One credit card.  Nina-Perez made a $100 purchase at Murphy Express in Riverton using a cloned PNC bank credit card and Delgado-Valdes made a $99.84 purchase at the Home Depot in West Jordan using a cloned Wells Fargo credit card.

“Utah is a hotbed of fraud schemes. I have directed prosecutors and investigative partners to pull out all of the stops in our combined efforts to take on those who victimize Utah residents with their fraud schemes. In this bank fraud ring, allegations suggest persistence, sophistication and organization on the part of the charged conspirators. Investigators and prosecutors have tried to match and surpass those characteristics in their efforts to bring this matter to justice in federal court,” U.S. Attorney John W. Huber said today.

“We all routinely fill up our gas tanks, which means any one of us could have been victims of this alleged crime,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI.  “While the financial losses are significant, the victims are also left with the burden of taking the necessary steps to recover from the damage of identity theft.  The FBI is committed to holding the alleged perpetrators accountable.  We encourage the public to regularly check their bank statements and report fraud to local law enforcement or the FBI."

Each defendant is charged with conspiracy to commit bank fraud in the lead count of the indictment.  Each defendant is also charged with one count of bank fraud and one count of aggravated identity theft.  Almonte, who has three previous deportations from the country, is also charged with illegally entering the country after deportation.  The potential maximum penalty for the conspiracy to commit bank fraud and bank fraud counts is 30 years in federal prison. Aggravated re-entry has a maximum penalty of 10 years in prison. An aggravated identity theft conviction carries a two-year mandatory sentence, which runs consecutive to any other sentence.

Indictments are not findings of guilt.  Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

Padron-Cruz, Artigas-Reyes, Nina-Perez, and Delgado-Valdes were arrested in Utah on Nov. 20.  During the execution of search warrants in connection with the arrests, agents and law enforcement officers found more than $40,000 as well as skimming equipment and what agents believe to be hundreds of cloned credit cards.

These four defendants, along with Almonte, had an initial appearance on the charges in the indictment Tuesday and Wednesday. Almonte has been in custody on an unrelated charge. A federal arrest warrant is pending for Pereda-Mendez.

Assistant U.S. Attorneys in the U.S. Attorney’s Office in Utah are prosecuting the case.  It is being investigated by agents and task force officers working with the FBI’s Cyber Task Force and the Salt Lake City Police Department.

SALT LAKE CITY – Three individuals are charged with travel within the United States with intent to deal firearms without a license in a complaint unsealed Thursday. The charges allege the defendants were involved in purchasing or attempting to purchase 27 firearms in Utah between Aug. 1, 2020, and Nov. 4, 2020.

Charged in the complaint are Erick Lopez, age 20, Christopher Lopez, 22, and Bryan Rodriguez, 21, all of California.

According to the complaint, an ATF special agent was contacted by a federal firearms licensee (FFL) regarding the suspicious attempted purchase of five pistols on Aug. 2, 2020, by a person referred to as Person A in the charging document.  Person A was observed with two Hispanic males in a rental car with California plates.  Ultimately, the FFL canceled the purchase and the sale was not completed.

Between Aug. 1 and Aug. 27, 2020, Person A made three separate purchases for a total of 12 pistols from three different FFLs. According to the complaint, the Person A paid cash for all of the purchases.

In late October, ATF learned that one of the firearms, a Glock pistol, had been recovered during a traffic stop in Arizona involving a convicted felon.

Investigators linked the rental car used during the attempted firearms purchase on Aug. 2, 2020, to an individual.  Further investigation revealed Christopher and Erick Lopez were associated with the individual.

On Nov. 4, 2020, ATF agents learned Person A was attempting to purchase 10 Glock pistols from an FFL.  The agent observed the individual fill out the paperwork to buy the weapons and provide cash for the firearms.  However, the firearms were not transferred to Person A at that time, according to the complaint.  Person A left the store and got into a car with a California license plate parked in a nearby alley. The vehicle left at that point.

Later that evening, the ATF investigator spoke with Person A. Person A admitted he/she had purchased or attempted to purchase 27 firearms in Utah since Aug. 1, 2020.  The complaint alleges Person A indicated that all of the firearms were purchased for three males, who lived in California and were unable to legally purchase firearms in Utah.  According to the complaint, prior to each transaction, the three males provided instructions to Person A as to the quantity and type of firearms to purchase and provided the individual with cash for each transaction.

Person A identified Erick and Christopher Lopez as two of the three males. Rodriquez was later identified by law enforcement officers. The three are believed to be related to each other.

Law enforcement officers located the three defendants. None of the defendants possessed a valid federal firearms license to deal, transport, or ship firearms.  A federal arrest warrant was issued for their arrest.

Initial appearances for the three were held Thursday.  Detention hearings were set for Dec. 4, 2020, for Bryan Rodriquez and Christopher Lopez. U.S. District Magistrate Judge Dustin Pead found Erick Lopez to be an unmanageable risk for non appearance and a risk of danger to the community.  He will remain in the custody of the U.S. Marshals pending resolution of the case.

The potential maximum penalty for the charge in the complaint is 10 years, a fine of $250,000, and three years of supervised release following the completion of the sentence.

Complaints are not findings of guilt.  Individuals charged in a complaint are presumed innocent unless or until proven guilty in court.

SALT LAKE CITY – Timothy James Hallows, age 62, of Kaysville, who pleaded guilty to possession of child pornography in July, will spend 46 months in federal prison.  U.S. District Judge Howard C. Nielson, Jr., imposed the sentence Wednesday morning in U.S. District Court in Salt Lake City.              

Local authorities arrested Hallows on Oct. 16, 2019.  Federal prosecutors filed a Felony Information in May 2020 charging him with possession of material containing an image of child pornography involving a minor who had not attained 12 years of age. Local charges were dismissed following the filing of the federal charges.

As a part of a plea agreement reached with federal prosecutors, Hallows admitted that in 2019 he knowingly possessed sexually explicit images of children on his cell phone. The images included depictions of prepubescent children being sexually assaulted by adults.

Federal prosecutors agreed to recommend Hallows be given credit for acceptance of responsibility in the case and be sentenced to 46 months in federal prison, the low end of the federal sentencing guidelines in the case.  There is no parole in the federal prison system. When he finishes his sentence, he will be on supervised release for five years.  He was ordered to pay a $5,000 assessment under the Justice for Victims Trafficking Act as well as a $100 assessment for the count of conviction. 

Local and federal law enforcement agencies and prosecutors coordinated the investigation and prosecution of this case, including members of the FBI’s Child Exploitation Task Force, the Davis County Sheriff’s Office, the Davis County Attorney’s Office and the U.S. Attorney’s Office. This coordination happens regularly in child exploitation cases because of the significant penalties available in the federal system.  Law enforcement task force officers investigating these cases work seamlessly with prosecutors in either venue.   

“These are cases that motivate all prosecutors because they involve the victimization and exploitation of children,” U.S. Attorney John W. Huber said today. “My office regularly partners with the Office of the Davis County Attorney on child exploitation cases such as this one, as we do with other county attorney offices throughout the state. Together, we seek the best court system to achieve justice for child victims and their families.  We recognize and appreciate the significant work Davis County officers and prosecutors contributed to the successful prosecution of this case.”

Federal judges consider a number of factors when imposing a sentence for possession of child pornography.  They include the number of images, use of a computer, distribution of the images, the defendant’s abuse of a position of trust to conceal the offense, the ages of the children in the images, the defendant’s criminal history, the nature and circumstances of the offense, and the characteristics of the defendant. Multiple counts do not change the sentence because the court is aware of each image possessed by the defendant regardless of how many counts are charged.

A Utah man and his company were charged in an indictment today with violating the Endangered Species Act and Lacey Act for their role in illegal wildlife trafficking, announced Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney John W. Huber of the District of Utah.   

Jean-Michel Arrigona, 58, and his company Natur, Inc. in Midvale, Utah, sell wildlife in the forms of art, taxidermy mounts, bones, and skeletons.  The indictment alleges that Arrigona imported wildlife into the United States without declaring it to U.S. Fish and Wildlife Service or customs authorities.  He later resold the wildlife from the Natur store and its website.

The Lacey Act is the nation’s oldest wildlife trafficking statute and prohibits, among other things, selling wildlife that had been illegally brought into the country.  The Endangered Species Act and federal regulations require importers to declare wildlife when it enters the country.  Between December 2015 and September 2020, Arrigona imported approximately 460 wildlife items without declaring them.  The wildlife, primarily from Indonesia, included bats, lizards, turtles, insects, starfish, and mollusks.  Arrigona did not import any live animals.  Some of the wildlife, such as the flying fox (Pteropus sp.) and monitor lizard (Varanus sp.) are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which regulates trade in endangered or threatened species through permit requirements.  The United States and 182 other countries are signatories to the CITES treaty.

The U.S. Fish and Wildlife Service’s Office of Law Enforcement in Redmond, Washington, conducted the investigation as part of Operation Global Reach.  The operation focused on the trafficking of wildlife from Indonesia to the United States.  Trial Attorney Ryan Connors of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Melina Shiraldi for the District of Utah are prosecuting the case.

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

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

SALT LAKE CITY – Murat Suljovic, age 23, of Salt Lake City, pleaded guilty to one count of attempting to provide material support to a designated foreign terrorist organization in U.S. District Court in Salt Lake City Tuesday morning.  U.S. Magistrate Judge Dustin B. Pead presided at the plea hearing.

According to the plea agreement, Suljovic admitted that in January 2019, while living in Utah, he corresponded with an individual, identified as Person A in the court document, who he believed was a follower of ISIS. He admitted he believed Person A was interested in performing an attack for ISIS. He also believed Person A was assisting another individual, referred to as Person B in the plea agreement, who was also interested in performing an attack for ISIS.

Suljovic admitted that in his correspondence with Person A, he pretended to be an ISIS leader through an online persona, and he believed Person A and Person B believed he was an ISIS leader.  Suljovic provided advice about potential targets for a terrorist attack and advice about how to plan an attack. Suljovic admitted he provided a bomb-making tutorial video to Person A in the correspondence to share with Person B for purposes of training and assisting Person B in carrying out an attack, according to the plea agreement.

By providing the bomb-making tutorial video to Person A, Suljovic admitted he knowingly attempted to provide material support to ISIS, knowing that ISIS has engaged and does engage in terrorism.

Suljovic was charged with providing material support to a designated foreign terrorist organization in a Felony Information filed in May.

