District of Utah

“The emergency prohibition of fentanyl analogues expires on February 6 without congressional action.  Fentanyl and its analogues are responsible for dozens of overdose deaths in Utah.  Without action by Congress, my partners and I will not have the tools we need to protect Utah families from the onslaught of these extraordinarily dangerous substances. 

“We have seen a transition in the source of fentanyl finding its way into Utah communities.  Initially, law enforcement officers found fentanyl from China in relatively small amounts in Utah. 

“In a dangerous turn of events, law enforcement officials are now intercepting load after load of Mexican cartel-produced fentanyl.  The cartels are using their established and prolific distribution networks to deliver fentanyl – a substance that is exponentially more dangerous than both methamphetamine and heroin. We continue to be very aggressive in prosecuting these cases.

“I am urging Congress to give us the tools we need to continue our efforts against the distribution of fentanyl and its analogues here in Utah.  This fight is far from over.  We need every tool we have to target this dangerous drug. Congress must take action immediately to extend the scheduling of these dangerous substances.”

 

Background:  In an effort to combat this deadly drug epidemic, DEA issued a temporary emergency two-year order in February 2018 that made all fentanyl-related substances illegal.  Our country has seen a marked supply impact from DEA’s temporary scheduling of fentanyl-related substances during the past two years, with a 50 percent decrease in fentanyl-related substances encountered across the United States.  However, DEA’s emergency authority expires at midnight on February 6, 2020, unless Congress acts to extend it.

 

 

SALT LAKE CITY -- U.S. Attorney John W. Huber announced Wednesday that $16,113,273.52 in criminal and civil actions was collected in Utah during fiscal year 2019, which ended Sept. 30, 2019.

Of this amount, $5,937,820.86 was collected in criminal cases and $10,175,452.66 through civil actions. 

Additionally, the U.S. Attorney’s Office in Utah worked with other U.S. Attorneys’ Offices and components of the Department of Justice to collect an additional $2,020,570.97 in cases pursued jointly by these offices. Of this amount, $3,450 came from criminal cases and $2,017,120.97 through civil actions.              

“The money we have collected is used to provide restitution to victims of federal crimes and support important victim assistance programs,” Huber said today.  “These funds also come from divesting criminals of the proceeds of their illegal conduct.”

Collections this year included the Lyle Jeffs case, where $99,216.53 in forfeited assets were applied to Jeffs’ $1 million restitution judgment in March 2019 in favor of the U.S. Department of Agriculture. Another defendant voluntarily paid $449,571.19 in February 2019 in full satisfaction of his restitution debt.                                       

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department of Justice’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

Additionally, the U.S. Attorney’s Office in Utah, working with partner agencies and divisions, collected $1,517,673 in asset forfeiture actions in FY 2019.  Forfeited assets deposited into the Department of Justice’s assets forfeiture fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

 

SALT LAKE CITY – Brenton Michael Forney, 28, of Salt Lake City, the lead defendant in a federal drug case targeting a significant drug trafficking organization distributing methamphetamine, heroin, and fentanyl in Utah communities, will serve 276 months in federal prison.           

Forney pleaded guilty in October to one count of possession of methamphetamine, heroin, and fentanyl with intent to distribute. As a part of the agreement with federal prosecutors, Forney admitted that in October 2018, he was in possession of the controlled substances and intended to sell them. The drugs, seized following the execution of a search warrant, were tested and determined to be approximately 12,591.5 grams of actual methamphetamine, approximately 6,000 grams of a mixture containing methamphetamine, approximately 10,054 grams of heroin, and approximately 1,789 grams of fentanyl.

“The women and men of Utah law enforcement dismantled a prolific drug trafficking operation,” U.S. Attorney John W. Huber said today. “They significantly slowed the flow of extraordinarily dangerous substances into our neighborhoods, such as fentanyl, heroin and methamphetamine. I am confident that this operation, and others like it, helped saved Utah lives.”

U.S. District Judge Jill N. Parrish imposed the sentence Tuesday afternoon in federal court. The sentencing guideline range for Forney was life in federal prison with a 25-year mandatory minimum sentence given the quantity of drugs involved and two previous convictions for drug trafficking. The plea agreement included a stipulated sentence of 23 years. Forney will forfeit $491,674.52 in cash and five firearms and associated ammunition as a part of the resolution of the case. 

Forney and six other defendants were charged with conspiracy to distribute controlled substances, two counts of possession of a controlled substance with intent to distribute, four counts of possession of a firearm by a restricted person, one count of possessing a firearm in furtherance of a drug trafficking crime, one count of carrying a firearm during and in relation to a drug trafficking crime, eight counts of distribution of a controlled substance, 19 counts of use of a communication facility in a drug trafficking offense, and one count of structuring in a superseding indictment returned in November 2018.

During the investigation of the case, approximately 47 pounds of methamphetamine, 26.4 pounds of heroin, 4.4 pounds of a mixture or substance containing a detectable amount of fentanyl, and eight guns were seized.

At sentencing, Assistant U.S. Attorney Michael Kennedy said prosecutors learned that in the aftermath of Forney’s arrest and the seizure of his drugs, there was a significant decline in the availability of illegal drugs in the Salt Lake Valley for months afterward. 

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case.  Officers and agents with the DEA Metro Narcotics Task Force, Layton Police Department, and the Davis Metro Narcotics Strike Force investigated the case. 

 

SALT LAKE CITY – Elet Neilson, age 53, of Layton, a former emergency room nurse who admitted to tampering with controlled substances intended for patients and diverting the drugs for her own use, will serve 60 months in federal prison.  U.S. District Judge Dee Benson imposed the sentence Monday afternoon in Salt Lake City.

As a result of the tampering and diversion, Neilson admitted infecting seven (known) patients with Hepatitis-C 2B. Hepatitis C, which is a viral disease, is primarily transmitted through blood exposure.  There are different genotpyes. One variant, Hepatitis-C 2B, makes up only 8 to 10 percent of all Hepatitis C found in humans in Utah, according to the indictment filed in the case. 

Federal prosecutors had asked Judge Benson to impose a sentence of 90 months.  “This is more than a mistake.  Punishment and general deterrence should be the driving force in fashioning a sentence today,” Assistant U.S. Attorney Sam Pead said. Judge Benson’s sentence of 60 months was three months below the sentencing guideline range in the case of 63-78 months.  The court found she abused a position of trust in imposing the sentence.

“As sad as addiction may be, it is not without victims. This case illustrates addiction’s wake of tragedy like few others,” U.S. Attorney for Utah John W. Huber said today. “At least seven unwitting and innocent victims were in vulnerable positions when the nurse defendant recklessly exposed them to, and infected them with a serious and stigmatizing disease. These convictions represent knowing and intentional conduct that went well beyond an unwise decision made amidst addiction.”

“Patients deserve to have confidence that they are not only receiving the proper treatment from those entrusted with providing their medical care, but also that they are not being placed at an increased risk of harm,” said Special Agent in Charge Charles L. Grinstead, of the Food and Drug Administration’s Office of Criminal Investigations, Kansas City Field Office.  “We will continue to protect the public health and bring to justice health care professionals who take advantage of their unique position and compromise their patients’ health and comfort by tampering with needed drugs.”

Between July 2013 and November 2014, Neilson was employed at McKay-Dee Hospital in Ogden, Utah. As a nurse, Neilson had access to controlled substances, including medication intended for patients in the emergency room. As a part of a plea agreement reached in September 2019, Neilson admitted that on multiple occasions, she tampered with hydromorphone and morphine, diverting the drugs for her own use.

According to the plea agreement, Neilson admitted that by tampering, diverting, and using the drugs, she acted with reckless disregard for the risk to other people, including placing people in danger of death or bodily injury, and did so under circumstances that manifested extreme indifference to that risk.           

In late 2014, according to charges filed in the case, the U.S. Center for Disease Control and the Utah Department of Health began an investigation into a cluster of Hepatitis C 2B diagnoses in the Ogden region, which eventually focused on patients seen in the emergency room at McKay-Dee Hospital while Neilson was working there. The investigation ultimately determined that seven patients, each of whom were given intravenous opioid pain management drugs handled by Neilson before or during their administration, were infected with not only the same genotype of Hepatitis-C 2B as Neilson, but the same sub-genotype.

“Neilson, a medical professional, diverted drugs for her own use, and as a result infected her patients.  For that she will rightly be punished,” said Curt L. Muller, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services, Kansas City Region. “Along with our law enforcement partners, protecting patients is our top priority.”

“When professionals in positions of trust, abuse that trust by engaging in the diversion of controlled substances, it is extremely disappointing. Anyone who deliberately diverts and tampers with controlled substances causing harm to patients, has violated their duties as a professional and will be held accountable,” said Acting Assistant Special Agent in Charge of the DEA Salt Lake City District Office Miguel Chino.  “The charge and plea agreement in this case are the result of DEA’s continued commitment to work with our law enforcement partners and hold accountable those who participate in illegally diverting controlled substances in our communities. It also is a testament to law enforcement’s commitment to fight the illegal diversion of these drugs.”

"Medical professionals are entrusted with the care of others.  Elet Neilson betrayed that trust and in turn, put her patients' health and lives at risk," said Special Agent in Charge Paul Haertel of the FBI's Salt Lake City Field Office.  "The FBI would like to thank our law enforcement partners for their dedication and persistence in a case that should serve as an example that such reckless behavior within our nation's health care system will be aggressively investigated and prosecuted."           

“The mission of the Medicaid Fraud Control Unit (MFCU) in the Utah Attorney General’s Office is to protect vulnerable individuals from harm.  The victims in this case went to the hospital for treatment, trusting that they would be safe and cared for.  Instead, because of the defendant’s actions, the victims came out of the hospital with life-changing diseases.  The MFCU is proud to have been part of a team that brought this nurse to justice and gave a voice to each victim,” Kaye Lynn Wootton, MFCU Director, said today.

Neilson will be on supervised release for two years when she finishes her federal prison sentence.  Special conditions of the supervised release include drug/alcohol and mental health treatment. She must pay a $400 special assessment fee.  The court ordered Neilson to self-surrender to the U.S. Bureau of Prisons (BOP) to begin serving the sentence no later than March 2 at noon.  BOP will designate a prison in the coming weeks.

SALT LAKE CITY – A federal jury convicted Gary Mark Hill, age 42, of Salt Lake City of unlawfully engaging in the business of importing and dealing machine guns and illegal possession and transfer of machine guns Wednesday afternoon following a four-day trial in U.S. District Court in Salt Lake City.

The jury deliberated less than two hours before returning the verdict.

A two-count indictment returned in May charged Hill with knowingly engaging in the business of importing and dealing in firearms – specifically machine gun conversion devices for Glock handguns without having paid a special occupational tax required and without having registered, both required under federal law.

The indictment alleged that from about February 2017 through March 2017, Hill knowingly possessed and transferred the machine gun conversion devices to others. The machine gun conversion devices, known as Glock auto switches, are machine guns under federal law because they are parts designed solely and exclusively for the purpose of converting a semi-automatic handgun into a machine gun.

“The defendant purchased machine guns at bargain prices from China, and knowingly sold them on Utah’s street corners at a steep markup,” U.S. Attorney John W. Huber said today. “In this day and age, there are few transactions more dangerous than an anonymous and unregulated exchange of cash for machine guns.  This intentional conduct showed a reckless disregard for our safety at its best, and certainly exposed Utah to risks that the community should not have to bear. The jury had little difficulty in holding the defendant accountable.”

Evidence at trial showed that Hill, a former investment banker, sold multiple illegal machine gun conversion devices for Glock handguns to three undercover ATF agents on February 27, 2017, March 1, 2017, and March 8, 2017. During the execution of a search warrant, agents found five additional machine gun conversion devices in his residence and six conversion devices in his car.

U.S. District Court Judge Dale A. Kimball set sentencing in the case for March 5, 2020.  Hill faces up to 10 years in federal prison for each of the two counts of conviction.  Hill will remain out of custody and subject to supervision on conditions of release pending sentencing.

Assistant U.S. Attorneys in Salt Lake City prosecuted the case.  The ATF investigated the case.

 

SALT LAKE CITY – A complaint signed by a federal magistrate judge Monday morning charges Edward Jose Peralta-Moran, age 19, of Taylorsville with possessing a firearm following a felony conviction and possession of a stolen firearm. Ramon Avila, age 22, of Salt Lake City is charged with possession of a stolen firearm.

Based on an analysis of the ballistic evidence using the National Integrated Ballistics Information Network (NIBIN), Utah Bureau of Forensic Services analysts linked casings recovered from a drive-by shooting in Taylorsville on Sept. 3, 2019, to a .45 caliber Smith and Wesson firearm recovered from Peralta-Moran.   The U.S. Department of Justice Project Guardian initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.

NIBIN is a database system that captures, stores, and correlates digital images of spent cartridge casings recovered from crime scenes and test-fired firearms.  The Utah Crime Gun Intelligence Center uses NIBIN technology to assist law enforcement agencies in solving firearms crimes. So far this year, 1,644 NIBIN entries have been entered in Utah.  This figure includes 1,100 firearms and 544 casings from shooting scenes submitted by 38 different Utah law enforcement agencies.  The entries have resulted in 69 “hits” involving 170 cases.

According to the complaint, Unified Police Department (UPD) officers responded to a drive-by shooting at a home in Taylorsville, on Sept. 1, 2019. Officers observed bullet entry points on the exterior of the home and collected six 9 mm shell casings. They were unable to identify anyone involved in the shooting.

Two days later, on Sept. 3, 2019, a UPD officer heard what sounded like gunfire in the area of 4700 South and 2700 West and observed a car leaving the area and entering I-215. According to the complaint, about the same time dispatch started receiving emergency calls reporting shots fired at the same residence as the Sept. 1, 2019, incident. Responding officers observed numerous new bullet entry points on the exterior of the home and collected six expended .45 caliber shell casings and a .223 projectile, but were unable to locate any suspects.

One occupant of the home told officers he had been in a recent confrontation with an individual.  He identified the individual for the officer.  The information pointed officers to Peralta-Moran, a known Sureno-affiliated convicted felon. Peralta-Moran was on state probation and had an outstanding arrest warrant.

On Sept. 4, Sandy City police officers responded to a report of firearms thefts at The Amory Firearms and Shooting Range, a Federal Firearms Licensee. The manager told them three males entered the business and stole three handguns while he was speaking to another customer.  According to the store manager, the individuals took a Glock 17 handgun with a green slide  from behind the sales counter and a Glock 19 handgun from the manager’s office.  (Only two of the three stolen firearms are related to charges included in this case.) 

Viewing store surveillance video, officers observed the three males enter The Armory and go to different areas in the store.  The video shows them taking guns from behind the counter and from the store manager’s office.  The three left in a vehicle described by the store manager as a silver or blue Lexus with “In God We Trust” on the license plate.  The store manager was able to provide the officers with a partial plate number, according to the complaint.

UPD officers looking for Peralta-Moran on Sept. 5, 2019, observed a Lexus sedan similar to the description of the passenger car leaving the scene of the Sept. 3, 2019, drive-by shooting.  Officers executed a traffic stop.  According to the complaint, as the vehicle pulled into a residential driveway, officers heard the distinctive sound of a metal object hitting the pavement. 

Avila was driving the car and Peralta-Moran was a passenger in the front seat. Officers located a .45 Smith and Wesson handgun on the ground adjacent to the passenger side of the vehicle and found a Glock 17 handgun with a green slide under the front portion of the driver’s seat, similar in description to one of the guns stolen from The Armory. The license plate on the car matched the description given by the store manager.

According to the complaint, Peralta-Moran told officers he paid someone to shoot up the house on Sept. 3, 2019.  He also admitted the Lexus was used in the Sept. 3 shooting and the .45 Smith and Wesson officers found on the pavement on the passenger side of the Lexus was used in the drive-by shooting.  Officers executed a search warrant at Peralta-Moran’s residence and found a Glock 19 handgun concealed in his bed – one of the handguns stolen from The Armory.

Peralta-Moran is appearing Wednesday morning on the charges in the complaint.  A warrant is pending for Avila.  Both defendants face a potential 10-year statutory sentence, a fine of $250,000, and a three-year term of supervised release if convicted of the charges in the complaint. Defendants charged in complaints 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.  Officers from the UPD and Sandy City Police Department and special agents from the ATF are investigating the case.  The Utah Crime Gun Intelligence Center is also contributing to the investigation.