As a part of the plea agreement, Suljovic agreed to forfeit a variety of computer and electronic equipment used to facilitate his criminal conduct or acquired from his conduct.

The maximum potential penalty for the conviction is 20 years in prison and a fine of $250,000.  A sentencing date for Suljovic, who remains in custody, will be scheduled later.

The case is being investigated by the FBI and members of its Joint Terrorism Task Force and prosecuted by Assistant U.S. Attorneys Carl D. LeSueur and Tyler L. Murray of the Utah U.S. Attorney’s Office with the assistance of National Security Division Counterterrorism Section Trial Attorney Michael Dittoe. 

SALT LAKE CITY – A status conference is set for Nov. 23, 2020, for nine individuals charged in what the indictment alleges were conspiracies to distribute methamphetamine and heroin in the Salt Lake Valley and Idaho. A federal grand jury returned a four-count indictment earlier this month. The investigation, led by DEA Metro Narcotics Task Force and IRS Criminal Investigation, started in March 2020.

The lead defendant in the case is Toulon Mattox, 41, of Taylorsville, who was arrested after a federal judge signed a complaint alleging the conspiracies. According to the indictment, Mattox has a previous conviction for conspiracy to distribute controlled substances in federal court in Idaho. He was sentenced to 33 months in federal prison and 60 months of supervised release in that case.  He started his supervised release in October 2015 and moved to Utah.  He filed a motion for early termination of his supervised release in November 2017, which was granted, according to a complaint filed in the case. 

Mattox, according to the complaint, owned a restoration company that repairs and restores homes contaminated by methamphetamine.  Mattox provided drugs to employees of his business, specifically methamphetamine, the complaint alleges.  

Mattox is charged with conspiracy to distribute methamphetamine in the first count of the indictment.  Also charged in that count are Lupe Gene Sandoval, 41, of West Valley City, Jerod B. Meyer, 34, of South Salt Lake City, Kelly Ann Cockrell, 43, of Salt Lake City, Michael Kermitt Nugent, 46, and James Walker Taylor, 46, both of Idaho Falls, Idaho, Fred James Schaffer, 56,  of West Valley City, and Whitney Carter, 31, of Provo.

Mattox is charged with conspiracy to distribute heroin in the second count of the indictment. Sandoval, Meyer, Cockrell and Jose Armenta-Sanchez, 30, a citizen of Mexico living in Salt Lake City, are also named in that count.

Mattox, Taylor, and Carter are charged with conspiracy to commit money laundering in the third count of the indictment and Armenta-Sanchez is charged with possession of heroin with intent to distribute in the final count of the indictment.

Acting on a tip, the DEA Metro Narcotics Task Force initiated an investigation of Mattox and others in March 2020 using court-authorized investigative tools.  Information shows Mattox had a source for drugs who resided in California and that many of Mattox’s drug customers lived in Idaho. The investigation resulted in the charges in the federal indictment, including the conspiracies to distribute methamphetamine and heroin. The charges allege that between April 2019 and September 28, 2020, the defendants conspired to distribute of up to 4 pounds of heroin and up to 17 pounds of methamphetamine.

Mattox has been detained pending resolution of the case. U.S. Magistrate Judge Daphne A. Oberg found that although he did well on supervision after his previous drug conviction, just 18 months after Mattox was released from supervision early, he apparently became involved in drug trafficking behavior as the ringleader of the conspiracy. Judge Oberg found him to be an unmanageable risk of danger to the community.

Magistrate Judge Oberg found Cockrell poses an unmanageable risk of danger to the community as well as a risk of nonappearance based on the significant number of times she has failed to appear in previous criminal cases.

Meyer did not contest detention at his initial appearance and Carter was released on conditions of supervised release.  Sandoval had an initial appearance last week and Magistrate Judge Oberg found he posed a danger to the community and a risk of non-appearance and ordered him detained pending resolution of the case. Nugent, who was arrested in Idaho, has an initial appearance Thursday before Magistrate Judge Oberg. Armenta-Sanchez is scheduled for an arraignment and detention hearing on Oct. 28, 2020.  Taylor and Schaffer have not appeared on the charges.

The potential maximum penalty for conspiracy to distribute methamphetamine is life in prison with a 10-year mandatory minimum.  The potential maximum penalty for conspiracy to distribute heroin is 20 years in prison.  Conspiracy to commit money laundering has a potential penalty of 20 years in prison.  Possession of heroin with intent to distribute heroin carries a potential 40-year sentence with a five-year mandatory minimum.

Indictments are not findings of guilt.  Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case.  Members of the DEA Metro Narcotics Task Force and special agents of IRS Criminal Investigation are conducting the investigation.

SALT LAKE CITY – United States Attorney John W. Huber announced today that Assistant United States Attorney Aaron Clark will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day program for the upcoming November 3, 2020, general election.  Clark will coordinate with election officials in Utah and at the Department of Justice to ensure that all qualified voters in Utah have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation, or fraud in the election process.

“Although Utah has a history of conducting problem-free elections, we want to make sure residents of Utah know that reports of fraud or abuse will be taken seriously,” Huber said today.  “Election fraud and voting rights abuses dilute the worth of votes honestly cast.  They also corrupt the essence of our representative form of government.  Whether a Utah voter is mailing in a ballot or voting in person, anyone who has specific information about election fraud or discrimination should pass that information on to my office or to the FBI,” Huber said.           

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur.  The Department’s long-standing Election Day program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations during the election process.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).           

The administration of the election process is primarily a state rather than a federal function.  States have the power to establish the place, time, and manner for holding elections.

Concerns about election fraud or voting rights abuses in Utah should be referred to Clark. He can be reached at 801-325-1405. In addition, the FBI will have special agents available throughout the country to receive allegations of election fraud and other election abuses on Election Day.  The Utah FBI office can be reached at 801-579-1400.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/ .

In the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.

“Voting rights are core to who we are as Americans, and we expect free and fair elections. It is imperative that those who have specific information about discrimination or election fraud make that information available to my office, the FBI, or the Civil Rights Division,” Huber said

###

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

SALT LAKE CITY – Twenty-one documented gang members and associates of several home-grown white supremacist gangs allegedly responsible for distributing drugs and firearms around the Salt Lake City and Ogden areas are charged in 15 indictments unsealed Friday morning in federal court.  

The charges follow a strategic, intelligence-based Organized Crime Drug Enforcement Task Force investigation (OCDETF) of Soldiers of Aryan Culture (SAC) members, Silent Aryan Warriors (SAW) members, Noble Elect Thugs (NET) members, and associates.  The joint local-federal investigation resulted in 15 unsealed indictments alleging distribution of methamphetamine, felon in possession of a firearm, and possession of a firearm during and in relation to a narcotics trafficking offense. 

OCDETF is an independent component of the U.S. Department of Justice.  Established in 1982, OCDETF employs strategies to reduce the availability of illicit narcotics throughout the United States using a prosecutor-led, multi-agency approach to take on complex investigations. OCDETF cases facilitate joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms. 

Agencies assisting in the organized crime investigation include the ATF, U. S. Attorney’s Office, the Ogden Police Department, the Unified Police Department, the U.S. Marshals Service, the Salt Lake Area Metro Gang Unit, the Ogden Metro Gang Unit, the Weber Morgan Narcotics Strike Force, West Valley City Police Department, and the Utah Department of Public Safety’s State Bureau of Investigation.

The charges are the result of an investigation that started in June 2019 with the ATF and the two gang units joining together targeting drug and firearms trafficking activities throughout Salt Lake City, West Valley City, and Ogden City by SAC members.  The investigation led law enforcement officers to numerous documented gang members and associates trafficking in methamphetamine and firearms. Many of the defendants have been involved in criminal conduct in Utah communities for many years.  In two cases, this criminal history will allow federal prosecutors to seek a significant federal sentencing enhancement if they are convicted of the charges. 

As a part of this proactive investigation, agents used a number of investigative techniques to learn about methamphetamine and firearms dealing by SAC members, SAW members, and associates.  Ultimately, the targeted federal-state partnership resulting in numerous indictments of these individuals. 

Around 1.65 pounds of methamphetamine were purchased during the investigation.  Fifteen firearms were recovered during the investigation, including 10 during the investigation and 5 when arrest warrants were executed Wednesday. 

21 DEFENDANTS CHARGED IN 15 SEPARATE INDICTMENTS

Multi-Defendant Cases

•  Steven Mack Swena, Clinton Dean Spencer
  • Distribution of 5 grams or more of methamphetamine
    • Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
  • Distribution of 50 grams or more of methamphetamine
    • Maximum penalty: 10 years mandatory minimum, Life maximum, $10 million fine
  • Felon in Possession of Firearm
    • Maximum penalty: 10 years statutory maximum, $250,000 fine
•  Richard Ryan, Amanda Lee Graham, Jared Loren Brown, Thomas Radford
  • Distribution of 50 grams or more of methamphetamine (mixture) and aiding/abetting
    • Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
• Justin William Austin, Cody Kelly Wright, Jerrad Luis Colvin
  • Distribution of 5 grams or more of methamphetamine (3 counts)
    • Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
  • Distribution of 50 grams or more of methamphetamine
    • Maximum penalty: 10 year mandatory minimum, life statutory maximum, $10 million fine
  • Distribution of heroin (Austin)
    • Maximum penalty: Up to 20 years in prison, $1 million fine
    • Carry/use of a firearm during and in relation to a drug trafficking crime (Austin)Maximum penalty: 5 years mandatory minimum up to life statutory maximum, $250,000 fine
  • Felon in possession of a firearm and ammunition (Austin)
    • Maximum penalty: Up to 10 years statutory maximum, $250,000 fine

 

Single Defendant Cases

• James William Broadhead
  • 2 counts of Distribution of methamphetamine
    • Maximum Penalty: 20 years statutory maximum, $1 million fine
  • 2 counts of Possession of Firearm In Furtherance of Narcotics Trafficking
    • Maximum Penalty: 5 years consecutive sentence, Life maximum
  • 3 counts of Felon in Possession of Firearm and Ammunition
    • Maximum Penalty: 10 years statutory maximum, $250,000 fine
• Johnathan Dale Miller
  • Distribution of 50 grams or more of methamphetamine
    • Maximum penalty: 10 years mandatory minimum, Life maximum, $10 million fine
  • Distribution of 5 grams or more of methamphetamine
    • Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine 
• Brian Christopher Jenson
  • Distribution of 50 grams or more of methamphetamine
    • Maximum penalty: 10 years mandatory minimum, Life maximum, $10 million fine
• Timothy Cox*
• Heather Brooke Hebdon
• Jesse Harris
• Bret Miller
  • Distribution of 5 grams or more of methamphetamine
    • Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
• Michael Byrd
• Timothy Daniel Jepsen*
  • Distribution of Methamphetamine
    • Maximum penalty: 20 years statutory maximum, $1 million fine
• Tyler William Riding
• Jordan Anderson
• Chance Robinson
  • Felon in Possession of Firearm and Ammunition
    • Maximum Penalty: 10 years statutory maximum, $250,000 fine

 

Prosecutors have filed a notice of a sentencing enhancement for defendants with * next to their names. This enhancement potentially doubles their statutory maximum sentence, or where applicable, their mandatory minimum sentence. 

Eleven defendants were arrested Wednesday.  Another 10 were already in custody. Defendants in the cases will make initial appearances on the indictments in the coming weeks.  Several are in state custody on other state criminal charges.

Indictments are not findings of guilt.  Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

SALT LAKE CITY – Aaron Michael Shamo, the CEO of a nationwide dark net drug trafficking organization that distributed more than a half million counterfeit pills throughout the country, will serve life in federal prison after engaging in, and being convicted of, the most serious offense in the Controlled Substance Act.  U.S. District Judge Dale A. Kimball imposed the sentence Thursday morning in Salt Lake City. 

A federal jury found Shamo guilty of organizing and directing a drug trafficking organization that imported fentanyl and alprazolam from China and used the drugs to manufacture fake oxycodone pills made with fentanyl and counterfeit Xanax tablets following a trial in August 2019.  Forty-seven witnesses testified at trial and hundreds of exhibits were received into evidence. 

The jury convicted Shamo, 30, of Cottonwood Heights, Utah, of engaging in a continuing criminal enterprise, three counts of aiding and abetting the importation of a controlled substance, possession of a controlled substance with intent to distribute, manufacture of a controlled substance, and two counts of knowing and intentional adulteration of drugs while held for sale. The jury also found Shamo guilty of aiding and abetting the use of the U.S. Mail in furtherance of a drug trafficking offense, conspiracy to commit money laundering, money laundering promotion and concealment, and engaging in monetary transactions in property derived from specified unlawful activity. Shamo was found guilty on 12 of the 13 counts in the indictment.  The jury did not make a decision on the aiding and abetting the distribution of fentanyl resulting in death count.

The nation’s opioid crisis was in full effect by the end of 2016, when Shamo was distributing his fentanyl-laced oxycodone around the country. Shamo distributed the controlled substances to other individuals for distribution in all 50 states using their storefront, PHARMA-MASTER, on the Dark Net marketplace AlphaBay and the U.S. mail. Federal law enforcement agents and prosecutors say an undercover purchase of 100 oxycodone pills is a substantial step in a drug investigation. Shamo sold more than half a million fentanyl-laced pills on the dark net.  He also sold hundreds of thousands of fentanyl pills locally. Prosecutors told the jury that Shamo became the person he set out to be – the Pharma Master.

Evidence at trial showed Shamo did the things leader and organizers do. He was in control of the majority of the functions of the enterprise.  He established the dark web store front, hired employees, took charge of marketing and product placement. He was a drug dealer to other drug dealers. He had the contacts in China and ordered the fentanyl.  Most significantly, investigators were led to Shamo as they followed the proceeds of the drug trafficking organization. He had sole access to incoming bitcoin payments from customers. Shamo referred to the organization as his baby and his empire, prosecutors argued at trial.

Shamo developed the fentanyl product through a dangerous “trial and error” process as he distributed it to individuals across the country, evidence showed.  Experts say 1 milligram of fentanyl in a pill can have dangerous consequences up to and including death. Shamo received messages from customers that they were getting sick.  His response, prosecutors said, was to send more pills to the complaining customers.  There was no shortage of fake pain pills.  Co-defendants in the case, who were responsible for packaging and shipping, used a vacuum to clean up pills from the floor because they believed it was not worth their time to pick them up because of the volume of pills they were manufacturing.

“Aaron Shamo knew the nation was on fire with opioids and he poured fuel on the flames, over and over and over, never getting burned himself, but causing pain and misery wherever his fire spread.  Aaron Shamo could be considered the face of the opioid epidemic. He was a profiteer, callously making millions of dollars and living a life of leisure while exploiting those suffering through opioid addiction,” Assistant U.S. Attorney Vernon Stejskal said in  closing argument during the trial.

In their sentencing memorandum, federal prosecutors told the Court that the true scope of the defendant’s victims cannot be calculated.  Since Shamo sold the fentanyl-laced fake oxycodone pills in bulk to redistributors, the end users of the pills could not always be located by investigators. Evidence shows that more than 90 individuals died from subsequent overdoses.  

 “The defendant’s history and characteristics support the imposition of a life sentence.  The defendant dedicated himself to building his drug trafficking empire and becoming rich.  The defendant also new about the acute dangers of fentanyl but continued to produce fentanyl-laced fake oxycodone pills at an ever-increasing rate prior to his arrest,” prosecutors wrote in a sentencing memorandum. “Dark net drug traffickers falsely operate under the assumption that they are anonymous and untouchable.  Dark net drug traffickers see the immense profit potential for the highest-volume sellers of opioids online – sellers like Shamo. A life sentence would deter current and future dark net drug traffickers,” they wrote.

“Shamo’s drug trafficking organization is a graphic example of the dangers in drug trafficking and the harm it causes individuals, families, and communities. At least 90 of Shamo’s retail customers have died.  Because Shamo’s organization supplied pills to other drug distributors on a wholesale basis, it is impossible to know for sure how many have perished in this illicit drug network. Most of Shamo’s profit hinged on fentanyl-laced fake pain pills, and fentanyl is an extraordinarily poisonous substance,” U.S. Attorney John W. Huber said. “Congress mandated the life sentence imposed today, which implies that a bi-partisan majority of our nation’s policymakers agreed on this significant sentence for circumstances like those found in Shamo’s conduct,” Huber said.

"In 2016, Shamo sold 1 million fentanyl-laced fake oxycodone pills to unsuspecting buyers in every state in the union. While the total harm he caused can never be measured, at least 90 of his known customers have died from overdoses. The Court’s sentence today—life imprisonment—brings justice to the families of his deceased customers and everyone else affected by his crimes. The Attorney General’s Office extends its deepest sympathies to the families of the deceased, recognizing that not even a just sentence can restore what was lost. We remain fully engaged in our effort to combat the opioid epidemic by aggressively investigating and prosecuting drug dealers who prey on the addicted," Utah Attorney General Sean D. Reyes said.

“The tragedy of the opioid crisis continues to this day, fueled in large part by those who use every method available, including the Dark Web, to sell their illicit goods to those with substance abuse addictions," said Catherine Hermsen, Assistant Commissioner for Criminal Investigations- FDA Office of Criminal Investigations.  “The FDA will continue to work with its law enforcement partners to protect the public health and disrupt and dismantle illegal prescription drug manufacturing and distribution.”

“Aaron Shamo profited off of the pain and suffering of others in the hopes of becoming rich and famous. Shamo deserves to be held accountable for his actions. This investigation highlights the on-going struggle that our country faces with opioid addiction and the cooperative efforts needed to successfully dismantle criminal organizations targeting our neighborhoods,” Michael J. Tinkler, Assistant Special Agent in Charge of the DEA’s Utah District Office, said.

“Today’s sentence is the result of a collaborative investigation between federal, state and local partners and exemplifies our commitment to dismantle major narcotics and money laundering operations in Utah,” said Eric Balliet, Deputy Special Agent in Charge of U.S. Homeland Security Investigations, Denver.  “As this case shows, you can’t hide on the dark net. HSI will continue to use its considerable technological expertise to investigate criminals like Shamo who push dangerous drugs into our neighborhoods and contribute to the epidemic of opioid addiction in our country.”   

“Mr. Shamo put at risk countless individuals addicted to opioids, through the sale of dangerous counterfeit fentanyl-laced pills. His drug empire affected the entire nation and today Mr. Shamo and the United States people received their justice,” said IRS Criminal Investigation Special Agent in Charge, Tara Sullivan. “We will continue to work together with our law-enforcement partners to dismantle criminal enterprises like Mr. Shamo’s, who intend to financially profit from the exploitation and suffering of our communities and Americans as a whole.”

“The conviction and sentencing of Aaron Shamo is an excellent example of multiple law enforcement agencies combining their expertise and resources to work on the common goal of taking down dark web vendors.  These vendors work under the belief they are anonymous, selling dangerous narcotics such as the deadly fentanyl uncovered in this investigation.  U.S. Postal Inspectors are committed to continuing our work to dismantle drug trafficking operations to keep USPS customers and employees safe from greedy drug traffickers who favor profit over human lives,” stated Inspector in Charge Melisa Llosa of the U.S. Postal Inspection Service, Phoenix Division.”

A restitution hearing in the case will be held in November.

Assistant U.S. Attorney Vernon Stejskal of the U.S. Attorney’s Office and Special Assistant U.S. Attorneys Michael Gadd and Kent A. Burggraaf prosecuted the case.  Gadd and Burggraaf are Assistant Attorneys General in the Utah Attorney General’s Office.  Special agents of the U.S. Department of Homeland Security Investigations, DEA, IRS-Criminal Investigation, the Food and Drug Administration Office of Criminal Investigations, and Postal Inspectors with the U.S. Postal Inspection Service investigated the case.

SALT LAKE CITY – A Las Vegas man is charged with nine counts of making a false statement during the acquisition of a firearm in a federal indictment returned by a grand jury in Salt Lake City, along with one count of dealing in firearms without a license and one count of travel within the United States with intent to violate federal law prohibiting dealing in firearms without a license.

The indictment alleges Gregory Alan Nelson, 32, knowingly made false written statements in connection with the acquisition of firearms intended to deceive the firearms dealer. Specifically, the indictment alleges Nelson falsely answered “yes” on an ATF form asking whether he was the actual buyer of the firearm.  The counts in the indictment refer to a variety of firearms Hansen purchased from federal firearms licensees (FFLs) in Utah during May, June, July and August.

Charges allege Nelson purchased approximately 283 guns in Utah in 2020. Using a conservative estimate, he spent about $176,000 on the guns, including 147 Glock pistols.