SALT LAKE CITY –Thomas Fairbanks, age 66, of Logan, Utah, who faces a five-count indictment alleging he devised schemes to defraud investors, including a vulnerable adult, will be in federal court Dec. 5, 2019, at 10:15 a.m. for an initial appearance.  The indictment alleges Fairbanks devised a scheme to defraud investors using materially false and fraudulent pretenses, representations and promises, and omissions of material facts.

As a part of the scheme, Fairbanks earned the trust of a vulnerable older adult, identified as B.D. in the indictment, and diverted at least $462,000 of her money for his personal use and benefit.  B.D. is unmarried, has no children, and is in her 80s.

According to the indictment, Fairbanks was the founder and CEO of SupplyLine Partners, an unregistered business. The company maintains a website, which purports to provide marketing, administrative, and other business support services.  It has never been registered to issue securities, the indictment alleges.  Fairbanks is involved in other business entities.

Fairbanks offered and sold an investment opportunity in SupplyLine to B.D. and a couple, identified as J.H. and R.H., in the indictment.  Fairbanks accepted $45,500 in cash from these victims, promising them a 6 percent return – or their money back. According to the indictment, investment contracts are securities.

Fairbanks made a number of misrepresentations to the investors, including telling them assets of other business collateralized their investment, they could liquidate their investments at any time, they would receive an accounting of their investment, and the funds would go toward SupplyLine’s business efforts – among other things.

In an effort to induce further investments, the indictment alleges Fairbanks began giving investment and financial advice to B.D.  B.D. opened a joint personal checking and savings account with Fairbanks using her money.  The indictment alleges B.D. believed Fairbanks would help manage her finances, deal with her finances in her best interest, not put her money at substantial risk, and help her write checks. The $462,000 he diverted from B.D.’s account is in addition to the $40,000 she invested in SupplyLine.

Fairbanks utilized his interests in other business entities to receive the misappropriated funds, the indictment alleges.

Combatting financial fraud targeted at seniors is a key priority of the U.S. Department of Justice and the U.S. Attorney’s Office in Utah. Together with federal, state, local and tribal partners, the Department of Justice and U.S. Attorney’s Office are committed to combatting financial exploitation through enforcement actions, training and resources, research, victim services, and public engagement efforts.  The U.S. Attorney’s Office in Utah recently collaborated with the Utah Division of Aging and Adult Services to provide training on financial fraud and elder abuse for more than 100 law enforcement officers in Utah.

Fairbanks faces up to 20 years in prison for each of the wire fraud counts (two counts), up to five years for each count of securities fraud (two counts), and up to 10 years for the money laundering count.  Indictments are not findings of guilt.  Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys from the U.S. Attorney’s Office are prosecuting the case.  The Utah Division of Securities along with special agents of the FBI are investigating the case.

 

WASHINGTON, D.C. -- Today, Attorney General William P. Barr announced the launch of Project Guardian, a new initiative designed to reduce gun violence and enforce federal firearms laws across the country. Specifically, Project Guardian focuses on investigating, prosecuting, and preventing gun crimes.

Reducing gun violence and enforcing federal firearms laws have always been among the Department’s highest priorities. In order to develop a new and robust effort to promote and ensure public safety, the Department reviewed and adapted some of the successes of past strategies to curb gun violence. Project Guardian draws on the Department’s earlier achievements, such as the “Triggerlock” program, and it serves as a complementary effort to the success of Project Safe Neighborhoods (PSN). In addition, the initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.

“Gun crime remains a pervasive problem in too many communities across America. Today, the Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian,” said Attorney General William P. Barr. “Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”

“Project Guardian has our full support. The Attorney General is exercising strong leadership in focusing on ways to reduce gun violence in our communities,” John W. Huber, U.S. Attorney for Utah,  said today.. 

“This initiative will enhance our long-running strategies that have proven successful in fighting violent crime in Utah.  We vigorously enforce federal firearms laws, maximize partnerships throughout the state, and use cutting edge technology in the Utah Crime Gun Intelligence Center to hold offenders accountable and prevent violence in the first place,” Huber said.

“ATF has a long history of strong partnerships in the law enforcement community,” said Acting Director Regina Lombardo. “Make no mistake, the women and men of ATF remain steadfast to our core mission of getting crime guns off of our streets. ATF and U.S. Attorneys nationwide will leverage these partnerships even further through enhanced community outreach initiatives and coordination with local, state, and tribal law enforcement and prosecutors to cut the pipeline of crime guns from those violent individuals who seek to terrorize our communities. Project Guardian will enhance ATF’s Crime Gun Intelligence, to include identifying, investigating and prosecuting those involved in the straw purchases of firearms, lying on federal firearms transaction forms, and those subject to the mental health prohibition of possessing firearms.” 

Project Guardian’s implementation is based on five principles:

1. Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
    
2. Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
    
   Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.
    
3. Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
    
4. Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS. ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety. 
    
   Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm. United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health.
    
5. Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology. These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.
    

Federal law enforcement represents only about 15% of all law enforcement resources nationwide. Therefore, partnerships with state, local, and tribal law enforcement and the communities they serve are critical to addressing gun crime. The Department recognizes that sharing information with our state, local, and tribal law enforcement partners at every level will enhance public safety, and provide a greater depth of resources available to address gun crime on a national level.

SALT LAKE CITY – Four indictments unsealed in U.S. District Court Monday afternoon allege several trucking companies in Utah paid more than $1 million in bribes to the Utah FedEx Ground hub manager as a part of a scheme to exploit the employee’s position within FedEx Ground (FXG) to make the trucking businesses as lucrative as possible. Ten individuals are charged in the indictments.

            Announcing the indictments today are U.S. Attorney for Utah John W. Huber, Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office, Special Agent in Charge Tara Sullivan of IRS-Criminal Investigation, Special Agent in Charge Jeffrey Dubsick of the U.S. Department of Transportation Office of Inspector General, and Michael Mentavlos, Special Agent in Charge of the Defense Criminal Investigative Service’s Southwest Field Office. 

            According to charging documents, FXG operates approximately 39 hubs or distribution centers to move packages around the country. One of the hubs is located in North Salt Lake City in Utah. FXG contracts with local trucking companies to transport packages on behalf of the company. Ryan Lee Mower, age 47, of Bountiful, was FXG’s highest-ranking employee in Utah from at least 2008 to October 2019. His primary responsibilities included overseeing the FXG contract service providers and ensuring that each local trucking company complied with FXG policies and regulations.

            One of the four indictments, for example, alleges that by fraudulently obtaining runs, allowing unauthorized runs to continue, boosting miles and receiving payment for “ghost runs,” falsely reporting accidents, and falsely reporting miles to gain income – among other things, five co-conspirators received approximately $150 million in FedEx Ground revenue and paid $300,000 in bribes to Mower.             

            “Fair play, honest dealings, and transparency are core values in the American business landscape. Bribery and corrupt practices are not,” said U.S. Attorney John W. Huber. “The conduct alleged in the indictment not only runs counter to societal expectations for American business, it runs afoul of the laws of the United States. The alleged unjust enrichment comes at the expense of those who play by the rules in the market place.”

            "These individuals allegedly exchanged bribes for business opportunities, and, as a result, lined their pockets with hundreds of millions of dollars spent on property, luxury cars, and other extravagances," said Paul Haertel, Special Agent in Charge of the FBI's Salt Lake City Field Office.  "The FBI will never turn a blind eye to those who operate fraudulently because legitimate businesses should be allowed to compete on fair and level playing fields.  The FBI is thankful for the collaboration of our law enforcement partners and the cooperation of FedEx to secure these indictments and arrests."

            Tara Sullivan, Special Agent in Charge for IRS-Criminal Investigation said, “Ryan Mower allegedly received more than $1million in illegal income, which he did not claim on his tax returns, by taking bribes to provide an unfair advantage to other trucking companies. IRS Criminal Investigation is proud to assist its law enforcement partners in utilizing our unique financial investigative experience.”

            “Maintaining public safety on our nation’s highways is paramount to protecting our families our economy and our way of life,” stated Jeffrey Dubsick, regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General. “Motorists expect and deserve the highest standards of safety from trucking companies whose business is transporting goods on taxpayer-funded roads.  The arrests in this case demonstrate our commitment to protecting the traveling public from commercial operators allegedly content with placing profit over public safety through actions that undermine important DOT regulations.”

"The Defense Criminal Investigative Service (DCIS) will aggressively pursue allegations of fraud and corruption impacting the Department of Defense (DoD)," stated Michael Mentavlos, Special Agent in Charge, Southwest Field Office.  "Along with our Law Enforcement partners, DCIS is committed to safeguarding the integrity of precious taxpayer resources and will exhaust all appropriate criminal, civil and administrative actions against those individuals that choose to defraud the government and the DoD." 

U.S. v Tuchinsky, Mower, et al

            Six individuals are charged in one indictment with 16-counts of wire fraud conspiracy, promotional money laundering, and money laundering in connection with a 10-year conspiracy the indictment alleges started in 2009.

            Charged in this indictment are Yevgeny Felix Tuchinsky, age 59, who has resides in Salt Lake City and San Diego, Alexsander Vasiliyevich Barsukov, age 52, of Salt Lake City, Konstantin Mikhaylovich Tomilin, age 50, who has homes in Salt Lake City and Pennsylvania, Leonid Isaakovich Teyf, age 58, of Raleigh, North Carolina, Felix Tsipelzon, age 48, of South Jordan, and Mower.    

            Five of the defendants were involved in some way with Salt Lake Trucking Group (SLTG).  SLTG Ground is comprised of several trucking companies that contract to carry packages for FedEx Ground. 

            The indictment alleges the co-conspirators used Mower’s position to game FXG’s process governing the awarding of new runs and that Mower helped the co-conspirators grow their business larger than FXG allowed by submitting false information to FXG. Using Mower’s position, the co-conspirators falsified mileage reports and, on occasion, Mower would inflate or boost the number of weekly miles driven by one or more of the co-conspirators’ companies.  Additionally, the trucking companies received payments from FXG for “ghost routes” never actually run by a trucking company, the indictment alleges. 

            The Salt Lake Trucking Group received about $150 million in FXG revenue during the approximate 10-year period of the conspiracy. During that same period, the indictment alleges the co-conspirators paid approximately $300,000 in bribes to Mower.           

US v Ugarte and Mower      

            Hubert Ivan Ugarte, age, 52, of Draper and Mower are charged with four counts of wire fraud and six counts of money laundering in connection with the alleged bribery scheme.  Ugarte owned and operated several trucking companies. 

            The indictment alleges that by fraudulently obtaining assigned runs, obscuring business ownership and growth, covering up failed contractual performances, and falsely reporting miles to gain unearned income, Ugarte’s companies received approximately $90 million in FXG revenue over the past eight years and paid Mower at least $490,000 in bribes, according to the indictment.   

US v Kovacevic, Mower, et al 

            Davor Kovacevic, age 41, and Zlate Balulovski, age, 41, of West Jordan and Mower are charged with seven counts of wire fraud and three counts of money laundering in an indictment alleging that around April 2012, Kovacevic and Balulovski began bribing Mower. In exchange, Kovacevic and Balulovski asked for and received favors, preferential treatment, and assistance in defrauding FXG.

            Kovacevic and Balulovski own and operate several trucking companies in Utah.

            According to the indictment, the defendants used Mower’s position to game FXG’s process governing the awarding of new truck routes to FXG contract service providers, to falsify or boost mileage reports so that FXG paid the defendants’ companies more than they were entitled to, and to receive payments for “ghost routes” or runs never actually run by a trucking company.

            As a result of the fraud, the indictment alleges the defendants’ companies received approximately $21,373,873 in FXG net revenue over the past seven and a half years and paid Mower approximately $165,000 in bribe payments. 

US v Murdock and Mower 

            William Shayne Murdock, age 42, of Providence, Utah, and Mower are charged in a 10-count indictment with wire fraud, promotional money laundering, concealment money laundering, and money laundering. Murdock owns several trucking companies in Utah. Sometime around February 2014, Murdock began paying Mower bribes. In exchange, Murdock asked for and received favors and assistance in defrauding FXG, according to the indictment.

            Fox example, at some time in 2014, one of Murdock’s trucking companies was awarded a FedEx freight run from Salt Lake City to Pennsylvania to Memphis.  The indictment alleges Mower determined that based on FXG policies, he should have posted this run as an assigned run so that other contracted service providers could compete for the run. Mower did not post the run.  He allowed Murdock trucking companies to operate the unauthorized assigned run for about five years.

            By fraudulently obtaining assigned runs, obscuring business ownership and growth, and falsely reporting miles to gain unearned income, Murdock’s companies received about $19 million in FXG revenue over the past five years.  During that period, Murdock paid bribes to Mower of at least $50,000.                

US v Mower 

            Mower is charged with five counts of filing false tax returns in a Felony Information unsealed Monday. The charges allege Mower failed to include income in individual income tax returns he filed for several tax years.  For example, in February 2016, he filed a return stating that his adjustable gross income for the 2015 tax year was $112,113, knowing he had received at least $223,088.54 in additional income.  In a return for tax year 2016, he reported income of $111,835 when he knew that he had received at least $348,877.85 in additional income.   

Seizures 

            In addition to the criminal charges, the United States obtained seizure warrants to deprive the defendants of the profits of their alleged criminal conduct by seizing 25 pieces of real property, 60 bank accounts, investments, cars, boats, snowmobiles, motorcycles, ATVs, trailers, jewelry and firearms. Items seized during a case are held while the case is litigated. The process is finalized with a forfeiture order signed by the Court.

Arrests/court hearings

            Balulovski, Kovacevic, Barsukov, Tsipelzon, Tomilin and Murdock were arrested Friday and have initial appearances Monday afternoon in federal court. An arrest warrant has been issued for Ugarte. Mower has been issued a summons for an initial appearance Wednesday.  Tuchinsky was arrested in San Diego Friday.  A detention hearing has been set for Tuesday at 9:45 a.m. in San Diego. Teyf is in federal custody in North Carolina in an unrelated case. 

            The potential maximum penalty for wire fraud conspiracy/wire fraud is 20 years in prison.  Promotional money laundering and concealment of money laundering counts each have potential 20-year sentences.  The potential sentence for money laundering is up to 10 years in prison. Filing a false tax return has a potential maximum sentence of three years per count.

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

SALT LAKE CITY – The lead defendant in a methamphetamine trafficking ring responsible for distributing more than 99 pounds of methamphetamine in Utah, Idaho, and other locations, will spend 20 years in federal prison after pleading guilty to conspiracy to distribute methamphetamine and conspiracy to commit money laundering.

According to documents filed in court, Tiffany Scott Spevak, age 39, of Salt Lake City,   agreed that she conspired with others from about January 2014 through October 2016, to procure methamphetamine in Arizona and California and distribute it to customers in Utah, Idaho, and other locations.

She admitted that more than 99 pounds of methamphetamine were distributed during the conspiracy period.  Spevak admitted that she directed other individuals to get the methamphetamine and to distribute it during conspiracy period. Investigators involved in the case estimate that the group distributed between 250-500 pounds of methamphetamine.

She also admitted that those involved in the conspiracy engaged in financial transactions, knowing the property involved in the financial transactions represented proceeds of unlawful activity – distribution of methamphetamine in this case – with the intent to continue the unlawful activity.

Acting on information provided by an individual arrested in Washington, special agents with U.S. Department of Homeland Security Investigations interviewed Spevak at her home in January 2016.  Agents found $37,000 in case during a search of her residence. A narcotics K-9 alerted on items in the home.  Agents found postal express mail envelopes and a small roll of green shrink wrap in a closet.  Spevak initially told them the materials were from 2012 and were used by her significant other, Hugo Tapia-Mendoza, who is currently incarcerated in another federal drug case.  During a later interview, Spevak told agents that after Tapia was arrested, she began to contact individuals who worked for Tapia who connected her with individuals who sold her methamphetamine.

Cases are pending for four other defendants in the case. Carlos Rafael Cota-Escalante, age 53, of Phoenix, Arizona, is charged with conspiracy to distribute methamphetamine and conspiracy to commit money laundering in the indictment.  He is in custody. Stephen Scott Spevak, 62, of Idaho, is charged with conspiracy to distribute methamphetamine, conspiracy to commit money laundering, and three counts of money laundering. He is on pretrial release. An arrest warrant is pending for Carlos Rafael Cota-Llanes, age 31, of Phoenix, who is charged with conspiracy to distribute methamphetamine and conspiracy to commit money laundering. Shanna Walter, age 42, of Salt Lake County, is charged with money laundering and is on pretrial release.  (Stephen Scott Spevak is Tiffany Scott Spevak’s father.)

In a related case in Idaho, Ryan Dalley of Pocatello, Idaho, who worked with Tiffany Spevak to get methamphetamine in Los Angeles and Phoenix for distribution in Idaho and Montana, was sentenced to 17 years in federal prison in September. At sentencing, U.S. District Court Judge B. Lynn Winmill noted he has presided over a significant share of the drug sentencings in federal court in Pocatello in the past 24 years, and he believed Dalley’s drug trafficking organization is “one of, if not the largest, drug trafficking operation in Eastern Idaho.”

Federal prosecutors in the U.S. Attorney’s Office in Utah are prosecuting the case.  Special agents of the DEA, IRS-Criminal Investigation, and the U.S. Department of Homeland Security Investigations are investigating the case along with the Idaho State Police.

Alma Barlow and Denver Barlow, formerly of Hildale, Utah, were sentenced in federal court today to 24 months in prison each for conspiracy to file false claims, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.

According to court documents, from 2009 to 2014, the defendants held themselves out to the public as legitimate tax return preparers, though they filed over 700 false tax returns for themselves and for hundreds of unknowing clients, ultimately claiming over $9.7 million in false refunds from the Internal Revenue Service (IRS).

In furtherance of their conspiracy, the defendants added false entries to tax returns to trigger the Earned Income Tax Credit or added false figures for federal income tax withholdings, Form 1099-OID income tax withholdings, or Schedule C business expenses in order to fraudulently increase the amount of the claimed refunds.

In addition to the term of imprisonment, U.S. District Court Judge Ted Stewart ordered the defendants to each serve three years of supervised release, and to pay over $5.3 million in restitution to the United States.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Tyler Murray and Trial Attorney Matthew Hoffman of the Tax Division, who prosecuted the case.

SALT LAKE CITY – A former Defense Intelligence Agency (DIA) officer, who pleaded guilty in March to attempting to communicate, deliver, or transmit information involving the national defense of the United States to the People’s Republic of China, will serve 10 years in federal prison.  U.S. District Judge Dee Benson imposed the sentence Tuesday afternoon in Salt Lake City.

Ron Rockwell Hansen, 60, of Syracuse, Utah, was arrested June 2, 2018, on his way to the Seattle-Tacoma International Airport in Seattle, Wash., as he was preparing to board a flight to China while in possession of SECRET military information.

Hansen pleaded guilty to the lead count of a 15-count indictment returned in June 2018, charging him with attempt to gather or deliver defense information, acting as an agent of a foreign government, bulk cash smuggling, structuring monetary transactions, and smuggling goods from the United States.  On the motion of federal prosecutors, the court dismissed the remaining counts of the indictment at the sentencing.

“One of three ex-US intelligence officers recently convicted of acting on behalf of the People’s Republic of China, Ron Rockwell Hansen received hundreds of thousands of dollars for betraying his country and former colleagues,” said Assistant Attorney General John C. Demers of the Department of Justice’s National Security Division. “These cases show the breadth of the Chinese government’s espionage efforts and the threat they pose to our national security.  Our intelligence professionals swear an oath to protect our country’s most closely held secrets and the National Security Division will continue to relentlessly pursue justice against those who violate this oath.”

“The Chinese government continues to attempt to identify and recruit current and former members of the United States intelligence community.  This is a very troubling trend. These individuals must remain vigilant and immediately report any suspicious activity. The Hansen case is an example of what will happen to those who violate the public’s trust and risk our national security by disclosing classified information,” U.S. Attorney John W. Huber said today.

“Ron Hansen was willing to betray his oath and his country for financial gain,” said Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office.  "This case brings to light that not all spies are foreign adversaries.  Insider threats pose a significant national security risk, and the FBI will continue to aggressively investigate those who put our country and citizens at risk.”

Hansen retired from the U.S. Army as a Warrant Officer with a background in signals intelligence and human intelligence.  He speaks fluent Mandarin-Chinese and Russian, according to court documents. Upon retiring from active duty, DIA hired Hansen as a civilian intelligence case officer in 2006. Hansen held a Top Secret clearance for many years and signed several non-disclosure agreements during his tenure at DIA and as a government contractor.

As Hansen admitted in the plea agreement, in early 2014, agents of a Chinese intelligence service targeted him for recruitment, and he began meeting with them regularly in China.  During these meetings, the agents described to Hansen the type of information that would interest Chinese intelligence.  Hansen stipulated that during the course of his relationship with Chinese intelligence, he received hundreds of thousands of dollars in compensation for information he provided them.

Between May 24, 2016, and June 2, 2018, Hansen admitted he solicited national security information from an intelligence case officer working for the DIA.  Hansen admitted knowing that the Chinese intelligence services would find the information valuable, and he agreed to act as a conduit to sell that information to the Chinese.  He advised the DIA case officer how to record and transmit classified information without detection, and how to hide and launder any funds received as payment for classified information.  He admitted he now understands that the DIA case officer reported his conduct to the DIA and subsequently acted as a confidential human source for the FBI.

Hansen admitted meeting with the DIA case officer on June 2, 2018 and receiving individual documents containing national defense information that he had previously solicited.  The documents he received were classified. The documents included national security information related to U.S. military readiness in a particular region -- information closely held by the federal government. Hansen did not possess a security clearance nor did he possess a need to know the information contained in the materials.

As a part of his plea agreement, Hansen admitted he reviewed the documents, queried the case officer about their contents, and took written notes which contained information determined to be classified.  He advised the DIA case officer that he would remember most of the details about the documents he received that day and would conceal notes about the material in the text of an electronic document he would prepare at the airport before leaving for China.  He admitted he intended to provide the information he received to the agents of the Chinese Intelligence Service with whom he had been meeting.  He also admitted knowing that the information was to be used to the injury of the United States and to the advantage of a foreign nation.

As a part of the plea agreement, Hansen has agreed to forfeit property acquired from or traceable to his offense, including property used to facilitate the crime.

The case was handled by Assistant U.S. Attorneys Robert A. Lund, Karin Fojtik, Mark K. Vincent and Alicia Cook of the District of Utah, and Trial Attorneys Patrick T. Murphy, Matthew J. McKenzie and Adam L. Small of the National Security Division’s Counterintelligence and Export Control Section.  Prosecutors from the U.S. Attorney’s Office for the Western District of Washington assisted with this case.  

The prosecution is the result of an investigation by special agents of the FBI, IRS-Criminal Investigation, U.S. Department of Commerce, the U.S. Department of Defense, U.S. Army Counterintelligence, and the Defense Intelligence Agency.

A former Defense Intelligence Agency (DIA) officer, who pleaded guilty in March to attempting to communicate, deliver, or transmit information involving the national defense of the United States to the People’s Republic of China, will serve 10 years in federal prison.  U.S. District Judge Dee Benson imposed the sentence Tuesday afternoon in Salt Lake City.

Ron Rockwell Hansen, 60, of Syracuse, Utah, was arrested June 2, 2018, on his way to the Seattle-Tacoma International Airport in Seattle, Washington, as he was preparing to board a flight to China while in possession of SECRET military information. 

“One of three ex-US intelligence officers recently convicted of acting on behalf of the People’s Republic of China, Ron Rockwell Hansen received hundreds of thousands of dollars for betraying his country and former colleagues,” said Assistant Attorney General of National Security John C. Demers.  “These cases show the breadth of the Chinese government’s espionage efforts and the threat they pose to our national security.  Our intelligence professionals swear an oath to protect our country’s most closely held secrets and the National Security Division will continue to relentlessly pursue justice against those who violate this oath.”

“The Chinese government continues to attempt to identify and recruit current and former members of the United States intelligence community.  This is a very troubling trend. These individuals must remain vigilant and immediately report any suspicious activity. The Hansen case is an example of what will happen to those who violate the public’s trust and risk our national security by disclosing classified information,” said U.S. Attorney John W. Huber for the District of Utah.

“Ron Hansen was willing to betray his oath and his country for financial gain,” said Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office.  "This case brings to light that not all spies are foreign adversaries.  Insider threats pose a significant national security risk, and the FBI will continue to aggressively investigate those who put our country and citizens at risk.”

Hansen retired from the U.S. Army as a Warrant Officer with a background in signals intelligence and human intelligence.  He speaks fluent Mandarin-Chinese and Russian, according to court documents. Upon retiring from active duty, DIA hired Hansen as a civilian intelligence case officer in 2006. Hansen held a Top Secret clearance for many years, and signed several non-disclosure agreements during his tenure at DIA and as a government contractor. 

As Hansen admitted in the plea agreement, in early 2014, agents of a Chinese intelligence service targeted him for recruitment, and he began meeting with them regularly in China.  During these meetings, the agents described to Hansen the type of information that would interest Chinese intelligence.  Hansen stipulated that during the course of his relationship with Chinese intelligence, he received hundreds of thousands of dollars in compensation for information he provided them.

Between May 24, 2016, and June 2, 2018, Hansen admitted he solicited national security information from an intelligence case officer working for the DIA.  Hansen admitted knowing that the Chinese intelligence services would find the information valuable, and he agreed to act as a conduit to sell that information to the Chinese.  He advised the DIA case officer how to record and transmit classified information without detection, and how to hide and launder any funds received as payment for classified information.  He admitted he now understands that the DIA case officer reported his conduct to the DIA and subsequently acted as a confidential human source for the FBI.

Hansen admitted meeting with the DIA case officer on June 2, 2018, and receiving individual documents containing national defense information that he had previously solicited.  The documents he received were classified. The documents included national security information related to U.S. military readiness in a particular region -- information closely held by the federal government. Hansen did not possess a security clearance nor did he possess a need to know the information contained in the materials. 

As a part of his plea agreement, Hansen admitted he reviewed the documents, queried the case officer about their contents, and took written notes which contained information determined to be classified.  He advised the DIA case officer that he would remember most of the details about the documents he received that day and would conceal notes about the material in the text of an electronic document he would prepare at the airport before leaving for China.  He admitted he intended to provide the information he received to the agents of the Chinese Intelligence Service with whom he had been meeting.  He also admitted knowing that the information was to be used to the injury of the United States and to the advantage of a foreign nation.

As a part of the plea agreement, Hansen has agreed to forfeit property acquired from or traceable to his offense, including property used to facilitate the crime.

The case was handled by Assistant U.S. Attorneys Robert A. Lund, Karin Fojtik, Mark K. Vincent and Alicia Cook of the District of Utah, and Trial Attorneys Patrick T. Murphy, Matthew J. McKenzie and Adam L. Small of the National Security Division’s Counterintelligence and Export Control Section.  Prosecutors from the U.S. Attorney’s Office for the Western District of Washington assisted with this case.

The prosecution is the result of an investigation by special agents of the FBI, IRS-Criminal Investigation, U.S. Department of Commerce, the U.S. Department of Defense, U.S. Army Counterintelligence, and the Defense Intelligence Agency. 

SALT LAKE CITY –  A federal grand jury returned a 10-count superseding indictment Wednesday afternoon charging eight individuals in connection with a fraud scheme primarily targeting widowed women over 65 years old.  The indictment alleges that over approximately two years, the defendants defrauded dozens of victims out of more than $6 million, which they laundered through accounts they controlled.

According to the indictment, the defendants and unnamed co-conspirators used social media and social gaming applications to target widows.  The defendants created false identities to befriend potential victims, feigned romantic interest, and eventually pressured them to send money to the defendants. The indictment also alleges the defendants engaged in a series of subsequent transactions to disguise the origins of the funds and promote the operation of the conspiracy – often sending significant sums of money overseas.

Charged in the indictment are Jeffersonking Anyanwu, age 25, Daniel Negedu, age 21, Onoriode Kenneth Adigbolo, age 31, Chukwudi Kingsley Kalu, age 28, and Godsent Nwanganga, age 24, all Nigerians living in Orem; David Maduagu, age 27, a Nigerian living in Taylorsville; and Richard Ukorebi, age 38, and Adrianna Sotelo, age 20, both of West Valley City. Ukorebi is also Nigerian.

All defendants are charged with one count of conspiracy to commit mail fraud, three counts of mail fraud, and one count of money laundering conspiracy.  Anyanwu, Negedu, Adigbolo, Kalu, Ukorebi, Nwanganga and Sotello are also each charged with one count of money laundering.

The indictment alleges that in the typical execution of the scheme, the defendants and their co-conspirators would create a fake online personality on a social media website or dating application, befriend a woman through that website, and convince the woman through the fake persona that they had some urgent financial need. The fake profiles included a businessman in Europe, high ranking United States military officers, a successful Utah businessman, an individual in Sweden under house arrest, and an engineer working as a subcontractor for a large oil company working in Oman.  The fake schemes alleged in the indictment included telling women that a U.S. military member was stranded overseas, pitching loans or investment opportunities, and describing an urgent business need to purchase equipment. After presenting the false financial need, the victims were provided with the defendants’ bank account information. Once the money was in the defendants’ accounts, they would transfer the money to each other and to overseas accounts, withdraw the money as cash, or use the money for personal expenses. The indictment includes several examples of fake profiles the defendants allegedly used to obtain and launder money from victims. The victims in these examples ranged in age from 52 to 76.

One victim of the alleged scheme, a 75-year-old woman identified as C.S. in the indictment, was contacted on social media by the defendants using the profile “Aaron.Brain.” “Brain” claimed to be a businessperson living in Germany.  “Brain” provided photos and discussed his business, claiming he was involved in a business supplying pipe for a sewer in Turkey.  “Brain” provided photographs of industrial pipes in a warehouse.  He told the victim she could make $600,000 in his business venture.  He convinced C.S. to send 10 checks totaling $275,000 and make five wire transfers totaling $81,000 between April 2, 2018 and May 17, 2018.

The defendants and their unnamed co-conspirators used the name of a U.S. military general to befriend N.W., a 74-year-old woman, through social media.  Using the persona of the general, they pretended to be a high-ranking officer at Ft. Bragg deployed overseas.  They claimed to have a “portfolio” that was restricted due to customs fees and he needed her assistance to get his “portfolio” released.  They instructed N.W. to send checks made out to several of defendants.  The address they provided for mailing the checks was an address for Negedu in Vineyard, Utah, and other locations.  N.W. sent approximately $140,150.

The maximum potential penalty for each of the first four counts in the indictment is 20 years in prison and a fine of $250,000 (or double the stolen amount).  The penalty for each money laundering and money laundering conspiracy count is 10 years in federal prison and $250,000 (or double the laundered amount).

Anyanwu, Negedu, and Adigbolo were initially charged in an indictment returned by a federal grand jury in late May.  They were arraigned on the charges and entered pleas of not guilty.  They will remain in custody pending resolution of the case after U.S. Magistrate Judge Paul M. Warner found them to be a financial danger to the community, a risk of non-appearance, or both.  Ukorebi, Maduagu, and Sotelo were previously charged by criminal complaint and arrested.  Ukorebi and Maduagu were ordered detained pending trial.  Sotelo is released on supervision pending trial.  Nwanganga is incarcerated on unrelated charges.  Kalu remains at large. 

Assistant U.S. Attorneys in Salt Lake City are prosecuting the case.  Special agents of the FBI and Postal Inspectors from the U.S. Postal Inspection Service are investigating the case.

The defendants were arrested and charged as part of DOJ’s Operation reWired, a coordinated international enforcement operation.  (DOJ September 10, 2019 Press Release).

 

PSN Target Enforcement Area Summary

• 963 months of prison imposed (80.25 years)
• 21 defendants sentenced (20 to prison, 1 on probation)
• Average prison is 48.15 months
• Screened cases involving 164 individuals
• 74 individuals have been charged
• Another 90 are under review or have been declined
• 115 weapons recovered as a part of cases filed – including a grenade launcher, 78 pistols
• 34,656.42 grams of drugs, including 29,766.63 grams of meth
• In 2018, Weber County CSI responded to 93 shooting incidents where casings or bullets were recovered. By Sept. 1, 2018, there had been 69 shootings. As of Sept. 1, 2019, they have responded to 32 shootings.