“The time-to-crime evidence in this prosecution is troubling. Allegations portray hundreds of guns purchased in Utah, too many of which were later recovered in criminal investigations outside of Utah in a relatively short period of time,” U.S. Attorney John W. Huber said.  “To be sure, these charges are serious as far as the potential consequences if he is found guilty of federal felonies. More serious, though, are the negative effects on public safety as a result of the conduct outlined in the allegations. Gun crime endangers our communities.”

“ATF prioritizes illegal firearms trafficking. Most firearms start out as a legal commodity but in this case multiple firearms purchased by Nelson were transferred illegally, some ending up at crime scenes.  In order to help keep the public safe, ATF agents interdicted and stopped the flow of these firearms,” ATF Special Agent in Charge, Denver Field Division, David Booth said.

According to a complaint filed in the case, Nelson came to the attention of ATF agents in Salt Lake City in July after purchasing a large number of similar firearms over a short period of time throughout Utah. The ATF received information from a FFL with numerous locations in Utah that Nelson’s firearms purchases were suspicious in nature given the multiple purchases of firearms he was making and the different, potentially conflicting explanations he offered as he interacted with store employees during the transactions.

Under federal law, FFLs are required to send a report to ATF when there is a sale of multiple firearms to the same purchaser within a short period of time.  ATF uses the information to investigate potential firearms trafficking cases. If one or more firearms recovered from a crime are part of a multiple purchase, this could be an indicator of potential firearms trafficking.  A gun recovered from a crime shortly after being purchased in a multiple sale is known as a short time-to-crime ratio.  It refers to the time between when a firearm is purchased, and when that same firearm is recovered at a crime scene.

The ATF also received a tip that Nelson was purchasing firearms in Utah and trafficking them in Las Vegas.

ATF firearms tracing shows that as of Oct. 9, 2020, 19 firearms, originally purchased by Nelson, have been recovered in California by law enforcement officers investigating various crimes.  All 19 of the recovered firearms were recovered within a short time-to-crime ratio of between 2 and 91 days.  One of the recovered firearms was used to commit a double murder, according to the complaint.  All firearms were recovered in different areas of California and were traced to Nelson as the original purchaser.

Examples from the complaint include: 

• On May 28, 2020, Nelson purchased a semi-automatic pistol from Sportsman’s Warehouse in St. George.  This gun was recovered on Aug. 27, 2020 (just over 3 months time to crime) by DEA during a narcotics distribution investigation in California.
• On June 5, 2020, Nelson purchased a semi-automatic pistol from Rowdy’s Range and Supply in St. George.  This gun was recovered on July 7, 2020 (29 days time to crime) by the Walnut Creek Police Department while executing a search warrant during the course of a murder investigation.
• On June 17, 2020, Nelson purchased a semi-automatic pistol from Gunnies in Orem. This gun was recovered on Aug. 2, 2020 (46 days time to crime) by the East Palo Alto Police Department during the investigation of a double murder in California.
• As of Aug. 28, 2020, the investigation shows Nelson purchased firearms recently from 29 FFLS in Utah and paid for them with cash.  Nelson made one purchase in excess of $13,000. He also made purchases around $11,000, and three in excess of $7,000.  During the months of July and August, Nelson purchased 171 firearms. 

Nelson has no known employment for 2020 and, according to the complaint, does not have the monetary means to purchase the quantity of firearms he has to date – an indication Nelson is buying the pistols at the direction of and through the financing of another individual. Nelson has repeatedly purchased duplicate models of handguns that are not typically considered to be of collector value, including the 147 Glock pistols, which is an indication of straw purchases, investigators say.

Nelson was arrested on the Utah complaint in Las Vegas in August.  He was released on conditions of supervised release imposed by a federal magistrate in Las Vegas. He had an initial appearance before U.S. Magistrate Judge Cecilia M. Romero on Sept. 21, 2020, in Salt Lake City.  He was arraigned on charges in the indictment Thursday.

Each count of making a false statement during the acquisition of a firearm carries a potential sentence of 10 years in federal prison. Count 10, dealing in firearms without a license, has a potential five-year sentence.  The final count of the indictment, travel within the United States with intent to violate federal law prohibiting dealing in firearms without a license, has a maximum sentence of 10 years.

Indictments are not finding of guilt.  Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case.  Special agents with the ATF are conducting the investigation.

SALT LAKE CITY – Christopher D. Hales, 39, of Lehi pleaded guilty to wire fraud conspiracy and money laundering conspiracy in connection with a financial fraud scheme he and other co-conspirators devised while Hales was in a halfway house serving a sentence for another federal fraud case.  The scheme resulted in a loss to investors of at least $7 million. 

The plea agreement includes a stipulated 10-year sentence, subject to the Court’s approval. Federal prosecutors asked for detention following the change of plea.  Hales did not contest detention at this time.  U.S. Magistrate Judge Daphne A. Oberg presided over the hearing last week.

“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer. Utahns must diligently consider investment pitches and their risks before parting with hard-earned savings,” U.S. Attorney John W. Huber said today.

“A judge once told Christopher Hales he was addicted to defrauding people,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI.  “The reality is that most fraudsters have no remorse or conscience, and they often reoffend.  That's why it's so important for the public to do their due diligence when looking to invest and immediately report fraud to police or the FBI.” 

“Hales is a bad apple that has continuously fed his greed and preyed on others too many times,” said IRS-Criminal Investigation Special Agent in Charge Tara Sullivan, “IRS-Criminal Investigation is proud to work with our partners to help protect Utah residents from scammers like Hales. Please remember, if it sounds too good to be true, it probably is.”

Hales was convicted of bank fraud in April 2011 as a part of a mortgage fraud case.  He was sentenced to 90 months in federal prison and ordered to pay $12,719,236 in restitution.  He violated terms of his supervised release in 2016 and he was sentenced to another 30 months in federal prison.

According to a Felony Information filed in the current case, Hales was released from federal prison on Feb. 8, 2018, and resided at a halfway house in Salt Lake City until around Aug. 8, 2018. Nevada Secretary of State records show Sindakit Software LLC was formed on Aug. 6, 2018, by a co-conspirator (CC1) known to federal prosecutors.  CC1 was listed as the sole officer. CC1 was listed on the Sindakit Software bank account as the manager and was the only authorized signor.

The Information alleges Hales and CC1 conspired to defraud investors and potential investors by inducing them to purchase investments in a sports betting software. Hales purported to own a sports betting software that “beat the house” to convince investors to give him money to place sports bets.  In furtherance of the conspiracy, the indictment alleges Hales made a variety of false statements of material facts to investors and potential investors, including representing that 100 percent of investor funds would be used to place sports bets when, in fact, Hales diverted nearly all investor funds received to his and CC1’s personal use, and to make payments to other investors.

Hales also told them he was Chris Christian, when in fact, he was Christopher Hales, a convicted felon on supervised release. Investors were also told Hales would match all investor funds, when in reality he would take out a line of credit with the sports betting website and use the line of credit to hedge bets. Hales also told investors that the sports betting was producing a rate of return for investors of around 10 percent a week – an amount made up by Hales to entice investors to provide funds. He also represented that there were potential buyers willing to purchase the software he developed for tens of millions of dollars, when there were actually no buyers, according to the Felony Information.

In furtherance of the conspiracy, Hales failed to disclose to investors that they did not actually own an algorithm or a sports betting software and that they were laundering investor funds through transfers in and out of the Sindakit Software account.  Sports betting account statements provided to investors were false and were inflated based on Hales’ line of credit and his ability to manipulate the statements.  They also did not disclose that part of the investors’ money was used to pay commissions to those introducing investors to Sindakit or that they were using investment money from newer investors to pay promised winnings to earlier investors in what is commonly recognized as a Ponzi scheme.  

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of IRS Criminal Investigation and the FBI are conducting the investigation.

SALT LAKE CITY – U.S. Attorney John W. Huber announced Wednesday morning that Utah is receiving almost $1 million in Department of Justice grant awards to support crime victims in Utah. The grants, awarded by the Department’s Office of Justice Programs, are part of more than $144 million distributed nationwide to enhance the response to victims of crime throughout the United States.

“The Department of Justice is steadfast in its commitment to protecting public safety and bringing justice to those who have been victimized,” said Attorney General William P. Barr. “The investments we are making today will support service providers as they work to secure the legal rights of victims and put survivors of criminal acts on the road to recovery.”

“The Department of Justice underscores its commitment to victim rights by dedicating resources like those announced today. These awards will help shore up gaps that may exist in the state, and provide substantial assistance to better serve Utah communities,” Huber said today.

Utah State University in Logan, Utah, will receive $196,335 as a part of the Law Enforcement-Based Victim Specialist program.  This funding allows recipients to better support victims of crime through the criminal justice process.

The Utah Office for Victims of Crime is receiving two awards.

The Utah office is one of seven states to receive funding under the Crime Victim Compensation Assessment Program. The $348,608 award will support the states in assessing victims’ access to compensation programs and implementing recommendations to increase the number of victims aware of this resource.

The Utah Office for Victims of Crime is also one of 10 states receiving $450,000 through the State Victim Liaison Project to place one or more experienced crime victim liaisons within selected Victims of Crimes Act state administrating agencies to act as a bridge between state and other state-based nongovernmental organizations to identify gaps in victim services and improve access to resources for crime victims in rural and tribal areas, older victims of crime, and victims of violent crime.

 

ST. GEORGE, UT – Channing L. Allen, 36, of Stroudsberg, Pennsylvania, pleaded guilty to one count of possession of methamphetamine with intent to distribute and one count of possession of a firearm in furtherance of a drug trafficking crime in federal court in St. George Thursday morning. U.S. Magistrate Judge Paul Kohler conducted the hearing.

A Utah Highway Patrol trooper initiated a traffic stop on I-15 in Iron County on Oct. 7, 2019, after observing traffic violations. Allen, who was driving the vehicle, did not have a current registration for the vehicle. After noticing other issues, the Trooper became suspicious of Allen’s conduct and began an investigation that ultimately led to 47 packages of methamphetamine in after-market compartments installed in the vehicle. The packages weighed approximately 86 pounds. 

Allen admitted that he possessed the methamphetamine with intent to distribute and, in furtherance of the drug trafficking crime, he was in possession of a Glock 27 handgun.

U.S. District Judge David Nuffer will impose sentencing in the case Dec. 17, 2020.  The plea agreement includes a stipulated sentence of 144 months followed by 60 months of supervised release.  The sentence is subject to the approval of the Court.

Assistant U.S. Attorneys in the St. George U.S. Attorney’s Office are prosecuting the case.  UHP troopers and agents with the Utah State Bureau of Investigation are investing the case.