 

What is the PSN Target Enforcement Area:  While the Utah PSN Task Force, along with other local and federal law enforcement agencies fulfill their duties and mission in every area of the state, the PSN Task Force has selected a 4.86 square mile area located primarily within Ogden City and Weber County for enhanced targeted enforcement.  This area, selected for its history of firearm and drug related crimes, includes 8,047 households and more than 22,000 residents of Ogden City and Weber County.  Through collaborative efforts and combined resources, the PSN Task Force is strategically targeting this area to detect, investigate, and disrupt those who violate state and federal laws, particularly firearm and drug related crimes.  Offenders arrested as a part of the targeted enforcement action are being prosecuted in state or federal court based upon which jurisdiction that can provide the most appropriate sanction.  In 2018, Ogden City experienced a historic 19.7% reduction in its Part 1 crimes.  Ogden City leaders attribute much of the success of this reduction in crime to the coordinated work occurring within the PSN Target Enforcement Area.

Significant cases prosecuted as a part of the TEA: 

U.S. v. Christopher J. Spraw, et al:  Six individuals are charged in a six-count indictment with conspiracy to distribute methamphetamine, conspiracy to distribute heroin, possession of meth with intent to distribute (Buenrostro), and two counts of possession of heroin with intent to distribute (Buenrostro and Deroboam).  Spraw is charged in the last count with possession of a firearm.  According to a complaint filed in the case, the FBI, the Davis Metro Narcotics Strike Force and the Weber Morgan Strike Force initiated separate investigations based on information indicating Spraw, a member of the Silent Aryan Warriors (SAW), was working with others to sell large amounts of methamphetamine and heroin in Weber and Davis counties. The agencies joined forces to continue the investigation.  Counts 3 and 4 of the indictment relate to approximately 195 pounds of meth and 1 pound of heroin found during the execution of a search warrant in Kearns.  Spraw, age 49, is from Ogden. Other defendants include Manuel Ramblano Sanchez Jr., age 24, address unknown, Damian Buenrostro, age 22, of Kearns, Sheila Mary Deroboam, age 52, Heidi Lynn Openshaw, age 40, and Vanessa Dominguez, age 33, all of Ogden.  Arrest warrants are pending for Sanchez and Buenrostro. The defendants face up to life in prison with a mandatory minimum 10 years if convicted of the conspiracy to distribute meth count.

U.S. v Lawley:  Dijuan Michele Lawley, age 45, of Ogden, pleaded guilty to distribution of cocaine and possession of a firearm in furtherance of a drug trafficking crime in late May and was sentenced to 78 months in federal prison and five years of supervised release when he finishes his sentence.  Lawley admitted he distributed approximately 2 grams of cocaine to another person, who was an ATF agent acting in an undercover capacity.  He also admitted he possessed three firearms in furtherance of his drug trafficking crime. Lawley was initially in custody on another federal case that was dismissed Aug. 31, 2018. Five days after being released from custody, he made arrangements to sell cocaine. He was arrested by the ATF SWAT team with helicopter surveillance assistance from the Utah Department of Public Safety. 

U.S. v Cordova: A two-day trial will start Oct. 22, 2019, before U.S. District Judge Robert J. Shelby for Rory Curtis Cordova, aka “Joker,” age 51, of Ogden, who faces two counts of possessing a firearm following a felony conviction. A criminal complaint filed Aug.15, 2018, alleges that around midnight on June 30, 2018, South Salt Lake City police officers responded to reports of gunfire at a residence.  Officers learned that an unidentified individual had fired multiple shots at the residence from a vehicle.  Eight bullets struck the residence.  Two individuals were inside the home at the time. Based on the video information and additional information provided by a resident of the home, law enforcement officers were able to identify Rory Cordova as a suspect in the case. At approximately, 3:15 a.m., the complaint says, law enforcement officers from multiple agencies located Cordova’s vehicle in Ogden and took him into custody.  During the course of the investigation, officers recovered several shell casings from inside Cordova’s vehicle where they also located a stolen Glock 26 9mm handgun.  Firearms leave unique markings on ammunition and casings as it is discharged from the firearm. NIBIN stores images of those markings, which identify the signature of the firearm.  These images are compared against other NIBIN entries for matches or “hits.”  A “hit” indicates that the markings are the same on the ammunition or casings and would have been fired from the same firearm. NIBIN analysis revealed that the markings on the spent shell casings recovered from the scene of the South Salt Lake shooting matched the spent shell casings recovered from Cordova’s car.  The NIBIN analysis also linked the Glock handgun recovered from Cordova’s vehicle to spent shell casings recovered from the scene of a shots fired call in Ogden on June 8, 2018. According to the complaint, the Ogden incident involved a man pulling up in front of a residence where a child’s birthday party was taking place. Shots were fired at the residence from the vehicle. Officers located several bullet holes and marks on the exterior of the residence, the front window of the residence, and the windshield of a vehicle parked in the driveway at the residence. Witness statements describing the shooter and the vehicle he was driving were consistent with Cordova and matched a vehicle registered to Cordova. Cordova is a documented Ogden Trece gang member and has felony convictions, leading to his restricted status under federal law firearms laws, according to charging documents. The potential maximum penalty for each of the counts in the complaint is 10 years in federal prison.

US v Armstrong: Charles Ray Armstrong, age 55, of West Valley City, who pleaded guilty to conspiracy to distribute more than 50 grams of methamphetamine, was sentenced to 117 months in federal prison Aug. 12, 2019.  Armstrong admitted that he agreed to deliver meth to a location in Ogden.  According to the court document, when he arrived to deliver the meth, he recognized the person purchasing the meth was an informant who worked with law enforcement.  He immediately left the area and drove his vehicle to the freeway with law enforcement in pursuit. He admitted throwing the meth out the window of his vehicle.  Police recovered a portion of the drugs.  Testing done at the Utah Crime Lab found 94.83 grams of actual meth.

US v Sexton:  Brandon Michael Sexton, age 44, of Ogden, is charged in a three-count indictment with possession of methamphetamine with intent to distribute, possession of heroin with intent to distribute, and possession of 19 firearms and associated ammunition following a felony conviction.  An investigation conducted by the Weber Morgan Narcotics Strike Force resulted in Sexton’s arrest. A three-day jury trial is set for Oct. 15, 2019, before U.S. District Judge Jill N. Parrish.  The maximum potential penalty for the charges in the indictment is life in prison with a 10-year mandatory minimum.

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

SALT LAKE CITY – A federal jury in Salt Lake City returned guilty verdicts Friday afternoon finding Aaron Michael 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.

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.

“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 his closing argument Thursday afternoon. The jury began deliberations Thursday afternoon.

U.S. Attorney for Utah John W. Huber, Utah Attorney General Sean Reyes, Special Agent in Charge Steven Cagen of Homeland Security Investigations in Denver, DEA District Agent in Charge Brian Besser, Special Agent in Charge Charles L. Grinstead of the FDA’s Office of Criminal Investigations Kansas City Field Office, Special Agent in Charge Tara Sullivan of the IRS Criminal Investigation Las Vegas Field Office, and Acting Inspector in Charge Jessica Wagner of the U.S. Postal Inspection Service’s Phoenix Division, announced the jury verdict today.

“The opioid crisis has devastated individuals, families, and entire communities across the nation.  Aaron Shamo controlled and led a highly profitable organization that delivered fentanyl-laced counterfeit pills to every state in the union.  Though his customers remained faceless on the dark web, their despair was real.  Shamo profited off that despair and a jury of his peers has held him accountable,” U.S. Attorney John W. Huber said today.

“We may never know the full extent of the lives lost or the families harmed by Aaron Shamo’s deadly enterprise as a global drug dealer.  Shamo’s conviction today is a significant victory in the ongoing war on illegal opioids in our state and nation. Utahns owe a debt of gratitude to all involved in taking down this predator,” Utah Attorney General Sean D. Reyes said today.

Shamo and his co-conspirators purchased pill presses to manufacture pills so they would appear to be legitimate pharmaceutical drugs. Shamo then 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 is a substantial step in an investigation. Shamo sold half a million pills – or more.

"The rapid emergence of extremely potent and highly addictive synthetic opioids has drastically changed the landscape for both drug addiction and drug enforcement.  Fentanyl and its many analogues are lethal in just milligrams.  Any criminal exploitation of this powerful drug poses a significant public safety threat to our community, to those struggling with opioid addiction, and to the many first responders who diligently strive to keep us safe.  The DEA is committed to aggressively identify and investigate any person or organization trafficking in or clandestinely manufacturing synthetic opioids for profit.

“The comprehensive investigation into the Aaron Shamo counterfeit pill manufacturing network shows how dangerous these enterprises are.  The subsequent conviction of Mr. Shamo proves that those who operate with blatant disregard for public safety will bear the full weight of the law and be held accountable for their crimes,"  Brian S. Besser, DEA District Agent in Charge, said today.

“A major narcotics and money laundering operation was dismantled due to the technological expertise of our agents and law enforcement partners,” said Steven Cagen, Special Agent in Charge of U.S. Homeland Security Investigations in Denver.  “Criminals who ruthlessly seek profits and personal gain at the expense of victims in our communities can’t hide in the dark web.  We remain steadfast in our resolve to bring to justice those that push dangerous drugs into our neighborhoods and contribute to the epidemic of opioid addiction in our country.”

“The illegal manufacture and distribution of opioids can result in overdoses and deaths, further fueling the national crisis,” said Special Agent in Charge Charles L. Grinstead, FDA Office of Criminal Investigations Kansas City Field Office. “The FDA is committed to doing our part to disrupt and dismantle illegal prescription drug manufacturing and distribution networks, including those that import raw materials from overseas to create counterfeit drugs, and misuse the internet to distribute those drugs with reckless disregard of the risk to public health and safety.”

“Trafficking opioids through the dark web enabled Mr. Shamo and his organization to profit and launder millions through this illicit activity,” said Special Agent in Charge Tara Sullivan, IRS Criminal Investigation.  “Today’s verdict is just, and shows IRS Criminal Investigation’s continued effort in prosecuting those who bring harm to our community.”

“Postal Inspectors are committed to keeping the U.S. Mail safe for all.  As criminals change their methods, we continue to adapt, capture, and hold the perpetrators accountable.  Along with our excellent law enforcement partners, we will continue to show criminals the dark web is never truly anonymous,” stated Acting Inspector in Charge Jessica Wagner of the U.S. Postal Inspection Service, Phoenix Division.

Evidence presented at trial showed that Shamo established himself as the CEO of a nationwide drug distribution network.  In closing arguments, prosecutors said Shamo became the person he set out to be – the Pharma Master.  Evidence at trial showed Shamo did the things leader and organizers do, prosecutors said. He was in control of the majority of the functions of the enterprise.  He established the dark web storefront, 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 said in closing arguments today.

Evidence showed Shamo developed the fentanyl product through a dangerous “trial and error” process as he distributed it to individuals across the country.  Experts say 1 milligram of fentanyl in a pill can have dangerous consequences up to and including death.

Evidence showed 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.

The jury convicted Shamo, 29, 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.

Sentencing in the case will be Dec. 3, 2019, at 2:30 p.m. in U.S. District Judge Dale A. Kimball’s courtroom. Shamo faces a potential mandatory-minimum life sentence. He remains in the custody of U.S. Marshals.

Sentencings are pending for co-conspirators in the case, who reached plea agreements with federal prosecutors.

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 –  Daron Howell Fordham, age 50, of Las Vegas, Nevada, who pleaded guilty to six counts of mail fraud in connection with a scheme that defrauded more than 1,693 victims nationwide, will serve 72 months in federal prison.  Many of the victims of the fraud are elderly and disabled.

Fordham pleaded guilty earlier this year to all counts included in an indictment returned by a federal grand jury in October 2018.  The plea agreement included a stipulated sentence of 72 months in federal prison. U.S. District Judge Dee Benson also ordered Fordham to pay $1,834,033,14 in restitution in the case. The six victims of the mail fraud counts in the case are between 65 and 91 years old.

“Crimes against the elderly target some of the most vulnerable people in our society. No one is immune from these schemes,” U.S. Attorney John W. Huber said today.  “We are continuing our efforts to help older adults and senior citizens recognize the signs of financial fraud schemes. This effort is one of the top priorities for the Department of Justice and my office.”  
 
Fordham, aka Southboy, Daron Destiny, Paul Park, James Parker, Daron Howell and Darren Fordham opened a private mailbox at the UPS Store in Park City in May 2014, using the business name Park Publishers and Distributors.  He requested that all mail received at the mailbox be forwarded to his address in California.

He used the mail to send promotional materials to individuals throughout the United States, including residents of Utah.  The mailers offered an opportunity to make money through a “direct partner program” called “Paul Park’s Profit Program” and listed the Park City mailbox as the company address for responses.  Fordham’s mailers induced people to send money to the Park City mailbox.  The mail was forwarded to Fordham in California. Other individuals made electronic payments.

Fordham made fraudulent claims and guarantees to induce individuals to invest, including “I’ll show you how you can earn up to 976% return (or more) on your money in less than 120 days… And without you even having to lift a finger to do work at all.”  He also encouraged them to invest in the printing and mailing of “our hot-selling FREE CRUISE FOR TWO VOUCHERS (sample included with the letter) that are used by businesses all across the country.”

Fordham told investors “WE DO ALL THE WORK! You decide how many Mailing Spots you want now and you’ll receive your Principal Check and PROFIT Check in less than 90 days.  Trust me.  You’ll be upset if you miss this one.”

He told investors they could get more than a 1,000% return on their money by investing $500 and getting a return of $5,570. 

After about six months, he closed the mailbox in Park City and disconnected the 1-800 number, leaving victims unable to reach him.  He never sent them vouchers or returned any money he received from the victims, despite receiving heartfelt letters requesting a refund.

The six mail fraud counts of conviction relate to the Park City financial fraud scheme. Fordham.  Fordham obtained at least $203,866.25 through the Park Publishers fraudulent promotional scheme.

In 2014, Fordham had at least eight different variations of this scheme ongoing using different names, private mailboxes, and phone numbers.  He continued to operate his fraudulent schemes until his Nov. 9, 2018, arrest in Las Vegas. At the time of his arrest, law enforcement officers found an apartment full of promotional material similar to the Park Publishers scheme but with different variations. Fordham was operating schemes called “Monster Gift Cards” and “AGS Gift Cards.”  

The total loss amount from his schemes is $1,834,003.14.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case.  Inspectors with the U.S. Postal Inspection Service in Salt Lake City investigated the case.  

 

SALT LAKE CITY – A West Jordan man faces federal charges of distribution of fentanyl resulting in death and conspiracy to distribute fentanyl in a two-count indictment returned by a grand jury late Wednesday afternoon.

The indictment alleges that John Aaron Favro, age 24, of West Jordan, distributed fentanyl on Nov. 18, 2016, resulting in the overdose death of a person identified in the indictment as M.K.K. 

According to a complaint filed in the case, M.K.K. was pronounced dead Nov. 21, 2016, from an apparent overdose at an apartment in Murray.  M.K.K. was found during a welfare check after not being seen or heard from since Nov. 18, 2016.  According to the complaint, a shoe box containing two small blue pills labelled A215, an imprint that signifies oxycodone, was found next to her on the bed.  A toxicology analysis of M.K.K.’s blood revealed high levels of fentanyl.  According to the Utah Medical Examiner, she died as a result of fentanyl intoxication.

Salt Lake City DEA agents spoke with M.K.K.’s parents regarding her death.  According to the complaint, the parents told the agents about an individual with whom they had been in contact at the time of M.K.K.’s death when they had been desperately trying to find M.K.K, the complaint alleges.  They tracked a phone number on their family cellular phone plan records to Favro.

The DEA investigation of Favro started in 2016.  It continued into 2019 as agents gathered evidence, completed an examination of M.K.K.’s cell phone records leading up to her death, and conducted interviews with others, including a confidential source who told agents in January 2019 that he/she believed Favro was M.K.K.’s supply source for fentanyl at the time of her death.  According to the complaint, M.K.K. who was participating in Drug Court, was introduced to Favro through another Drug Court participant.

According to the complaint, confidential sources indicated Favro sold more than 10,000 fentanyl-laced fake oxycodone pills.  A second confidential source, who worked as Favro’s co-conspirator, told agents he/she personally supplied Favro with 500-1000 pills at a time on at least 20 occasions over the months they worked together selling pills. Agents seized fentanyl-laced fake oxycodone pills from the second confidential source and test results confirmed the pills contained fentanyl. The second confidential source sold fentanyl-laced fake oxycodone pills in Utah from before June 2015 through May 2017. Two other confidential sources told agents they supplied Favro with fentanyl-laced fake oxycodone pills for resale during the summer of 2016.