ST. GEORGE, UT – Rashaan Mamao Matalolo of St. George, Utah, will spend 18 months in federal prison after pleading guilty to one count of possession of a firearm while subject to a domestic violence protective order. Under federal law, individuals subject to a domestic violence protective order are prohibited from possessing a firearm.  U.S. District Judge David Nuffer imposed the sentence Wednesday morning in federal court in St. George.

Matalolo, 25, pleaded guilty to the charge in a Felony Information at a hearing in July before U.S. Magistrate Judge Paul Kohler. He admitted that he possessed a Smith & Wesson .40 caliber pistol on May 8, 2020.  He also stipulated that he knew he was subject to domestic violence protective order that prohibited him from possessing firearms.

“Cases that allow us to get firearms out of the hands of domestic violence abusers are always a priority. Law enforcement officers around the state are watching for such violations and refer the cases to us.  If anyone knows of someone in possession of a firearm while subject to a domestic violence protective order, please reach out to your local police department,” U.S. Attorney John W. Huber said today. 

“This is critically important as we work to protect victims of domestic violence during this time of COVID-19.  Many stressors are exacerbated during the pandemic, including isolation and financial strain. Victims are in danger if they are isolated with an abuser or fear retaliation if they separate from the abuser,” Huber said. “With these types of prosecutions, we have a valuable tool to help protect victims.”

Matalolo came to the attention of officers with the St. George Police Department about 12:15 a.m. on May 8, 2020.  Officers made contact with three individuals, including Matalolo, in the parking lot of the Clarion Suites in St. George.  According to a complaint filed in the case, officers smelled the odor of marijuana and observed that an underage individual had an open can of beer. 

An officer observed a handgun holstered on the side of a fanny pack Matalolo was wearing on his hips.  As officers attempted to detain the three individuals, Matalolo fled on foot.  An officer chasing him observed him drop the fanny pack and the firearm on the ground.  Matalolo was able to escape and was not apprehended by officers that day.

Officers found the firearm Matalolo dropped.  It did not contain ammunition and was later determined to be stolen.  The gun holster was still attached to the fanny pack. Officers found identification documents belonging to Matalolo inside the fanny pack. Officers determined that Matalolo is subject to a valid protective order.  He was arrested May 24, 2020, on an unrelated drug offense and booked into the Washington County jail.

The case is being prosecuted by Assistant U.S. Attorneys in the St. George Office of the U.S. Attorney’s Office in Utah. Officers with the St. George Police Department and special agents of the DEA are investigating the case.

SALT LAKE CITY – A Felony Information filed in federal court charges Christopher D. Hales, 39, of Lehi with wire fraud conspiracy and money laundering conspiracy in connection with a financial fraud scheme he and other co-conspirators devised while Hales was in a halfway house serving a sentence for another federal fraud case.

The charges allege the new scheme resulted in a loss to investors of at least $7 million. An initial appearance and change of plea hearing for Hales is scheduled for Oct. 6, 2020, before U.S. Magistrate Judge Daphne A. Oberg.

Hales was convicted of bank fraud in April 2011 as a part of a mortgage fraud case.  He was sentenced to 90 months in federal prison and ordered to pay $12,719,236 in restitution.  He violated terms of his supervised release in 2016 and he was sentenced to another 30 months in federal prison.

“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer. Utahns must diligently consider investment pitches and their risks before parting with hard-earned savings,” U.S. Attorney John W. Huber said today.

According to the Felony Information, Hales was released from federal prison on Feb. 8, 2018, and resided at a halfway house in Salt Lake City until around Aug. 8, 2018. Nevada Secretary of State records show Sindakit Software LLC was formed on Aug. 6, 2018, by a co-conspirator (CC1) known to federal prosecutors.  CC1 was listed as the sole officer. CC1 was listed on the Sindakit Software bank account as the manager and was the only authorized signor.

The Information alleges Hales and CC1 conspired to defraud investors and potential investors by inducing them to purchase investments in a sports betting software. Hales purported to own a sports betting software that “beat the house” to convince investors to give him money to place sports bets.  In furtherance of the conspiracy, the indictment alleges Hales made a variety of false statements of material facts to investors and potential investors, including representing that 100 percent of investor funds would be used to place sports bets when, in fact, Hales diverted nearly all investor funds received to his and CC1’s personal use, and to make payments to other investors.

Hales also told them he was Chris Christian, when in fact, he was Christopher Hales, a convicted felon on supervised release. Investors were also told Hales would match all investor funds, when in reality he would take out a line of credit with the sports betting website and use the line of credit to hedge bets. Hales also told investors that the sports betting was producing a rate of return for investors of around 10 percent a week – an amount made up by Hales to entice investors to provide funds. He also represented that there were potential buyers willing to purchase the software he developed for tens of millions of dollars, when there were actually no buyers, according to the Felony Information.

In furtherance of the conspiracy, Hales failed to disclose to investors that they did not actually own an algorithm or a sports betting software and that they were laundering investor funds through transfers in and out of the Sindakit Software account.  Sports betting account statements provided to investors were false and were inflated based on Hales’ line of credit and his ability to manipulate the statements.  They also did not disclose that part of the investors’ money was used to pay commissions to those introducing investors to Sindakit or that they were using investment money from newer investors to pay promised winnings to earlier investors in what is commonly recognized as a Ponzi scheme.  

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of IRS Criminal Investigation and the FBI are conducting the investigation.

SALT LAKE CITY – A Park City man, who claimed to have access to millions of N95 masks made by 3M and made allegedly fraudulent representations in an effort to sell them, is charged with wire fraud in an indictment unsealed Tuesday in Salt Lake City.

John Anthony Taylor, 46, did not have the masks, was not an authorized representative of 3M, and attempted to sell the masks to an undercover FBI agent, charging documents allege.

“Rooting out pandemic-related fraud is one the highest priorities for the Department of Justice and my office. Experienced investigators and prosecutors are dedicated to holding accountable those who would use this challenging environment to pad their own pockets,” U.S. Attorney John W. Huber said today.

Taylor is the founder and owner of Positive Marketing, LLC and Wasatch Promotional Products, LLC.  3M Company is Delaware Corporation with its principal place of business in St. Paul, Minn.  3M sells a wide range of products, including N95 masks.

According to documents filed in court as a part of the case, in April 2020, the FBI in Houston, Texas, was contacted by an attorney representing a medical company concerned about an entity purporting to have access to one billion 3M N95 masks. At the time, publicly available information indicated the global production numbers of N95 masks was well below a billion a month.

The FBI opened an investigation that ultimately resulted in an introduction to Taylor in Utah.  According to charging documents, an undercover agent made contact with Taylor and asked for documents proving Taylor actually had the masks. Taylor sent an email with a fake purchase order from 3M.  3M has confirmed it has no relationship with Taylor.

According to the indictment, Taylor made a variety of other alleged false representations as a part of his scheme including:

• He was a representative for the 3M company and was authorized to sell its 1860 N95 masks
• Because of the COVID-19 pandemic, he had recently started to focus on selling masks through his business, Wasatch Promotional Products
• He had contracts for “a million, 30 million, 60 million [masks] for a couple different state governments”
• He had completed several shipments of 3M 8210 masks
• He could broker a deal for 3 million 1860 N95 masks for $5.49 per mask
• He would receive “lot numbers” and show “proof of life” to prove that the order was legitimate
• He had successfully brokered deals with 3M previously
• A purchase order he attached to an email was from 3M 

 
Taylor was initially arrested on a complaint and had an initial appearance in federal court in Salt Lake City on May 4, 2020.  He was released on special conditions of supervised release. He was arraigned on the indictment Tuesday and entered a plea of not guilty to the wire fraud charge. A three-day trial is set for Nov. 23, 2020, before U.S. District Judge David Sam. 

The potential maximum penalty for the charge in the indictment is 20 years in federal prison. Indictments are not findings of guilt.  Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
 
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office in Salt Lake City are prosecuting the case.  Special agents of the FBI in Houston, with the assistance of the FBI in Salt Lake City, are conducting the investigation.

SALT LAKE CITY – A Magna, Utah, man is charged with threatening to assault and murder a Department of Veterans Affairs police officer while he was engaged in the performance of his official duties and with intent to retaliate against the officer on account of the performance of his official duties.  The officer’s teenage daughter found the threat in the victim’s mail box on June 7, 2020.

Ryan David Lucero, 33, is charged with one count of influencing a federal officer by threat in an indictment unsealed Wednesday morning.  He was arrested Tuesday at a home in Magna. The FBI, U.S. Postal Inspectors, U.S. Marshals Service and the Unified Police Department (UPD) executed the arrest warrant.

“Police officers and their families make great sacrifices to keep our communities safe. They have the right to live safely in their own homes, as we all do, and should not have to endure the threat that has been alleged in this indictment. We will bring to justice those who harm or threaten law enforcement officers in violation of federal law,” U.S. Attorney John W. Huber said today.

The alleged threat to the officer came about a week after a May 30, 2020, riot in Salt Lake City destroyed a police vehicle, injured police officers, and damaged the Salt Lake City Police Department building.  Prior to the Salt Lake City riot, the victim in this case wore his VA uniform to and from work. He retired from the UPD two years ago and parked his UPD patrol car in his drive way for many years.

The potential penalty for the charge in the indictment is 10 years in prison.

An initial appearance for Lucero has been set for Friday at 2:30 p.m. before U.S. Magistrate Judge Cecilia M. Romero. Based on current information, federal prosecutors will be seeking detention for Lucero based on a risk of flight. The victim and his family are also concerned about their safety if the defendant is released.

In a filing outlining the United States’ position regarding detention, prosecutors are asking the magistrate judge to consider the defendant’s use of aliases or false documents in previous situations.  In one instance, the defendant provided a false name and date of birth to law enforcement to avoid detection of multiple arrest warrants. He has also failed to appear for court proceedings on several occasions in the Salt Lake valley. 

An indictment is not a finding of guilt.  Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case.  It is being investigated by inspectors with the U.S. Postal Inspection Service and special agents of the FBI.

SALT LAKE CITY – U.S. Attorney John W. Huber announced today that three Utah school districts are receiving funding through the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) School Violence Prevention Program (SVPP). SVPP provides up to 75 percent funding for school safety measures in and around primary and secondary schools and school grounds.

Provo and Nebo school districts are each receiving $500,000 in program grant funding.  The Ogden School District is receiving $393,332. Nationally, the COPS Office awarded nearly $50 million in school safety funding. 