Favro is scheduled to be arraigned on the charges in the indictment Thursday at 2:45 p.m. before U.S. Magistrate Judge Paul M. Warner. The potential maximum penalty for each count the Favro indictment is life in prison. Both counts have minimum mandatory sentences. The distribution count resulting in death has a potential 20-year minimum mandatory sentence and the conspiracy count has a 10-year minimum mandatory sentence. 

Earlier this summer, U.S. Attorney John W. Huber encouraged law enforcement officers to screen all cases involving fentanyl with his office for potential federal prosecution. 

“Fentanyl is at a high threat level for us.  We are asking our law enforcement partners to help us disrupt, dismantle, and deter fentanyl distribution in Utah and prevent fentanyl-related overdose deaths,” U.S. Attorney John W. Huber said.  “We need to use every tool we have.”

Huber said he has a clear message for drug traffickers: bring fentanyl into Utah and plan on having an initial appearance in federal court.

According to DEA information, fentanyl is a synthetic opioid that is 80-100 times stronger than morphine and 50 times stronger than heroin. Pharmaceutical fentanyl was developed for pain management treatment. Because of its powerful opioid properties, Fentanyl is also diverted for abuse. Clandestinely produced fentanyl is primarily manufactured in Mexico.

Given the risks of fentanyl, federal prosecutors believe there is a compelling federal interest in reviewing every case.  Huber says his prosecutors will screen for evidence of distribution or simple possession.  Additionally, his office will pursue any appropriate sentencing enhancements.

Indictments and complaints are not findings of guilt.  Individuals charged in these documents are presumed innocent unless or until proven guilty in court.

Assistant U.S. Attorneys with the U.S. Attorney’s Office in Salt Lake City are prosecuting the case. Special agents and task force officers from the DEA Metro Narcotics Task Force and IRS-Criminal Investigations are investigating the case.  The U.S. Marshals Service is also assisting with the case.

Kemp & Associates Inc., a Salt Lake City-based heir location services provider, and its co-owner, Daniel J. Mannix, pleaded guilty to allocating customers with another heir location services firm, the Department of Justice announced today.

Kemp & Associates and Mannix pleaded guilty to a one-count felony indictment filed on Aug. 17, 2016 in the U.S. District Court in Salt Lake City.  The indictment charged Kemp & Associates and Mannix with conspiring with a competitor to suppress and eliminate competition by agreeing to allocate customers of heir location services sold in the United States between 1999 and 2014.  With today’s pleas, three executives and two companies have entered guilty pleas as a result of the federal antitrust investigation into customer allocation, price fixing, bid rigging, and other anticompetitive conduct in the heir location services industry.

“For over a decade, the defendants conspired to enrich themselves and to deprive heirs pursuing their rightful inheritances of the benefits of competition,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “Allocation schemes distort markets and cheat customers.  The Division will not waver in its commitment to protect consumers in all markets from schemes long-condemned as per se illegal.”

Heir location firms identify people who may be entitled to an inheritance from the estate of someone who died without a will.  The heir location firms then enter into agreements with those people to help secure their inheritances in exchange for a fee.  Kemp & Associates, Mannix, and their co-conspirators implemented their conspiracy when they contacted the same heir that had not yet signed with an heir location company.  The company that was second to contact that heir then stopped competing for that and certain remaining unsigned heirs to the estate.  In exchange for not competing, the second company received from the first company a portion of the fees ultimately collected from those heirs. 

Kemp & Associates and Mannix previously challenged the application of the per se rule in this matter.  Under the per se rule, certain restraints of trade are condemned as categorically illegal.  In June 2017, the U.S. District Court for the District of Utah ruled the customer allocation alleged in the indictment would be tried under the rule of reason.  The Division appealed the decision to the Tenth Circuit.  In October 2018, the Tenth Circuit found it did not have jurisdiction to address the application of the rule of reason, but encouraged the district court to “reconsider its rule of reason order.”  In February 2019, the district court granted the United States’ Motion to Reconsider and found the per se rule applies to the horizontal customer allocation agreement alleged in the indictment. 

Kemp & Associates agreed to pay a $1.53 million criminal fine for its role in the conspiracy.  In a separate plea agreement, Mannix also agreed to pay a $77,595.93 criminal fine.  Mannix and the Antitrust Division have jointly agreed to allow the Court to determine an appropriate sentence regarding incarceration.  The terms of the plea agreements are subject to the approval of the Court.

A criminal violation of Section 1 of the Sherman Act carries maximum penalties of a $100 million fine for corporations and 10 years in prison and a $1 million fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The pleas are the result of the investigation into the heir location services industry conducted by the Antitrust Division’s Chicago Office and the FBI’s Salt Lake City Division, with assistance from the U.S. Attorney’s Office in Salt Lake City and the U.S. Attorney’s Office in Chicago.

Anyone with information on customer allocation, bid rigging, price fixing, or other anticompetitive conduct related to the heir location services industry should contact the Antitrust Division’s Chicago Office at 312-984-7200.

WASHINGTON – Drew Yeates, an Assistant U.S. Attorney in Salt Lake City, received the Attorney General’s Volunteer Award for Community Service Monday recognizing his significant efforts to reduce the rate of domestic violence in Utah. U.S. Attorney General William P. Barr announced the awards Monday.  Yeates was honored at a ceremony at the U.S. Department of Justice.

Yeates, a career city, county, and federal prosecutor, was one of three U.S. Department of Justice employees recognized for exemplary community service efforts and the only prosecutor. The Attorney General also presented two Attorney General’s Citizen Volunteer Service Awards to members of the public recognizing their outstanding contributions to the Department’s mission.

“Today we honor these exceptional men and women for their remarkable contributions to protecting and improving their communities,” said Attorney General William P. Barr. “To take only a few examples, they have strived to keep schoolchildren safe, empowered victims of domestic violence, provided inmates with re-entry life skills, and fostered trust between law enforcement and youth. Our awardees’ communities have been made immeasurably better for their efforts. The Department of Justice and a grateful country thank them for their work.”

Although Utah’s homicide rate is one of the lowest in the nation, a disproportionately high number of them involve domestic violence.  Domestic violence-related deaths account for approximately 30 percent of murders across the nation.  In Utah, it is 44 percent.  Women are the most likely victim.

As a prosecutor, Yeates has played a significant role in addressing domestic violence by prosecuting perpetrators of domestic violence, including those in possession of firearms.

Recognizing that most domestic violence criminal prosecutions occur after a victim has been harmed, Yeates was motivated to find a way to protect victims earlier in the process. Since 2012, Yeates has volunteered at the Safe Harbor Crisis Center in Layton, Utah.  In his seven years of pro bono service, Yeates has represented more than 200 victims of domestic violence – assisting them in obtaining permanent protective orders in approximately 160 cases.

“We are very proud of the efforts Drew is making to protect victims of domestic violence in Utah communities.  He is using civil litigation tools in his pro bono work and his experience as a prosecutor in our office,” U.S. Attorney John W. Huber said today. “He represents the highest values of the Department of Justice in his professional work and exemplary community service efforts.”

Yeates is Deputy Chief of the Criminal Division in the U.S. Attorney’s Office in Salt Lake City.

SALT LAKE CITY – In a conference call with federal law enforcement leaders and local drug task force commanders in Utah, U.S. Attorney John W. Huber encouraged law enforcement officers to screen all cases involving fentanyl with his office for potential federal prosecution. 

“Fentanyl is at a high threat level for us.  We are asking our law enforcement partners to help us disrupt, dismantle, and deter fentanyl distribution in Utah and prevent fentanyl-related overdose deaths,” U.S. Attorney John W. Huber said.  “We need to use every tool we have.”

Huber said he has a clear message for drug traffickers: bring fentanyl into Utah and plan on having an initial appearance in federal court.

According to DEA information, fentanyl is a synthetic opioid that is 80-100 times stronger than morphine and 50 times stronger than heroin. Pharmaceutical fentanyl was developed for pain management treatment. Because of its powerful opioid properties, Fentanyl is also diverted for abuse. Fentanyl is added to heroin to increase its potency. Many users believe that they are purchasing heroin and do not recognize they are actually getting fentanyl – which often results in overdose deaths. Clandestinely produced fentanyl is primarily manufactured in Mexico.

Given the risks of fentanyl, federal prosecutors believe there is a compelling federal interest in reviewing every case.  Huber says his prosecutors will screen for evidence of distribution or simple possession.  Additionally, his office will pursue any appropriate sentencing enhancements.  Huber has appointed Assistant U.S. Attorney Sam Pead as his office’s point of contact for fentanyl cases.  Pead is an experienced prosecutor who came to the U.S. Attorney’s Office from the Utah County Attorney’s Office. 

Huber also is encouraging law enforcement partners and prosecutors to share intelligence and form partnerships to take full advantage of resources and assets. 

While the primary foreign source of supply for fentanyl in Utah is China, federal prosecutors and law enforcement officers say Mexican drug traffickers are increasing their capability.  “The same drug trafficking networks bringing heroin and methamphetamine into Utah could easily decide fentanyl, with its high profit margin, is what they want to do,” Huber said. “Law enforcement agencies are already seeing signs this is happening.”

While Utah has not experienced the high numbers of fentanyl overdose deaths as other places around the country, the Utah Drug Monitoring Initiative program reports fentanyl related fatal overdoses in Utah increased 54 percent from 2014 to 2018, with a spike of 49 fatalities in 2016.  Since 2016, there has been a slight decline in fentanyl related deaths, but the overdose deaths have remained higher than in 2014 and 2015. 

“We are asking law enforcement to help us find these cases out of a sincere desire to serve our communities in Utah.  These statistics are not just numbers – they represent loved ones, family members, and friends.  Law enforcement officers are committed to working with us to keep fentanyl out of Utah and protect citizens of our state,” Huber said.

Federal prosecutors in Utah are prosecuting a significant fentanyl case scheduled for a five-week trial in August.

SALT LAKE CITY – Sentencing is scheduled for Aug. 12, 2019, for Kenric Lee, age 41, an enrolled member of the Navajo Nation, who pleaded guilty in U.S. District Court Thursday to voluntary manslaughter.

In a plea agreement reached with federal prosecutors, Lee admitted that on June 7, 2018, he killed his uncle during an argument in a vehicle. His uncle, also an enrolled member of the Navajo Nation, is identified as J.L. in court documents. Lee admitted that he went with J.L. and J.L.’s girlfriend, C.H., to a convenience store in Montezuma Creek, Utah.  While C.H. was in the store, a quarrel erupted between Lee and J.L., while they were sitting in the vehicle. 

According to prosecutors, when C.H. returned to the car she saw Lee on top of the victim.  She also noticed Lee was holding a black knife. Lee said he needed to take J.L. to a hospital.  Although there was a medical clinic next door to the store, Lee locked the doors of the vehicle and drove away with J.L. in the car. 

Later that morning, the FBI and Navajo Nation police officers received information about a burning vehicle.  Agents and officers responded to the location and found a burning Ford Expedition.  Lee was found about 30 yards from the vehicle with two knives in his possession.  Lee was taken into custody after initially resisting arrest.  As a part of his plea agreement, Lee admitted that as a result of his actions, his uncle received two stab wounds to his chest which resulted in his death.

Later that evening, J.L.’s body was located later in a grove of bushes a few miles away from the incinerated vehicle.
 
A federal grand jury returned a single-count indictment in August 2018 charging Lee with murder in the second degree in connection with J.L.’s death.  Lee pleaded guilty last week to a Felony Information count of Voluntary Manslaughter while in Indian Country.

The plea includes a stipulated sentence of 110 months in federal prison, which is subject to the approval and acceptance of U.S. District Judge David Nuffer at the sentencing hearing in August.   

Assistant U.S. Attorneys in Utah are prosecuting the case.  Special Agents of the FBI and Navajo Nation Police Officers and Criminal Investigators are investigating the case.

SALT LAKE CITY – A defendant charged as a part of an Operation Rio Grande Drug Task Force investigation will spend 130 months in federal prison after pleading guilty to possession of a firearm and possession of methamphetamine with intent to distribute.  U.S. District Judge Dale A. Kimball imposed the sentence in federal court Thursday.

As a part of a plea agreement reached with federal prosecutors in February, Christopher Eugene Hooper, aka Messy, age 30, of Kearns, admitted he possessed a Sig .380 handgun with a loaded magazine and approximately 38 grams of methamphetamine.  He admitted he intended to distribute the methamphetamine to another person. 

Hooper was involved in a traffic stop executed by two task force members on Feb. 21, 2018, in the area of North Temple and Redwood Road.  A three-count federal indictment returned in March 2018 charged him with possession of a firearm and ammunition after a felony conviction, possession of methamphetamine with intent to distribute, and carrying a firearm during and in relation to a drug trafficking offense.  Prosecutors dismissed the second firearm count, carrying a firearm during a drug trafficking offense, at sentencing.

“This is a significant sentence for someone with a long record of felony convictions, including other drug charges, an attempted assault, theft, and assault on a police officer,” U.S. Attorney John W. Huber said today. “Convicted felon drug traffickers carrying loaded firearms is a recipe for disaster.  Getting these criminals out of our neighborhoods and into federal prison makes our neighborhoods safer for all of us.”  

"The Utah Department of Public Safety is working to reduce violent crime, including situations involving the use of a firearm. These instances pose a threat to public safety,” Captain Jared Garcia of the Utah Department of Public Safety’s State Bureau of Investigation (SBI) said.

Garcia said members of the Utah Crime Gun Intelligence Center, which includes investigators, intelligence analysts, and crime lab personnel from several local, state and federal agencies, are actively working several cases. “This team approach identifies and stops violent offenders and prevents victimization,” Garcia said.

In another SBI case resulting from Operation Rio Grande, sentencing is set for July 31, 2019, for Tohi Ryan Ngata, aka Leaaetohi Ryan Ngata, aka Toni Ngata-Latu, aka Cuzloc, age 35, of Salt Lake City.  Ngata pleaded guilty to possession of a firearm and ammunition following a felony conviction and possession of heroin with intent to distribute in April.  Ngata fled from officers attempting to stop him for a moving violation on a bicycle in January 2018. Officers observed that Ngata was reaching toward his waistband. Ngata was detained a short time later.  During a subsequent search, officers found a loaded handgun in his waistband and heroin. Ngata’s plea agreement includes a stipulated sentence of 60 months in federal prison. 

SALT LAKE CITY – Stephen Plato McRae, age 59, of Escalante, who was charged with one count of destruction of an energy facility in an indictment returned in February 2017, pleaded guilty to the charge Friday morning in U.S. District Court in Salt Lake City.

U.S. Attorney John W. Huber, FBI Special Agent in Charge Paul Haertel, and Kane County Sheriff Tracy Glover announced the plea agreement Friday afternoon.

In stipulated facts included in the plea agreement, McRae admitted that he traveled to the Buckskin Electrical Substation in Kane County on Sept. 25, 2016.  Garkane Energy Cooperative owns the substation.  Using his Springfield 30-40, Model 1898, rifle, McRae admitted he fired shots into the cooling fins rupturing the radiator piping. The damage from the rifle shots caused the energy facility substation to overheat and fail.  McRae’s actions caused a power outage in Kane and Garfield counties. 

Garkane spent $380,522 to repair the damage caused by McRae’s criminal conduct.

The plea agreement includes a stipulated sentence of 96 months in federal prison, which is subject to the approval of the court.  Sentencing in the case is set for July 30, 2019, before U.S. District Judge Ted Stewart.  McRae is in federal custody.

As a part of the plea agreement, McRae also admitted that he damaged other energy facilities for which he has not been charged. The United States and local prosecuting authorities have agreed not to seek charges for these offenses. However, these incidents will be included as relevant conduct the court will take into consideration in determining the reasonableness of the stipulated 96-month sentence.

The other offenses include damage McRae caused to the Libson Valley Substation in San Juan County on April 1, 2015; damage he caused to the Quinn River Substation in Humboldt County, Nevada on Aug. 31, 2016; and damage he caused to the Baker Substation in White Pine County, Nevada, on Sept. 14, 2016.  