“With the new school year underway, the safety of our nation’s students remains paramount,” said COPS Office Director Phil Keith.  “Although this school year may look different at the start, now is the ideal time to make preparations to enhance school safety for when all of our children are back in the classroom.” 

“This funding will support efforts in these three school districts to significantly improve school safety for children in their communities,” U.S. Attorney John W. Huber. “The school districts can use their funding for a variety of projects that address specific local needs.” 

The Students, Teachers, and Officers Preventing School Violence Act of 2018 (STOP School Violence Act of 2018) gave the COPS Office authority to provide awards directly to states, units of local government, Indian tribes, and public agencies (such as school districts and law enforcement agencies) to improve security at schools and on school grounds in the jurisdiction of the grantee through evidence-based school safety programs. 

The three awards can be used for coordination with law enforcement; training for local law enforcement officers to prevent student violence; metal detectors, locks, lighting, and other deterrent measures; technology for expedited notification of local law enforcement during an emergency; and other measures that provide a significant improvement in security.  The full list of SVPP awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/svpp/Award_List.pdf.

In addition to the school safety grants, the COPS Office School Safety Working Group, which is composed of representatives from eight national law enforcement organizations, has identified 10 essential actions that can be taken by schools, school districts, and law enforcement agencies to help prevent critical incidents involving the loss of life or injuries in our nation's schools and to respond rapidly and effectively when incidents do occur. The Ten Essential Actions to Improve School Safety are applicable to school shootings as well as to other areas of school safety, including natural disasters and traumatic events such as student suicide. Adopting policies and practices based on the recommendations in this publication can help make school communities safer and save lives.

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The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide.  Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 134,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.

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

ST. GEORGE, UT – A St. George man will serve 24 months in federal prison after pleading guilty to wire fraud and money laundering in connection with a financial fraud scheme that took advantage of the trust of a couple who were members of a church congregation he attended. The sentence includes an enhancement for causing substantial hardship to the victim.

U.S. District Judge David Nuffer, who imposed the sentence Thursday, also ordered Gregory Moats Sampson, age 46, to pay $250,000 in restitution to the couple and to serve 36 months of supervised release when he finishes the prison sentence.

“Affinity fraud continues to hurt Utahns. Scammers will use any social connection available to gain your trust and take your money,” said Chris Parker, Executive Director of the Utah Department of Commerce. “We are grateful to the U.S. Attorney’s Office for the cooperative effort with our Division of Securities.”

“Many of our federal fraud prosecutions focus on losses in the millions. With this case, Utah fraudsters should take note of the stiff penalties that await them in smaller cases, as well. There is no sweet spot in fraud loss where schemers can fly under the radar and get away with it,” U.S. Attorney John W. Huber said today.  “Once again, we remind Utah investors to beware of the risks associated with big promises from purported friends and neighbors.”

 According to documents filed in court by federal prosecutors and a plea agreement reached in the case, Sampson met the victims, identified as J.S. and K.S., around 2012 when he was their real estate agent.  J.S. had $250,000 to invest after selling a home in Australia.  Sampson, according to the court documents, told them he had invested funds for others in the past and he could help them invest the $250,000.  

J.S. and K.S. were not sophisticated investors and believed they could trust Sampson based on other relationships they had with them. He told them that by investing with him, they could realize a return of $1 million in 8 to 10 years and that they would receive stock certifications in a company.  He told them that since they were friends, he would not charge them for their investment. 

The victims trusted Sampson and in February 2014, they wrote him a check for $250,000 to Sampson’s business account as an investment for retirement.

Sampson spent the money for his own personal use rather than investing it as promised.  He used $98,320.19 to pay off a personal loan; transferred $82,000 to a company owned by his brother, and transferred $20,000 to a company he owned that had nothing to do with an investment. In fact, Sampson used all of the $250,000 of the victims’ investment within one month, federal prosecutors said.

When the victims sought documentation showing a portfolio of investments, Sampson did not provide any.  However, he consistently told them their investment was performing well.  According to documents filed in court, when J.S. and K.S. eventually confronted Sampson and demanded documentation or their money back, he told them “And you know who gets screwed in the deal?  You do…and it’s not to say that I’m trying to protect my own ass because I’m not going anywhere, I promise you, if I need to disappear, I would have already been gone.  I’ve got enough money that I can disappear if I need to…”  

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case.  Investigators with the Utah Division of Securities investigated the case.

SALT LAKE CITY – A federal indictment unsealed Friday morning charges Nan Ma, 37, of Washington, Utah, with using his position and authority as the officer in charge of production and sourcing at a home audio products company in Hurricane, Utah, to solicit and obtain kickbacks for his personal benefit from Chinese companies. Ma is a Chinese citizen with legal permanent resident status in the United States.

In exchange for the kickbacks, the indictment alleges Ma awarded lucrative contracts to these companies to manufacture and sell products to his employer. Ma used a portion of the kickback money to purchase a luxurious house and expensive cars.   Ma concealed the source of the funds he was getting through the alleged kickbacks by making false representations to his employer, according to the indictment.

Ma received approximately $2.1 million in kickbacks in exchange for awarding approximately $12.4 million in contracts to the Chinese companies, all of which he concealed from his employer, identified in the indictment by the initials SVT, the indictment alleges.

After Ma purchased a home for approximately $450,000, SVT’s CEO, who knew Ma’s salary, asked Ma how he was going to pay for the home.  Ma responded that the money came from his ailing father in China, who was trying to get money out of China to avoid having the Chinese government take it upon his death.  The indictment alleges Ma’s explanation about the source of the funds was false.

The indictment charges Ma with three counts of wire fraud and six counts of money laundering. It also seeks the forfeiture of five properties in St. George and one in Washington along with two vehicles.

According to the indictment, SVT produces home audio products and purchases most of its component parts from suppliers in China.  SVT hired Ma, who has a master’s degree in electronic marketing, in May 2011 as vice president of production/sourcing. His responsibilities included taking SVT’s engineering drawings, ideas, and designs to Chinese factories and obtaining bids from the factories to manufacture SVT’s component parts.  His responsibilities also included establishing and maintain good relationships with Chinese suppliers to ensure SVT obtained quality products and favorable prices, the indictment alleges. 

SVT took steps, including paying $18,000 in legal fees, to help secure Ma’s immigration status so he could live and work in the United States as well as travel to China on behalf of the business.  The company later raised Ma’s salary so he could qualify for a professional work visa, and later petitioned to have Ma’s immigration status adjusted again so he could be a permanent resident immigrant with the designation of “professional holding an advanced degree.”

The indictment alleges that in his capacity as an officer at SVT assigned to establish and maintain relationships with suppliers, Ma owed a fiduciary duty of loyalty to SVT.  The business was entitled to have Ma evaluate and select suppliers without being secretly rewarded for his decision through payments from the suppliers he selected.  It was a violation of Ma’s duty, and of SVT’s right to honest services, for Ma to accept kickback payments from SVT’s suppliers, particularly when Ma was responsible for determining which suppliers SVT would contract with to manufacture its products, the indictment alleges.

The indictment alleges Ma provided personal bank account information to the suppliers he selected, including the seven suppliers identified in the indictment as suppliers A through G, so they could pay him after they received payments for products from SVT.  After receiving funds from the suppliers, Ma transferred the money among various accounts, banks, and investment companies, according to the indictment.

Ma also told suppliers that funds for repairs to products SVT had purchased should be routed to an account he or his wife held. It was contrary to SVT policies for employees to have funds from a supplier sent to personal accounts.

Ma was arrested Thursday.  He had an initial appearance this morning in federal court in St. George.  He is detained pending a detention hearing Wednesday in St. George.

The potential maximum penalty for each of the three wire fraud counts is 20 years in federal prison.  The six money laundering counts each have a potential maximum penalty of 10 years in prison. Indictments are not findings of guilt.  Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case.  Special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and IRS-Criminal Investigation are investigating the case.

SALT LAKE CITY – Man Tat Le, aka Asian Le, pleaded guilty to distribution of methamphetamine Wednesday morning and was sentenced to 84 months in federal prison.  U.S. District Judge Dale A. Kimball imposed the sentence.

Le, 45, of West Valley City, was charged with distribution of methamphetamine in January after law enforcement officers received information indicating Le was engaged in narcotics trafficking.  Special agents of the Utah State Bureau of Investigation (SBI), in conjunction with the FBI’s Safe Street Task Force, conducted a controlled purchase of methamphetamine from Le on Jan. 22, 2020, utilizing a confident human source (CHS). Le sold the CHS approximately 3 ounces of methamphetamine.

Le was arrested in January after leading members of the law enforcement officers on a chase.  A West Valley City police officer tried to pull Le over.  Le sped away from the officer and a 20-minute chase began.  He was taken into custody in Salt Lake City after officers spiked his tires, he crashed his car, and officers captured him as he attempted to flee the scene.

This is Le’s third federal conviction for possession of methamphetamine with intent to distribute. Previous convictions were in June 2012 and September 2018.

Le is affiliated with the Oriental Laotian Gang in Utah. Federal prosecutors, partnering with local, state, and federal law enforcement agencies and county attorneys in Utah, have filed 476 gang cases since January 2018. A substantial majority of these cases include multiple defendants.

“Far too many offenders cannot leave their criminal conduct behind and continue to negatively impact the peace and safety of Utah communities. This conviction and prison sentence will ensure a seven year respite from this offender’s reckless actions that orbit around gang affiliation and drug distribution,” U.S. Attorney John W. Huber said today. “He will be out of our state since there are no federal prisons in Utah, and there is zero chance of parole in the federal system.”

"The public shouldn't have to deal with violent offenders like Man Tat Le, who repeatedly brought dangerous drugs into our communities," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI.  "The purpose of the FBI's Safe Streets Task Force is to keep our communities safe from criminals like Le, who mistakenly believe they are above the law and won't face tough consequences for their crimes."

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case.  Agents and officers with the FBI’s Safe Streets Task Force, Utah SBI, and West Valley City and Salt Lake City police departments are investigating the case.  

SALT LAKE CITY – A Salt Lake City resident pleaded guilty to charges in a five-count Felony Information in U.S. District Court Friday in connection with fraudulent representations he made to get a loan under the Paycheck Protection Program (PPP).

Michael Leroi Douros, 64, was charged with two counts of bank fraud, two counts of making a false statement to a bank, and money laundering in the Felony Information. Douros has a previous felony conviction.