McRae has agreed to pay $380,522 in restitution to Garkane Energy Cooperative. He faces up to three years of supervised release when he finishes his federal prison sentence.  As a part of the plea agreement, McRae agreed that he would not reside in or travel through six Utah counties (Garfield, Kane, Wayne, Juab, Iron, and Washington) during the term of his supervised release.  Garkane Energy Cooperative, Inc. has energy facilities in these counties. 

As a part of the plea agreement, federal prosecutors have agreed to dismiss two other counts included in the indictment, possession of a firearm/ammunition by a restricted person and possession of a controlled substance, at sentencing.

Special agents of the FBI and the BLM, who are participating as members of the FBI’s Joint Terrorism Task Force, the Kane County Sheriff’s Office, the Garfield County Sheriff’s Office, the Humbolt County Sheriff’s Offfice in Nevada, and the White Planes County Sheriff’s Office in Nevada have participated in the investigation.  Assistant U.S. Attorneys in Utah are prosecuting the case.

SALT LAKE CITY -- A federal grand jury in Salt Lake City returned a six-count indictment Wednesday afternoon charging three individuals in connection with an alleged scheme to defraud investors by inducing them to purchase investments in a fraudulent silver trading program.

The silver trading program was offered and sold to at least 500 investors throughout the United States and the defendants collected approximately $200 million.

Charged in the indictment are Gaylen Dean Rust, age 59, and Denise Gunderson Rust, age 59, both of Layton, and Joshua Daniel Rust, age 37, of Draper.

Announcing the indictment are U.S. Attorney for Utah John W. Huber, FBI Special Agent in Charge Paul Haertel of the FBI’s Salt Lake Field Office; Francine A. Giani, Executive Director of the Utah Department of Commerce, and Thomas A. Brady, Director of the Division of Securities.

Gaylen Rust owned and managed Rust Rare Coin, Inc. (RRC), R Legacy Entertainment LLC, R. Legacy Racing Inc., R Legacy Investments LLC, R Legacy Ranch, and Legacy Music Alliance.  Denise Rust was listed as the secretary of RRC and had signatory authority on several RRC bank accounts.  Joshua Rust was manager of RRC from 2004 to Nov. 15, 2018.  He also had signatory authority on several RRC bank accounts and managed the day-to-day operations of the RRC coin shop.

All three defendants are charged with wire fraud conspiracy in the first count of the indictment and money laundering conspiracy in the second count.  Gaylen Rust is also charged with two counts of securities fraud.  Denise Rust and Joshua Rust are each charged with one count of money laundering.  

The indictment alleges that from around 1996 and continuing to Nov. 15, 2018, the defendants conspired to defraud investors and potential investors by offering and inducing them to purchase investments in a silver trading program.  According to the indictment, Gaylen Rust, who offered and sold investments in the program, made false and fraudulent statements regarding his scheme, both directly and indirectly, to investors and potential investors through various means including meetings, phone calls, mailings, and emails.

The indictment alleges the defendants failed to disclose to investors, among other things, that investor funds would be used for purposes other than to invest in silver and trading silver; that Gaylen Rust was not licensed to sell securities, trade commodities or operate a commodity pool; that investor funds were being laundered through transfers in and out of the defendants’  personal accounts; and that investment account statements provided to investors were false and not based on actual silver trades.  
 
In order to convince investors that their investments were profitable and to convince potential investors that the silver program was earning money, the defendants operated the trading program as a Ponzi scheme.  The defendants used investment money from later investors to pay the promised returns to earlier investors, creating the false impression that the silver trading program was profitable, the investments were safe and secure, and that the promised returns were being generated.  Ponzi payments of approximately $150 million were made to investors, representing those payments as profits from the operation of the silver trading program.

A summons will be issued to each defendant to appear on the charges in the indictment. The potential maximum penalties for wire fraud conspiracy, securities fraud and money laundering conspiracy are up to 20 years in federal prison per count.  Money laundering conspiracy carries a potential penalty of 20 years.  Securities fraud has a 20-year maximum sentence sand money laundering has a potential 10-year sentence.

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 Salt Lake City are prosecuting the case. Securities Investigator Elizabeth Blaylock of the Utah Division of Securities and Special Agents Jason Henrikson and James Malpede of the FBI are investigating the case along with agents on the FBI’s White Collar Task Force, including Special Agent Jeff Kirkwood of IRS-Criminal Investigation.  Related civil cases have been filed by the Securities Exchange Commission, the Commodity Futures Trading Commission, and the Utah Attorney General’s Office.

 

ST. GEORGE, UT – Sean Timothy O’Neill, age 49, of Hurricane, pleaded guilty to attempted enticement of a minor and possession of child pornography in federal court in St. George, Utah, Wednesday afternoon.  O’Neill admitted he attempted to persuade or induce a minor under 18 years of age to engage in sexual activity.

As a part of an agreement reached with federal prosecutors, O’Neill admitted that from around April 26, 2015, to about October 2017, he used Facebook to attempt to persuade or entice a minor identified as Girl 1 to engage in sexual activity.  He admitted that throughout the enticement period, he believed Girl 1 was less than 18 years of age. 

O’Neill admitted taking four substantial steps toward committing the crime, including moving from Michigan to Hurricane, buying a home in Hurricane, once in Utah continuing to use Facebook to persuade the minor to engage in sexual activity, and bringing the minor to his home in Hurricane.  According to the document filed in court, O’Neill admitted that if the sexual activity with the minor had occurred, he would have committed the criminal offense of Unlawful Sexual Conduct with a 16 or 17 year old under Utah law.  

O’Neill also admitted that he possessed an electronic device that contained more than 90 explicit images and three video segments of prepubescent children.  The images and videos also depicted the sexual abuse of children.

The plea agreement includes a stipulated sentence of 120 months in prison and at least 60 months of supervised release when he finishes his prison sentence.  There is no parole in the federal criminal system.  The plea agreement also includes a provision that O’Neill must register as a sex offender for his residence, the location of his employment, and, if he is a student, the location of his school. He must update his registrations no later than three business days after any change of name, residence, employment, or student status. 

U.S. District Judge David Nuffer, who presided at the change of plea hearing Wednesday, set sentencing for Aug. 20, 2019, at 9 a.m.

O’Neill was initially arrested on state charges in January 2018.  A federal arrest warrant was issued in February 2018.
 
Assistant U.S. Attorneys in Utah are prosecuting the case.  Special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and officers from the Hurricane Police Department are investigating the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in 2006 by the Department of Justice.  Led by U.S. Attorneys’ offices and DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. 

SALT LAKE CITY -- The U.S. Attorney’s Office in Salt Lake City filed a civil complaint in U.S. District Court afternoon morning against a doctor the complaint alleges is issuing prescriptions for controlled substances in violation of the Controlled Substance Act. To protect the public, the United States is also seeking a preliminary injunction to immediately stop the doctor from prescribing powerful controlled substances.

According to the complaint, Dr. Nicholas Carl Greenwood operates Greenwood Addiction Physicians in Murray. Greenwood Addiction Physicians claims on its website to be the premier outpatient program for the treatment of opioid dependence in the Western United States.  In reality, the complaint alleges, Dr. Greenwood issues prescriptions for substances with no legitimate medical purpose and outside the usual course of professional practice. 

Through his business, Dr. Greenwood claims to offer treatment options for opioid dependence, alcohol dependence, Benzodiazepine dependence, outpatient medical detox, and nicotine/tobacco dependence.

Dr. Greenwood has the authority to dispense and administer Schedule III drugs for maintenance or detoxification treatment.  Currently, the only controlled substance approved for the treatment of narcotic addiction is Buprenorphine.

A Schedule III controlled substance, Buprenorphine and Buprenorphine combination products are manufactured by multiple companies, according to an affidavit filed in the case.  The products are marketed under several trade names including Suboxone, Zubsolv, and Butrans. Suboxone is sold as a dissolvable film for the treatment of opioid dependence and should be used as part of a complete treatment plan including counseling and psychosocial support.   

According to the complaint, on April 4, 2018, the Tooele County Sheriff’s Office told the DEA’s Tactical Division Squad that an inmate was organizing and paying individuals to obtain controlled substances from Dr. Greenwood. 

Following the tip from the Tooele County Jail inmate, three separate agents with the DEA Tactical Diversion Squad visited Dr. Greenwood 20 times in an undercover capacity, according to the complaint.  The complaint alleges that over the course of almost eight months, Dr, Greenwood wrote the undercover agents 19 prescriptions for 889 pills without a legitimate medical purpose and outside the usual course of professional practice. All prescriptions were for Buprenorphine. The agents visited Dr. Greenwood from June 28, 2018, through February 21, 2019.

The complaint alleges all of the agents’ visits with Dr. Greenwood followed the same pattern: Dr. Greenwood never performed a medical examination, never asked questions about the agent’s health or symptoms, and never reviewed prior medical records. Instead, Dr. Greenwood issued prescriptions for Buprenorphine to the undercover agents without any evidence of medical need. Dr. Greenwood issued most of the prescriptions without actually meeting with the undercover agents, according to documents filed in court.

Dr. Greenwood knew, or should have known, that the prescriptions he issued, essentially on a cash-and-carry basis, were not medically necessary and were being sold or traded on the street, documents filed in court allege.  Dr. Greenwood believed that 25 to 50 percent of the prescriptions he issued were sold or traded, documents filed with the court allege. None of Dr. Greenwood’s prescriptions issued to the undercover investigators had a legitimate medical purpose, according to a motion and memorandum in support of a preliminary injunction filed with the court.

The United States is seeking to stop Dr. Greenwood from prescribing controlled substances. Accordingly, the United States moved for a preliminary injunction at the same time it filed the complaint against Dr. Greenwood. Dr. Greenwood will have 60 days to respond to the complaint and 14 days to respond to the motion.

The claims made in the complaint and other court filings are allegations only, and there has been no determination of liability.

Fordham Pleads Guilty To Mail Fraud Scheme With More Than 1,600 Victims Throughout The Nation

SALT LAKE CITY – In observance of National Crime Victims’ Rights Week (April 7-13, 2019), the U.S. Attorney’s Office in Salt Lake City held a media roundtable Wednesday morning advocating for victims of elder abuse in Utah and around the country.  Elder abuse includes crimes such as physical abuse and financial exploitation.

Joining U.S. Attorney John Huber at the roundtable discussion were Nan Mendenhall, State of Utah Director of Adult Protective Services, Alan Ormsby, State Director of AARP Utah, and Jared Bingham, Team Leader of the U.S. Postal Inspection Service in Utah.

“Attorney General William B. Barr reminded us a few weeks ago that crimes against the elderly target some of the most vulnerable people in our society. No one is immune from these schemes,” U.S. Attorney John W. Huber said today.  “While victims of any crime deserve justice, we decided to focus our victim rights week energy on our continuing efforts to educate our older adults and their families about signs of elder abuse. This effort remains one of the top priorities for the Department of Justice and my office.”  

According to a Department of Justice report provided to Congress, it is widely estimated that at least one in 10 people in the United States suffers from some form of elder abuse.  The abuse can be physical, psychological, or financial.  Each year, an estimated $3 billion is stolen from millions of American seniors through fraudulent financial investment schemes, grandparent scams, fake prizes, romance scams, and fraudulent IRS refunds – among others. Older Americans are targeted because fraudsters believe that is where the money is, they are more accessible after retirement, and they may be more trusting.

For example, sentencing will be June 6, 2019, in a Utah case involving a Las Vegas man who devised a direct mail fraud scheme involving at least 1,693 victims nationwide – many of whom are elderly and disabled. The total loss amount in the case is $1,834,033.15. 

Daron Howell Fordham, age 50, of Las Vegas, Nevada, entered guilty pleas to six counts of mail fraud in federal court in Salt Lake City on March 28, 2019. U.S. District Judge Dee Benson presided at the hearing.  Fordham pleaded guilty to all counts included in an indictment returned by a federal grand jury in October 2018.  The plea agreement includes a stipulated sentence of 72 months in federal prison, subject to the approval and acceptance of the court.

The six victims of the mail fraud counts in the case are between 65 and 91 years old.

Fordham, aka Southboy, Daron Destiny, Paul Park, James Parker, Daron Howell and Darren Fordham, admitted that as a part of his fraud scheme, he opened a private mailbox at the UPS Store in Park City in May 2014, using the business name Park Publishers and Distributors.  He requested that all mail received at the mailbox be forwarded to his address in California.

He used the mail to send promotional materials to individuals throughout the United States, including residents of Utah.  The mailers offered an opportunity to make money through a “direct partner program” called “Paul Park’s Profit Program” and listed the Park City mailbox as the company address for responses.  As a part of his plea agreement, Fordham admitted his mailers induced people to send money to the Park City mailbox.  The mail was immediately forwarded to him in California.  Some individuals made electronic payments.

Fordham admitted making fraudulent claims and guarantees to induce individuals to invest, including “I’ll show you how you can earn up to 976% return (or more) on your money in less than 120 days… And without you even having to lift a finger to do work at all.”  He also encouraged them to invest in the printing and mailing of “our hot-selling FREE CRUISE FOR TWO VOUCHERS (sample included with the letter) that are used by businesses all across the country.”

Fordham told investors “WE DO ALL THE WORK! You decide how many Mailing Spots you want now and you’ll receive your Principal Check and PROFIT Check in less than 90 days.  Trust me.  You’ll be upset if you miss this one.”

He told investors, according to the plea agreement, they could get more than a 1,000% return on their money by investing $500 and getting a return of $5,570. 

Fordham admitted he obtained at least $203,866.25 through his Park Publishers fraud scheme. After about six months, he closed the mailbox in Park City and disconnected the 1-800 number, leaving victims unable to reach him.  He never sent them vouchers or returned any money he received from the victims, despite receiving heartfelt letters requesting a refund. As a part of the plea agreement, he said he did on occasion purchase “a few gift cards and sent them to victims that complained the most in an attempt to appease them.”

The six mail fraud counts of conviction relate to the Park City financial fraud scheme.

Fordham admitted that in the year 2014, he had at least eight different variations of this scheme ongoing using different names, private mailboxes, and phone numbers.  He admitted he obtained $1,596,642.14 through his fraudulent mailer schemes January through November 2014.

He admitted he continued to operate his fraudulent scheme until his Nov. 9, 2018, arrest in Las Vegas. At the time of his arrest, law enforcement officers found an apartment full of promotional material similar to the Park Publishers scheme but with different variations. Fordham admitted he was operating schemes called “Monster Gift Cards” and “AGS Gift Cards.”  He fraudulently obtained at least $239,516 from these schemes.

Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case.  Inspectors with the U.S. Postal Inspection Service in Salt Lake City are investigating the case.

SALT LAKE CITY – Two defendants, who were involved in “jackpotting” a number of ATMs in Utah and elsewhere from Feb. 23, 2018, to March 7, 2018, have resolved their federal cases in Salt Lake City and been sentenced.  Three others have entered guilty pleas and will be sentenced in May. Cases are pending for two other defendants charged in the scheme.

Josshua Perez Rivas, age 39, a Venezuelan national, was sentenced to 42 months in federal prison in late February after pleading guilty to conspiracy to commit bank theft in December.  According to a sentencing memorandum filed by federal prosecutors, Perez Rivas played a significant role in organizing what was a sophisticated international conspiracy to steal from banks in the United States.  “The plot is remarkable for its technological sophistication and for the number of participants recruited to help ensure its success. It is a plot that requires significant planning and expertise,” they told the court.

The defendants in the case used software and equipment to reprogram ATM computers to enable them to direct the ATMs to dispense cash until emptied – an activity sometimes called jackpotting.  Perez Rivas compromised the ATM computers and installed the software in almost every instance. Perez Rivas appears to have been the point person for communications between the team on the ground and their coconspirators who developed the malware.

The defendants possessed false identifications and stolen credit card numbers to allow them to rent hotel rooms and vehicles to be used in facilitation of their conspiracy without leaving a record of their identities.  Computer files with approximately 600 credit card numbers that appear to have been stolen were found on data storage devices in the suitcases of one of the defendants.  Using the false identifications assured the defendants that their names were not left at the hotel or associated with the license plate on the vehicle should it be caught on camera, federal prosecutors said.  

Before their capture, Perez Rivas and his codefendants had successfully jackpotted five ATMs in Washington and one in Sandy, Utah.  They also attempted to jackpot two additional ATMs in Salt Lake City before being arrested during the Sandy crime.

According to information included in plea agreements reached in the case, the following amounts were stolen from ATMs through the unauthorized access:

Dec. 13, 2017             Sound Credit Union ATM -  Bothell, Washington                        $88,000

Dec. 15, 2017             iQ Credit Union - Vancouver, Washington                                    $8,000

Dec. 16, 2017             Umpqua Bank ATM - Vancouver, Washington                             $16,000

Dec. 16, 2017             Columbia Credit Union ATM - Vancouver, Washington             $91,000

Dec. 17, 2017             Heritage Bank ATM -  Vernon, Washington                                  $64,400

Feb. 25, 2018             Deseret First Credit Union ATM -  Sandy, Utah                          $38,800

The two ATMS in the attempted jackpotting events in Salt Lake City contained $75,000 and $33,200.  It appears these attempts were thwarted by an alarm that sounded at one ATM and the arrival of a bank customer at the other.    

Starlin Garcia Caraballo, age 40, pleaded guilty to conspiracy to commit bank theft charged in the Washington indictment and conspiracy to commit computer fraud and abuse from the Utah indictment.  He has been sentenced to one year in federal prison.   

Joao Silva Robertson, age 29, and Pedro Rivero Velazquez, age 39, have pleaded guilty to one count of conspiracy to commit bank theft charged in a superseding indictment returned in the Western District of Washington and one count of conspiracy to commit computer fraud and abuse charged in the Utah indictment.  Sentencing for Velazquez will be May 13.  Robertson will be sentenced May 20, 2018.  Both plea agreements include a stipulated 30-month sentence, subject to the approval of the court.

Jean Carlos Dumont Gonzales pleaded guilty to one count of conspiracy to commit computer fraud and abuse in early March and is scheduled to be sentenced May 21, 2019.  His plea agreement includes a stipulation to a sentencing range of 12 to 30 months, subject to the approval of the court.

A change of plea hearing has been set for June 4, 2019, for Carlos Eduardo Goncalves Duran, age 33.

A federal arrest warrant is pending for Luis Mendez Mata, age. 43, who is alleged to have been part of the conspiracy to install malicious software that would allow them to direct the ATMs to dispense cash from the financial institutions.

Perez Rivas still faces charges in Washington.

Defendants convicted in the case will be jointly responsible for paying $306,200 in restitution to victim banks.

All seven defendants in the case are Venezuelan nationals.

The U.S. Attorney’s Office in Salt Lake City is prosecuting the case.  FBI Special agents are investigating the case.

A U.S. citizen and military dependent pleaded guilty today to the attempted murder of her infant child while stationed with her husband in Spain. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John W. Huber of the District of Utah, Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City, Utah Field Office and Col. Shan B. Nuckols, Commander of the Air Force Office of Special Investigations (AFOSI), 5th Field Investigations Region, Ramstein Air Base, Germany, made the announcement.

Shawna Chapman, 32, formerly of Cottage Grove, Oregon, pleaded guilty to one count of attempted second-degree murder, under the Military Extraterritorial Jurisdiction Act, before U.S. District Judge David Sam of the District of Utah.  Judge Sam scheduled Chapman’s sentencing hearing for June 5, 2019. 

According to admissions made in connection with her plea, on Feb. 10, 2016, Chapman was living in Utrera, Spain as the military dependent of her husband, who was stationed at the Moron Air Force Base in Moron, Spain.  At approximately 11:00 a.m. that day, Chapman used a knife to stab her 11-month-old daughter in the abdomen, intending to kill her.  The child suffered a life-threatening injury, requiring immediate life-saving surgery and extended hospitalization. 

FBI and AFOSI investigated the case in close cooperation with Spanish authorities.  Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Andrea Martinez and Drew Yeates of the District of Utah are prosecuting the case. 

The Department of Justice gratefully acknowledges the government of Spain, to include the Ministry of Defense, the Judicial Police of Utrera and the Civil Guard for their extraordinary efforts, support, and professionalism in responding to this incident.

SALT LAKE CITY – A former Defense Intelligence Agency (DIA) officer, taken into federal custody by the FBI in June 2018 as he was preparing to board a flight to China, pleaded guilty Friday afternoon to attempting to communicate, deliver, or transmit information involving the national defense of the United States to the People’s Republic of China.

Ron Rockwell Hansen, 59, a resident of Syracuse, Utah, entered his guilty plea before U.S. District Court Judge Dee Benson in Salt Lake City.  The plea agreement includes a stipulated sentence of 180 months, subject to the approval of the Court. Sentencing in the case is set for Sept. 24, 2019, at 2 p.m. 

Hansen pleaded guilty to the lead count of a 15-count indictment returned in June 2018, charging him with attempt to gather or deliver defense information, acting as an agent of a foreign government, bulk cash smuggling, structuring monetary transactions, and smuggling goods from the United States.  Federal prosecutors will ask the Court to dismiss the remaining counts of the indictment at sentencing, however, the plea agreement includes an agreement that relevant conduct can be considered by the Court in determining the reasonableness of the sentence.

Hansen retired from the U.S. Army as a Warrant Officer with a background in signals intelligence and human intelligence.  He speaks fluent Mandarin-Chinese and Russian, according to court documents. Upon retiring from active duty, DIA hired Hansen as a civilian intelligence case officer in 2006. Hansen held a Top Secret clearance for many years, and signed several non-disclosure agreements during his tenure at DIA and as a government contractor. 
As Hansen admitted in the plea agreement, in early 2014, agents of a Chinese intelligence service targeted him for recruitment, and he began meeting with them regularly in China.  During these meetings, the agents described to Hansen the type of information that would interest Chinese intelligence.  Hansen stipulated that during the course of his relationship with Chinese intelligence, he received thousands of dollars in compensation for information he provided them.

Between May 24, 2016, and June 2, 2018, Hansen admitted he solicited national security information from an intelligence case officer working for the DIA.  Hansen admitted knowing that the Chinese intelligence services would find the information valuable, and he agreed to act as a conduit to sell that information to the Chinese.  He advised the DIA case officer how to record and transmit classified information without detection, and how to hide and launder any funds received as payment for classified information.  He admitted he now understands that the DIA case officer reported his conduct to the DIA and subsequently acted as a confidential human source for the FBI.

Hansen admitted meeting with the DIA case officer on June 2, 2018, and receiving individual documents containing national defense information that he had previously solicited.  The documents he received were classified. The documents included national security information related to U.S. military readiness in a particular region -- information closely held by the federal government. Hansen did not possess a security clearance nor did he possess a need to know the information contained in the materials. 

As a part of his plea agreement, Hansen admitted he reviewed the documents, queried the case officer about their contents, and took written notes which contained information determined to be classified.  He advised the DIA case officer that he would remember most of the details about the documents he received that day and would conceal notes about the material in the text of an electronic document he would prepare at the airport before leaving for China.  He admitted he intended to provide the information he received to the agents of the Chinese Intelligence Service with whom he had been meeting.  He also admitted knowing that the information was to be used to the injury of the United States and to the advantage of a foreign nation.

Hansen was arrested June 2, 2018, on his way to the Seattle-Tacoma International Airport in Seattle, Wash., to board a connecting flight to China.

As a part of the plea agreement, Hansen has agreed to forfeit property acquired from or traceable to his offense, including property used to facilitate the crime.

The case was handled by Assistant U.S. Attorneys Robert A. Lund, Karin Fojtik, Mark K. Vincent and Alicia Cook of the District of Utah, and Trial Attorneys Patrick T. Murphy, Matthew J. McKenzie and Adam L. Small of the National Security Division’s Counterintelligence and Export Control Section.  Prosecutors from the U.S. Attorney’s Office for the Western District of Washington assisted with this case.
 
The prosecution is the result of an investigation by special agents of the FBI, IRS-Criminal Investigation, U.S. Department of Commerce, the U.S. Department of Defense, U.S. Army Counterintelligence, and the Defense Intelligence Agency. 

SALT LAKE CITY – A federal indictment unsealed Wednesday afternoon charges two individuals with violations of federal law involving the alleged straw purchase of a Beretta PX4 Storm .40-caliber handgun.  The handgun was purchased from a federal firearms dealer in Salt Lake City on Sept. 8, 2018.

The firearm remained in the possession of one of the defendants until Oct. 17, 2018, when he loaned it to an acquaintance, identified in the indictment as M.S.R.  Five days later, Melvin Rowland used the Beretta to kill University of Utah student Lauren McCluskey.

The indictment alleges Sarah Emily Lady, age 24, of Mapleton, Utah, and Nathan Daniel Vogel, age 21, of Millcreek, Utah, knowingly made false and fictitious statements intended to deceive a firearms dealer while purchasing the firearm.  The indictment alleges Lady falsely answered “yes” to a question asking whether she was the actual buyer of the firearm knowing that Vogel was the intended actual purchaser of the firearm. 

 A straw purchase happens when someone lies on an ATF form to purchase a firearm for an individual who is prohibited from owning a gun or an individual who does not want to wait for the completion of a background check.  Lying on federal forms to purchase a firearm for someone is illegal.

“Lauren McCluskey’s death was tragic and heartbreaking.  We join so many others in offering our condolences to her family and friends,” U.S. Attorney John W. Huber said today.  “While we cannot change what happened that October night in Salt Lake City, we can say that without the conduct alleged in this indictment, this particular handgun would not have been used to take Lauren’s life.”
 
“The laws of the United States offer safety and predictability when we abide by them.  Straw purchases are prohibited under federal law for a reason,” Huber said. “When a firearm is unlawfully acquired or transferred, the firearm ends up in the wrong hands and violence brings tragedy to our community,” Huber said.  

This indictment does not allege that the defendants were responsible for Miss McCluskey’s death.

“Lying on a federal form to purchase a firearm has very serious consequences,” said ATF Denver Special Agent in Charge Debbie Livingston. “The ATF form 4473 clearly states that making a false statement or misrepresenting one’s self is punishable as a felony under federal law. The consequences of lying goes beyond imprisonment for the individual who fills out the form, it puts the community and public at risk. Our condolences go out to Lauren’s family and friends who have suffered because of conduct related to the straw purchase alleged in this indictment.”

“The University of Utah, Department of Public Safety would like to thank the United States Attorney’s Office and ATF for their assistance with this case. We value the relationship we have with our federal partners,” Dale G. Brophy, Chief of Police at the University of Utah, said. 

The charges allege Lady and Vogel conspired to defraud the United States by impeding and obstructing the functions of the ATF in enforcing federal firearms laws and preventing illegal firearms trafficking through the straw purchase of a firearm.

The indictment alleges Lady and Vogel made false statements on the ATF form to circumvent Vogel’s background check and waiting period, because Vogel wanted the firearm immediately. Vogel was “generally discharged” from the Army and was fearful that he could not purchase a firearm without a delay, the indictment alleges.

Between Aug. 30, 2018, and Sept. 8, 2018, Lady and Vogel made plans to meet at a firearms store in Salt Lake City so Vogel could identify the firearm he wished to own and Lady could purchase it for him. The indictment alleges Lady and Vogel text messaged 13 times to arrange the meeting.  When they got to the store on Sept. 8, 2018, Lady and Vogel looked at several firearms and Vogel asked questions of the sales person. Vogel pointed out the Beretta handgun, asked the sales person questions about the firearm, and handled it.  He gave the Beretta back and moved to the ammunition area of the business to obtain ammunition for the firearm.

Shortly after, Lady began the purchase of the Beretta, answering yes to the question asking if she is the actual transferee/buyer of the firearm.  The firearms licensee conducted a background check on Lady that took about 10 minutes and allowed her to purchase the firearm and ammunition. Immediately after the purchase, Lady handed the firearm to Vogel, the indictment alleges.        

Lady was arrested Tuesday in Utah and had an initial appearance Wednesday afternoon before U.S. Magistrate Judge Brooke C. Wells.  She entered a plea of not guilty to the charges in the indictment.  A three-day jury trial was set for May 20, 2019. She was released on conditions of supervised release – including no contact with the co-defendant in the case and a prohibition on possession of firearms or weapons. 

An arrest warrant is pending for Vogel. 

The maximum potential penalty for a false statement during the acquisition of a firearm is 10 years in federal prison.  The conspiracy could has a potential five-year sentence.

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

 

SALT LAKE CITY – Thirty-three members and associates of the Norteño street gang allegedly responsible for distributing drugs around the Salt Lake City area are facing federal charges in recently unsealed complaints filed in federal court.  During the investigation, agents seized methamphetamine and heroin headed to Salt Lake City from drug cartels in Mexico and drug proceeds from Utah headed south to cartels in Mexico.

U.S. Attorney for Utah John W. Huber, DEA District Agent in Charge Brian S. Besser, ATF Special Agent in Charge Debbie Livingston, IRS-Criminal Investigation Assistant Special Agent in Charge Tyler R. Hatcher, Salt Lake County Sheriff Rosie Rivera, and U.S. Marshal Matt Harris announced the charges today. The Salt Lake Area Metro Gang Unit assisted with the case.

The arrests in this case follow a coordinated investigation involving federal and local law enforcement partners, including the ATF, the DEA, IRS-Criminal Investigation, the Salt Lake Area Metro Gang Unit, the Salt Lake County Sheriff’s Office, and the U.S. Marshals Service’s VFAST

Twenty-seven individuals are charged in one complaint. Six other individuals are charged in five separate complaints.

The charges are the result of an investigation that started in June 2018 when the Metro Gang Unit and the ATF began targeting drug and firearms trafficking activities of Salt Lake City gang members, specifically Norteños.  DEA joined the investigation in August 2018, according to the complaint.

As noted in the complaint, gang investigators documented Utah’s first Norteño group in the mid-1980s, followed by several other sub-sets in the early 1990s.  Unaligned or independent street gangs began associating under the Norteño umbrella in the early 2000s.  According to the complaint, the Salt Lake Valley has approximately 10 active Norteño sub-sets, with approximately 100-150 active Norteño gang members.  Norteños in the Salt Lake Valley have been responsible for drive-by shootings, aggravated assaults, robberies, and homicides, the complaint says.

As a part of this proactive investigation, agents used court-authorized investigative tools to learn that Joe Gomez aka Norte Joe, age 32, and Denny Kandt aka Casper, age 41, were working with Mexican drug cartel members to distribute drugs originating from cartels in Mexico in and around the Salt Lake Valley, the complaint alleges.

The complaint alleges Gomez received shipments of methamphetamine and heroin sent by Mexico-based drug traffickers identified as Pedro LNU (Last Name Unknown) and Luis LNU and a Los Angeles-based drug trafficker referred to as UM4192 in the complaint.

The complaint also alleges Kandt, a Salt Lake City-based drug trafficker, supplied Gomez with methamphetamine. Gomez and Kandt supplied drugs to various Salt Lake City-based sub-distributors.  Other Salt Lake City distributors, on occasion, supplied Gomez with drugs, the complaint alleges.

During the investigation and the execution of search warrants at several locations, agents seized approximately 30 pounds of methamphetamine, 2 pounds of heroin, and more than 19 firearms.

Investigators have identified 26 distributors or couriers involved in Gomez’s organization. Many of these distributors are known gang members or gang affiliates.  Many are associated with sub-sets of the Norteño gang. 

Throughout the investigation, agents intercepted communications indicating that representatives for the Mexico-based drug traffickers stayed at Gomez’s residence, while drugs were being distributed, to ensure that proceeds were collected and turned over to Pedro LNU and Luis LNU. Agents conducted a number of controlled drug purchases from Gomez and Kandt.

During the course of the investigation, agents seized both drugs and money from this alleged drug trafficking organization.  Agents have seized drug proceeds headed to cartels in Mexico, as well as heroin and methamphetamine headed to Salt Lake County originating from cartels in Mexico. 

For example, during the investigation, agents learned that on October 17, 2018, Gomez sent Jessica Rice and Angel Cordova to Los Angeles to pick up 20 pounds of methamphetamine and half a kilogram of heroin provided by Pedro LNU sand Luis LNU.  Based on the evidence gathered during the investigation, agents seized this delivery of 20 pounds of methamphetamine and a half-kilogram of heroin.  Gomez received drug quantities of this level with some regularity throughout the investigative time period, sometimes on a monthly basis. 

On another occasion, agents seized drug proceeds in the form of cash that was destined to arrive in the hands of the Mexican cartel.  Some $19,820 in drug proceeds were interdicted on November 1, 2018, near Nephi, Utah. Investigators believe these seizures represent a fraction of the drug trafficking carried out by Gomez and his associates during the course of this investigation.