“The President and Congress dedicated taxpayer funds to offer relief and hope during this extraordinarily challenging time for our nation. It is disappointing, to say the least, to see an individual use fraud and selfish motives to acquire hundreds of thousands of dollars,” U.S. Attorney John W. Huber said today.  “This money could have been used to help reduce the strain on other employers and their employees, who would have qualified for the funds.”

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering from the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $249 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized more than $300 billion in additional PPP funding. Convicted felons and their businesses are not eligible to receive PPP loans.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses.  The PPP application process requires applicants to submit an application form through an SBA-approved financial entity.

According to court documents filed as a part of his plea agreement, Douros made false representations to two banks in an effort to get a PPP loan for his business, Epic Rentals UT LLC.  The business was registered with the Utah Division of Corporations on June 5, 2019, with Zach Douros listed as the registered agent.

The false statements included misrepresentations about Epic Rentals’ monthly payroll and the number of employees the business had; claims that his son owned 50 percent of Epic Rentals when, in fact, his son was a straw owner and did not own any portion of the business; and failure to disclose that he had been convicted of a felony in Utah and was on probation in the last five years.

Douros first filled out and submitted an application through Zions Bank.  Zions Bank initially funded the PPP loan of $198,000.  However, upon further inspection of the representations in the loan application, the bank cancelled the loan transfer.  Douros submitted a second PPP loan application through Cache Valley Bank, which was funded at $239,091.67.

The money laundering conviction relates to a $20,000 payroll check made payable to the defendant from an Epic Rentals bank account.

Sentencing in the case will be Nov. 17, 2020, at 2 p.m. before U.S. District Judge Howard C. Nielson Jr.  The potential penalty for the two bank fraud counts and the two false statement to a bank counts is 30 years per count.  The potential penalty for money laundering is 10 years in federal prison.  He faces a potential $1 million fine.   

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case.  FBI special agents are investigating the matter.

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

SALT LAKE CITY – Justin Peck, 47, of Riverton, entered a plea of guilty to one count of operating an unlicensed money transmitting business in federal court in Utah recently, admitting that he owned several companies that were operating as unlicensed money transmitting businesses from as early as 2012 through sometime in 2019.

As a part of a plea agreement reached with federal prosecutors, Peck stipulated that his companies that did not comply with federal law and regulations for money transmitting business registration requirements.

Specifically, Peck admitted he received checks from general contractors for drywall labor.  He cashed those checks and deliver the money to subcontractors or other individuals who were responsible for paying the laborers. For his services, Peck would keep a fee of 6-10% of the contractor’s check.  From 2012 through 2019, Peck transmitted at least $58,248,103.38. 

Investigators believe the purpose of the business was to avoid employment taxes and higher workers compensation premiums.

Peck waived indictment and was charged in a Felony Information filed in July 2020.

Peck earned significant income through his business and failed to report it on his personal taxes. As a part of his plea agreement, Peck agreed to file accurate and complete personal tax returns for the tax years 2012-2017.  He also agreed to forfeit his interest in property.

He faces up to five years in prison when he sentenced Nov. 5, 2020, by U.S. District Judge Howard C. Nielson, Jr. 

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case.  Special agents with IRS-Criminal Investigation are investigating the case.

SALT LAKE CITY – A federal grand jury returned a five-count indictment late Wednesday afternoon charging Timothy Andrew Nemeckay, 60, of Park City, Utah, with securities fraud, making false statements to the Security Exchange Commission (SEC), wire fraud, and money laundering in connection with an alleged fraud scheme.

According to the indictment, Nemeckay was the founder and manager of Mine Shaft Brewing, a Park City business.  The indictment alleges Nemeckay represented to investors that Mine Shaft was raising funds to develop a brewery and restaurant in Park City and later in Santa Clarita, California. Nemeckay collected approximately $2.7 million from approximately 100 investors from across the United States in connection with the Mine Shaft investment offering, the indictment alleges. The indictment alleges the fraud scheme started in early 2013 and continued until around July 6, 2020.

“Far too many Utah headlines report homegrown fraud schemes.  There are  disproportionate numbers of wolves in sheep’s clothing in our state. In this indictment, the alleged offender was even under the thumb of securities regulators when he persuaded investors to pay into his scheme, and he purportedly used investor money to pay off previously ordered restitution,” U.S. Attorney John W. Huber said today. “Once again, we encourage those considering investment opportunities to do their due diligence before handing over their life savings to someone who doesn’t have their interests at heart.”

Nemeckay made a series of representations to investors in connection with the investment offering, including telling them that Mine Shaft was offering Series A Preferred Equity shares totaling $9.4 million and that Mine Shaft had already raised or had sizeable commitments for the funding needed. Investors were told, the indictment alleges, that the minimum investment amount was $20,000 and that the investment would earn 8 percent annual interest.  Investors were also told that Mine Shaft would use funds to acquire and develop a brewery in Park City and that the location would produce thousands of barrels of alcohol for distribution.  He represented that the location would operate as a restaurant and event center and become a top craft brewer in five years and that investors would receive the first right of refusal on additional investment rounds – among other things.

The indictment alleges Nemeckay issued and sent “investor newsletters” to convince investors to invest and that their investments were succeeding. 

In furtherance of the scheme, the indictment alleges Nemeckay also made a variety of other false misrepresentations to investors, including telling them that Mine Shaft was seeking capital to fund the launch of the brewery when, in fact, he was seeking funding for his personal use.  The indictment alleges Nemeckay used approximately $1.7 million of Mine Shaft investor funds for his own personal use.  Less than $550,000 of investment funds were used toward developing a brewery in Park City and later Santa Clarita.

Interest payments were usually not made to investors, the indictment alleges, and when they were, the payments came from new investor money.

The indictment also alleges Nemeckay reported to investors that he had provided information to the SEC regarding his involvement with Mine Shaft’s fundraising efforts and the SEC had expressed no concern.  In fact, he was in violation of State of Utah and federal orders not to participate in the purchase and sale of securities.  Nemeckay was the subject of an administrative action with the Utah Division of Securities for selling unregistered securities.

On July 7, 2014, the defendant entered into a Stipulation and Consent Order with the Utah Division of Securities.  The sanctions barred Nemeckay from associating with a broker-dealer and from being licensed in any capacity in the securities industry in Utah. It also included a fine of $350,000 with $313,710 offset by restitution to investors.

Nemeckay used Mine Shaft investor funds to pay $312,266.47 in restitution following the sanctions by the Utah Division of Securities. 

A summons will be issued for Nemeckay to appear for an initial appearance on the charges. The maximum potential penalty for securities fraud is 25 years in federal prison.  The two counts of making false statements to the SEC and the wire fraud count each carry 20-year potential sentences. The potential penalty for money laundering is 10 years.

Indictments are not findings of guilt.  Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case. Special agents of the Utah Division of Securities and the FBI are investigating the case.  

SALT LAKE CITY – A federal complaint unsealed Wednesday charges a fifth individual with one count of using fire and explosives to damage and destroy a Salt Lake City Police Department patrol car during May 30, 2020, riots in Salt Lake City.  

Larry Raynold Williams, Jr., 22, of West Haven was arrested at his home Wednesday morning on the arson charge by the FBI and members of its Joint Terrorism Task Force.  The Air Force Office of Special Investigations at Hill Air Force Base (HAFB) assisted the FBI.  According to the complaint, Williams is an Airman First Class in the U.S. Air Force.  He is stationed at HAFB in northern Utah.

During the afternoon of May 30, 2020, a peaceful protest in downtown Salt Lake City transitioned into acts of destruction, property damage, arson, and other criminal conduct. During the riot, a Salt Lake City police officer, driving a police vehicle, became boxed-in and immobilized by surrounding protestors.  Fearing for her safety, the officer fled from her patrol car. Her patrol vehicle was subsequently overturned, vandalized, looted, and then set on fire.  Video footage from the event shows individual rioters using fire and explosives to damage and destroy the police vehicle. Federal prosecutors in Utah have filed arson charges against five individuals allegedly responsible for burning the patrol vehicle.

“Since May 30, investigators and prosecutors have engaged in a determined investigation of those who were responsible for burning the police patrol car in downtown Salt Lake City. Our intent has been to bring consequence to the lawlessness that we witnessed. While available video and photographs played a prominent role in the investigation, solid investigative efforts by agents and detectives made the difference in these arrests,” U.S. Attorney John W. Huber said today.

According to the complaint, video footage from the afternoon of May 30, 2020, shows a white male, later identified by law enforcement as Christopher Isidro Rojas, standing next to an African American male.  This individual, subsequently identified by law enforcement as Williams, was dressed in a black Nike hoodie, black Nike sweatpants, black shoes, and a black gas mask.

Rojas was observed holding a blue cigarette lighter in his hands while Williams held a white combustible fabric material, similar to a tablecloth or bedsheet, according to the complaint.  Rojas used the cigarette lighter to ignite the fabric. Once the fabric began to burn, the complaint alleges Williams threw the material into the window of the overturned patrol car.  The burning material landed partially within the interior of the patrol car and partially on the street.

Williams was wearing a gasmask. Investigators subsequently identified the gas mask worn by Williams as an M50 Joint Service General Protective Mask. Clarified photographs of Williams wearing the mask revealed lettering on its attached M61 filter canister, written in what appeared to be white marker, which stated, “TRNG ONLY.” A lot number was also observed on the canister, according to the complaint.

Williams was also observed unmasked at the riot. Law enforcement officers were able to use several photographs to identify Williams.   

Williams was identified as an Airman First Class in the U.S. Air Force, stationed at Hill Air Force Base.  He was issued an M50 gas mask by his unit for training purposes in March 2020. Markings on the mask are consistent with the markings applied at HAFB. On Aug. 13, 2020, the readiness squadron at HAFB conducted a general inventory check of equipment issued to Williams and other members of his group during an exercise.  According to the complaint, serial/lot numbers were documented for each inventoried item.  The lot number for one of the gas canisters assigned to Williams was identical to the number observed on the gas mask as depicted in pictures taken at the riot. 

Williams will make an initial appearance on the arson charge at 3 p.m. Thursday before U.S. Magistrate Judge Dustin Pead.

Federal arson charges in the case are pending against Jackson Stuart Tamowski Patton, 26, Latroi Devon Newbins, 28, Christopher Rojas, 28, and Lateesha Richards, 24,  all of Salt Lake City, who were charged earlier.  Patton and Richards are in custody. Newbins and Rojas have been released on conditions of pretrial release. Previous complaints filed against Patton, Newbins, Rojas, and Richards have been consolidated in a one-count indictment returned by a federal grand jury on July 23, 2020.

Complaints and indictments are not findings of guilt.  Individuals charged in complaints or indictments are presumed innocent unless or until proven guilty in court. Arson carries a potential sentence of 20 years in prison with a minimum-mandatory five-year sentence.   

Assistant U.S. Attorneys from the Utah U.S. Attorney’s Office are prosecuting the case. Investigating agencies include members of the FBI’s JTTF, the Salt Lake City Police Department, the ATF and the Utah Department of Public Safety. 

ST. GEORGE, UT – Lacey Nichole Crawshaw, 33, of St. George will serve 33 months in federal prison after pleading guilty to distribution of fentanyl.  U.S. District Judge David Nuffer imposed the sentence Wednesday in St. George.  Crawshaw will serve 36-months of supervised release when she finishes her prison sentence. There is no parole in the federal criminal justice system.

Crawshaw was charged with distribution of fentanyl after she sold counterfeit Oxycodone 30 mg pills containing fentanyl to a confidential source four times over a one-month period.  Each transaction included 10 to 30 pills.

Fentanyl is a potent synthetic opioid drug approved by the U.S. Food and Drug Administration for use as an analgesic (pain relief) and anesthetic. It is approximately 100 times more potent than morphine and 50 times more potent than heroin, according to a DEA fact sheet.  It is also one of the most dangerous cutting agents used by drug traffickers in making counterfeit pills, including oxycodone pills.  Lacing the counterfeit pill with fentanyl makes the drug cheaper to produce and can generate large profits for drug dealers.  It also increases the risk of overdose and loss of life since users may not know the pill they are buying contains fentanyl.

“Drug dealers in Utah should be on notice. If you deal in fentanyl, you will find yourself in federal prison where there is zero chance for parole. I have directed officers, agents and prosecutors that no case is too small for our review when it comes to fentanyl. It is too deadly of a substance to tolerate,” U.S. Attorney John W. Huber said today.

“This case is a perfect example of teamwork between the Washington County Drug Task Force, the DEA, and the United States Attorney’s Office. By now we’re all aware of the devastating effects fentanyl has on our communities, even in small quantities. This case illustrates the fact that it doesn’t matter the size of the case, we will collectively and tenaciously pursue drug dealers like Lacey Crawshaw,” Sgt. Sean Sparks of the Washington County Drug Task Force said today.

Crawshaw was charged in a four-counts of distribution of fentanyl in an indictment returned by a federal grand jury in December 2019.  She pleaded guilty to one count of distribution of fentanyl in a plea agreement reached with federal prosecutors in April.

As a part of the plea agreement, Crawshaw, also known as Lacey Nichole Crawshaw-Leavitt and Lacey Nichole Crawshaw-Chavarria, admitted that on Sept. 24, 2019, she knowingly and intentionally distributed fentanyl.  A Utah Bureau of Forensic Services senior forensic scientist determined that the tablets containing fentanyl that she distributed weighed approximately 3 grams. The plea agreement also included an understanding that relevant conduct that was either not charged or not included in the plea agreement could be taken into consideration by the court in determining a sentence in the case.

Assistant U.S. Attorneys from the St. George office of the United States Attorney’s Office prosecuted the case.  The case was investigated by members of the Washington County Drug Task Force and special agents with the DEA.

SALT LAKE CITY – A federal complaint unsealed Tuesday charges a fourth individual with one count of arson for using fire to destroy a Salt Lake City Police Department vehicle during May 30, 2020, riots in Salt Lake City.

An arrest warrant was issued for Lateesha Richards, also known as Lateesha Kahryn Ritchards, 24, of Salt Lake City on June 18, 2020. While she has yet to turn herself in to the U.S. Marshals Service, she appeared via Zoom with her attorney for an initial appearance Wednesday afternoon.  U.S. Magistrate Judge Jared Bennett found her to be a danger to the community and ordered her detained pending trial.  He ordered her to turn herself in by Friday morning.            

During the afternoon of May 30, 2020, a peaceful protest in downtown Salt Lake City transitioned into acts of destruction, property damage, arson, and other criminal conduct. During the riot, a Salt Lake City police officer, driving a police vehicle, became boxed-in and immobilized by surrounding protestors.  Fearing for her safety, the officer fled from her patrol car. Her patrol vehicle was subsequently overturned, vandalized, looted, and then set on fire.  Video footage from the event shows individual rioters using fire and explosives to damage and destroy the police vehicle.

At the detention hearing Wednesday afternoon, federal prosecutors told the court that approximately 200 rounds of ammunition for a handgun and 90 rounds of rifle ammunition were in the car when the officer was forced to it. Video shown as evidence during the detention hearing shows the ammunition exploding during the fire.

Federal authorities are filing arson charges against those allegedly responsible for burning the patrol vehicle.

Video footage from the riot shows an individual, later identified by police as Richards, holding a cell phone in her right hand as she walks toward the overturned police car. Richards is then observed taking a selfie with the burning police car as the background. Richards walked away from the patrol car momentarily and then returned to the patrol car holding what appears to be an item of clothing in her right hand. The complaint alleges she bent down facing the burning patrol car and tossed the item onto the small flames before running away.

The complaint alleges the clothing item Richards threw onto the fire acted as kindling and increased the size of flames.  Shortly after, the vehicle becomes engulfed in flames. According to the complaint, Richards returned to the area with Latroi Newbins, another defendant in the arson case, to take more selfies with the burning police car in the background. Law enforcement officers identified Richards based on her driver’s license photo, a booking photo, and a neck tattoo, according to the complaint.  

Federal arson charges in the case are also pending against Jackson Stuart Tamowski Patton, 26, Latroi Devon Newbins, 28, and Christopher Rojas, 28, all of Salt Lake City, who were charged earlier.  Patton remains in custody. Newbins and Rojas have been released on conditions of pretrial release. In addition to complaints filed in the case, Patton, Newbins, Rojas and Richards are charged with arson in a one-count indictment returned by a federal grand jury on July 23, 2020. 

Complaints and indictments are not findings of guilt.  Individuals charged in a complaint or indictment are presumed innocent unless or until proven guilty in court. Arson carries a potential sentence of 20 years in prison with a minimum-mandatory five-year sentence.    

Assistant U.S. Attorneys from the Utah U.S. Attorney’s Office are prosecuting the case. Investigating agencies include members of the FBI’s JTTF, the Salt Lake City Police Department, the ATF and the Utah Department of Public Safety. 

ST. GEORGE, UT – A former Kane County resident, who solicited money from victims with fraudulent promises that he was on the verge of receiving hundreds of millions of dollars – even billions – and would be able to pay a large return on their investment, will be arraigned Thursday morning in federal court in St. George.

Kurt Jurgens Bauer, 56, who has also lived in Las Vegas, is charged with three counts of wire fraud and two counts of false impersonation of an employee of the United States in a recently unsealed indictment.  The arraignment will be at 9 a.m. before U.S. Magistrate Judge Paul Kohler in St. George.  Bauer is in custody.  His continued detention status will also be considered during the Thursday hearing.

“This case involves a defendant who allegedly exploited the trust of hardworking and honest people, including elderly citizens of Southern Utah and Nevada,” U.S. Attorney John W. Huber said. “We prioritize investigations and prosecutions involving elderly victims. As I’ve said before – we revere our elders, we do not defraud them,” U.S. Attorney John W. Huber said today. “This case is also a priority for us because it includes allegations Bauer impersonated federal judges and a federal court administrator as a part of his fraud scheme.”

“Kurt Bauer is suspected of preying on some of the most vulnerable people in our community. We take fraud violations seriously, especially when these crimes are committed against the elderly who tend to be more trusting of such schemes. We will continue to work with our partners in the FBI and US Attorney’s Office to aggressively pursue, investigate and prosecute cases like the one involving Kurt Bauer,” Kane County Sheriff Tracy Glover said today.

“Kurt Bauer’s alleged crimes were based on lies that he perpetuated for many years,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI.  “The hundreds of thousands of dollars he’s accused of swindling from his victims, including the elderly, didn’t go toward legitimate investments, but to pay his bills. While the victims may never see their money again, we hope the hard work of investigators and prosecutors sends a message that ultimately, crimes like this don’t pay.” 

According to the indictment, beginning in 2011 and continuing until April 2020, Bauer devised an advance-fee scheme to solicit money from victims using a variety of what the indictment alleges were fraudulent representations and promises.

Bauer told victims that the United States District Court for the District of Nevada had frozen funds due to him, according to the indictment.  Bauer told victims that the court required “bond” payments to secure the frozen funds, and he solicited victims to make the payments – often on a weekly basis, the indictment alleges.  Bauer had various explanations for the court’s action.

Bauer represented to victim investors that the court was going to release funds to him in the near future.  Once the funds were released, the victims would receive large returns in exchange for their upfront payments.

In reality, Bauer fabricated the information he provided to victims about his wealth and the court process to release funds.  Bauer has relatively little wealth, the indictment says, apart from money he took from victims.  He had no prospect of receiving large amounts of money and no court was holding money Bauer was entitled to.  And, the indictment alleges, Bauer had no way of paying victims the promised returns.

The victims’ bond payments were not sent to a court, the indictment alleges.   Bauer spent the money on himself including paying hotel bills, credit card payments, and restaurants, among other things.

The indictment alleges Bauer received more than $300,000 from victims, including at least $200,000 from victims identified as C.B., age 82, and L.B., age 80, in the indictment.

To further the scheme, Bauer created false identities of a New York attorney, a federal court employee, and a billionaire that he used to make misrepresentations to and solicit payments from victims.  The indictment alleges he created phone numbers and email accounts for the false identities. Communications between the victims and the false identities were actually between the victims and Bauer or one of his accomplices.

In furtherance of the scheme, Bauer and his accomplices impersonated federal judges and a federal court administrator during communications with victims to convince them the court process was real and to persuade victims to continue making payments.

Bauer was arrested following the return of the sealed federal indictment in late July.  He had an initial appearance on the charges July 30, 2020, in federal court in St. George.

He faces up to 20 years in federal prison for each count of wire fraud and up to three years for each count of false impersonation of an employee of the United States if convicted of the charges.  Indictments are not findings of guilt.  Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys in the U.S. Attorney’s Office in St. George and Salt Lake City are prosecuting the case.

U.S. Attorney Huber expressed appreciation for the significant investigative efforts of the FBI and the Kane County Sheriff’s Office, who are assisting with the case.