The complaint alleges the defendants were engaged in a typical drug trafficking scheme involving:

• Importation of drugs from Mexico into the United States
• Transportation of drugs to a destination area (Salt Lake City)
• Distribution of drugs to a re-distributors who distribute the drugs throughout the community
• Collection and transportation of drug proceeds
   
  27 DEFENDANTS CHARGED IN US v GOMEZ, ET AL  CONSPIRACY COMPLAINT 
   
  Count 1:         Conspiracy to distribute Methamphetamine
  Potential sentence of life in prison with a 10-year mandatory minimum, $10 million fine, and 5 years of supervised release
   
                          (These individuals are charged in both conspiracy counts)
   
  Joe Gomez aka Norte Joe, age 32
  Denny Kandt aka Casper, age 41
  Leticia Chidester, age 48
  Trevor Marsh, age 55
  Jessica Rice, age 43
  Angel Trudy Cordova,age 37
  David Calderon aka Menace, age 29
  Joshua Lee Kendall aka Criminal, age 32
  Melquiadez Ramirez aka Thumper, age 26
  Michele Vincent Gatti aka Mike, age 45
  Sulayman Sarr aka Africa, age 32
  Zachariah Matthew Coles aka Zig Zag, age 43
  Lisa Nicole Valdez Garcia, age 31
  Steven Edward Manolito, age 32
  Patrick Austin, age 50
  Danial Movahhed aka Maniac, age 32
  Jerry Lewis Jackson, age 56
  Mark Russell Cordova, age 36
  Tony Devaughn Linam aka Hoodlum, age 36
  David Soto-Acosta aka Droops, age 23
  Nicholas Dean MacNeil aka Nico, age 28
  Ashley Marie Rodriquez, age 30
  Roy Pearson, age 42  
  Dee Dee Cordova, age 47
                         
  (These two individuals are charged in this count only)
   
  Sarah Ruth Gordon, age 31
  Mayra Alejandra Gomez, age 35
  
   Count 2:         Conspiracy to distribute heroin
  Potential sentence of life in prison with a 10-year mandatory minimum, $10 million fine, and 5 years of supervised release           
   
  (These individuals are charged in both conspiracy counts)
   
  Joe Gomez aka Norte Joe, age 32
  Denny Kandt aka Casper, age 41
  Leticia Chidester, age 48
  Trevor Marsh, age 55
  Jessica Rice, age 43
  Angel Trudy Cordova,age 37
  David Calderon aka Menace, age 29
  Joshua Lee Kendall aka Criminal, age 32
  Melquiadez Ramirez aka Thumper, age 26
  Michele Vincent Gatti aka Mike, age 45
  Sulayman Sarr aka Africa, age 32
  Zachariah Matthew Coles aka Zig Zag, age 43
  Lisa Nicole Valdez Garcia, age 31
  Steven Edward Manolito, age 32
  Patrick Austin, age 50
  Danial Movahhed aka Maniac, age 32
  Jerry Lewis Jackson, age 56
  Mark Russell Cordova, age 36
  Tony Devaughn Linam aka Hoodlum, age 36
  David Soto-Acosta aka Droops, age 23
  Nicholas Dean MacNeil aka Nico, age 28
  Ashley Marie Rodriquez, age 30
  Roy Pearson, age 42  
  Dee Dee Cordova, age 47
   
  (This individual is charged in this count only)
   
  Colton McBride aka Lil Bandit, age 26
  
  SIX INDIVIDUALS CHARGED IN FIVE INDIVIDUAL COMPLAINTS
  
  Rudy Garcia aka Rascal, age 29, is charged in a complaint with distribution of methamphetamine and felon in possession of firearm.  He faces up to 40 years in prison for the drug count with a five-year mandatory minimum and up to 10 years for the firearm count.  
   
  Billie Len Collins, age 34, is charged in a complaint with distribution of methamphetamine. She faces up to 40 years in prison with a five-year mandatory minimum sentence.
   
  Davis Toki aka T-Down, age 38, is charged in a complaint with distribution of methamphetamine. He faces up to 40 years in prison with a five-year mandatory minimum sentence.
   
  Rex Myers aka Lazy, age 39, is charged in a complaint with felon in possession of a firearm. He faces up to 10 years in prison.
   
  Travis Benjamin Torres aka Shorty, age 41, and Tessie Shallamar Montoya, age 37, are charged in a complaint with distribution of methamphetamine and felon in possession of a firearm.  They face up to 40 years in prison with a five-year mandatory minimum sentence for the drug count.  The firearm count has a potential 10 years sentence.
   
  (Indictments will being filed in these five cases later today.)
   
  Arrest warrants are pending for Coles and Jackson.  Austin, Dee Dee Cordova, Mayra Alejandra Gomez and Sarr have been released.  All other defendants are in custody pending trial.  
   
  The defendants are from the Salt Lake County area.
   
  Complaints are not findings of guilt.  Individuals charged in complaints are presumed innocent unless or until proven guilty in court.
   

SALT LAKE CITY – A federal grand jury in Salt Lake City, Utah, returned a three- count indictment Wednesday morning charging Alan D. Covington with violating 18 U.S.C. § 249 (hate crime) for attacking three men with a metal pole because he believed the men were Mexican, announced Eric Dreiband, Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of  Utah; and Paul Haertel, Special Agent in Charge for the Salt Lake City Field Office of the FBI.

The indictment alleges that on Nov. 27, 2018, Covington entered the premises of a tire store, shouted that he wanted to “kill Mexicans,” and then struck L.G.L in the head with a metal pole. The indictment alleges that the attack against L.G.L. included an attempt to kill. According to the indictment, Covington also struck J.L. with a metal pole.  Both men suffered bodily injury. The indictment further alleges that Covington swung the metal pole at A.L. in an attempt to injure A.L.

An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Covington faces a maximum sentence of life in prison and a $250,000 fine.

The case is being investigated by the Salt Lake City Field Office of the FBI, with the cooperation of the Salt Lake City Police Department. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office in Utah and Trial Attorney Rose E. Gibson of the Civil Rights Division.

For more information about Department of Justice’s work to combat and prevent hate crimes, visit www.justice.gov/hatecrimes: a one-stop portal with links to Department of Justice hate crimes resources for law enforcement, media, researchers, victims, advocacy groups, and other organizations and individuals.

A federal grand jury in Salt Lake City, Utah, returned a three count indictment charging Alan D. Covington with violating 18 U.S.C. § 249 for attacking three men with a metal pole because he believed the men were Mexican, announced Eric Dreiband, Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of  Utah; and Paul Haertel, Special Agent in Charge for the Salt Lake City Field Office of the FBI.

The indictment alleges that on Nov. 27, 2018, Alan D. Covington entered the premises of a tire store, shouted that he wanted to “kill Mexicans,” and then struck L.G.L in the head with a metal pole. The indictment alleges that the attack against L.G.L. included an attempt to kill. According to the indictment, Covington also struck J.L. with a metal pole.  Both men suffered bodily injury. The indictment further alleges that Covington swung the metal pole at A.L. in an attempt to injure A.L.

An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Covington faces a maximum sentence of life in prison and a $250,000 fine.

The case is being investigated by the Salt Lake City Field Office of the FBI, with the cooperation of the Salt Lake City Police Department. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Trial Attorney Rose E. Gibson of the Civil Rights Division.

For more information about Department of Justice’s work to combat and prevent hate crimes, visit www.justice.gov/hatecrimes: a one-stop portal with links to Department of Justice hate crimes resources for law enforcement, media, researchers, victims, advocacy groups, and other organizations and individuals.

SALT LAKE CITY – Jayson Ross Orvis of Bountiful has agreed to pay $395,914 to settle a civil claim brought by the United States for costs to fight a fire that occurred on August 29, 2017, U.S. Attorney John W. Huber announced today.

The settlement includes a $14,123 payment for environmental remediation costs associated with multiple encroachments on U.S. Forest Service property in addition to the fire damage. This settlement is neither an admission of liability by Orvis nor a concession by the United States that its claims are not well founded. 

“This settlement fully compensates the public for the expense of fighting the fire and restoring these public lands,” U.S. Attorney John W. Huber said today. 

The fire, known as the “Bountiful Fire,” started Aug. 29, 2017, on Orvis’ Bountiful Bench Hillside Hollow Circle property and quickly spread to the adjacent Salt Lake Ranger District of the Uinta-Wasatch-Cache National Forest.  The fire was caused by sparks emitted from a power grinder used by James Golden, who was hired by Mr. Orvis to do work on his property.

Additionally, Orvis has forfeited $560 for two Forest Service violations that prohibit constructing, placing and maintaining structures without a permit on national forest land. During the fire investigation, it was determined that Orvis had placed a shooting pavilion and an outfitter tent on the national forest land.  Golden also forfeited $280 for a violation for carelessly and negligently placing an ignited substance that may cause a fire.  The criminal Information in this matter has been dismissed.

“When offenders attack law enforcement officers, they attack the individuals who protect us and help maintain law and order in our nation.  Each account of a fallen officer is an indescribable tragedy for the family, colleagues, and friends of the officer.  As community members, we share this pain and sense of loss.  Unfortunately, the headlines describing these attacks are becoming all too common.  In Utah, officers are no less immune to violence than those injured in recent weeks in Houston and Denver; or those who lost their lives in Sacramento and Mobile in January or in Milwaukee this week. 

“Utah officers David Romrell of South Salt Lake and Joseph Shinners of Provo offered the ultimate sacrifice for our state and nation in December and January. These tragedies do not need to happen.  Their families should not have to bear this heavy burden.  As a nation, state, and community, we cannot tolerate attacks on those who protect our property and us.  We must work together for answers to help curb violence against law enforcement officers.

“I am joining a chorus of other United States Attorneys across our nation to renew our pledges this week to support the men and women of law enforcement, to remember their sacrifices, and to hold accountable those who dare focus violence upon them.  In Utah, we should look for opportunities to express gratitude to law enforcement officers; and to encourage respect for them in our communities and within our families.  Law enforcement professionals protect us every day.  We should return the favor and have their backs, too.  #BackTheBlue.”

SALT LAKE CITY – A federal grand jury returned an indictment Wednesday afternoon charging Rolando Gomez-Gomez, a Guatemalan national residing in Los Angeles, with three counts of transporting an alien for financial gain and one count of re-entry of a previously removed alien.

The charges in the indictment allege that Gomez-Gomez knowingly transported individuals, who were in the country illegally, within the United States for financial gain.

Gomez-Gomez was arrested Jan. 29, 2019, following a traffic stop in Summit County.  Summit County Deputy Sheriff Vincent Nguyen, who is also a task force officer for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, executed a traffic stop on a vehicle. Gomez-Gomez, who was driving the vehicle, produced a Guatemalan driver’s license with characteristics indicating it could be fraudulent.  The officer observed numerous male passengers in the back of the van.  HSI special agents and officers with ICE Enforcement and Removal Operations joined Deputy Nguyen in continuing the investigation and eventually transported nine individuals to the ICE field office in West Valley City.

In addition to charges against Gomez-Gomez, the three individuals referred to by initials in the indictment are being charged with illegal re-entry of a previously removed alien. The remaining five, including three minors, will be processed as appropriate by ICE ERO.    

Gomez-Gomez, who was initially arrested for possession of a fraudulent Guatemalan identification card, has been deported from the United States four times.

The defendant is scheduled to make an initial appearance on the indictment Thursday at
3 p.m. before Chief U.S. Magistrate Paul M. Warner. An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

The potential maximum penalty for each count of conspiracy to transport aliens is 10 years in prison.  Re-entry of a previously removed alien has a two-year potential maximum sentence.

SALT LAKE CITY -- Benjamin D. George and Jody C. Rookstool, and their company, Western Medical Group, have agreed to pay $1,634,844 million to settle False Claims Act allegations, U.S. Attorney for Utah John W. Huber announced today. The settlement concerns conduct initiated by Western Medical and concludes two qui tam actions filed by whistleblowers in December 2013 and February 2014.

The settlement resolves allegations that the company caused the submission of false claims to Medicare. Complaints were based primarily on allegations surrounding Western Medical’s use of a telemarketing scheme to sell knee and back braces to Medicare beneficiaries.  The United States alleged that the company violated Medicare’s prohibition against telephone solicitation of covered products to beneficiaries.

“Misuse of taxpayer dollars is something we take very seriously.  We use the False Claims Act as a tool to protect the public and recover taxpayer dollars that were lost through fraud.  We vigorously pursue these cases on behalf of Utah taxpayers. The money recovered will be put back into federal health care programs where it can be used to provide medical services for the elderly and disable,” U.S. Attorney Huber said today.

“The FBI takes health care fraud seriously and we work closely with our federal partners to identify, investigate and prosecute the crime,” said Eric Barnhart, Special Agent in Charge of the FBI’s Salt Lake City Field Office.  “The public should beware of telemarketers who make direct telephone solicitations with no legitimate medical referral and attempt to induce them into purchasing medical products.  Promises to waive co-payments or efforts to bypass one's legitimate prescribing physician are signs of a fraudulent operation.  The FBI and its partners also applaud those who blow the whistle on fraud.  It’s an act of courage to come forward and share one's observations with law enforcement.”

Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Region, stated, “Healthcare providers who improperly bill our programs at the expense of taxpayers will be pursued and held accountable for their actions.” 

The United States’ investigation began with two qui tam complaints filed by former Western Medical employees. The qui tam provisions of the False Claims Act allow for whistleblowers, or relators, to file suit for violations of the Act on behalf of the United States.

This matter was investigated by the U.S. Department of Justice, the Utah U.S. Attorney’s Office’s Affirmative Civil Enforcement Section, the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Office of Personnel Management (OPM).

 The cases are docketed as United States ex rel. Craig Bearden v. Arizona Medical Supply, LLC, dba Western Medical and Senior First Medical; KMR Medical, LLC; KPM Capital, LLC; Privacy Maxx, LLC; and Jody Rookstool, No. 2:13-cv-01127 and United States, ex rel., Michelle Boucher, P.A., v. KPM Capital, LLC dba Western Medical Group; KMR Medical LLC; Jody Rookstool; Benjamin George; David Nolan; John Does #1-100, Ficticious Names, No. 2:14-cv-00092.

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

SALT LAKE CITY – A federal indictment unsealed Friday charges Daron Howell Fordham, age 49, of Las Vegas with six counts of mail fraud in connection with what the indictment alleges was a direct mail fraud scheme that defrauded hundreds of investors across the country, including many elderly and disabled individuals.

According to the indictment, Fordham, aka Southboy, Daron Destiny, Paul Park, James Parker, Daron Howell and Darren Fordham, set up a mailbox at a UPS Store in Park City using the name Park Publishers and Distributors.  He paid a printing service in California to send out hundreds of mailers soliciting people to invest in his direct mail program which had several variations.  The mailers offered an opportunity to make money through a “direct partner program” called “Paul Park’s Profit Program,” listing a Park City address as the company address for responses. 

The indictment alleges Fordham’s mailer induced individual investors to send money to the address with fraudulent claims and guarantees, including telling individuals they could make a 976 percent return (or more) in less than 90 days without doing any work. “All you have to do is invest in the printing and mailing of our hot-selling FREE CRUISE FOR TWO VOUCHERS (like the one included with this letter) that are used by businesses all across the country.  WE DO ALL THE WORK! You decide how many Mailing Spots you want now and you’ll receive your Principal Check sand PROFIT Check in less than 90 days.  Trust me.  You’ll be upset if you miss this one.”

He told investors, the indictment alleges, they could invest $500 and get a “whopping gross return of $5,570 with $5,070 of it being PURE PROFIT FOR You.” 

The indictment further alleges that between January and November 2014, Fordham negotiated or caused to be negotiated at least $1,596,642.14 in checks and money orders related to eight fraudulent promotional schemes, including at least $203,866.25 through the Park Publishers fraudulent promotional mailer scheme.

When investors requested refunds or on the date of the promised dividend payment, Fordham provided customers a previously unmentioned gift card voucher equal to the investment, which could only be used toward an additional business venture by Park Publishers or its affiliate partners.  He also provided a full credit refund certificate, which investors could not redeem for any monetary value, good or service.  Eventually, Fordham closed the Park City mailbox so that victims’ letters requesting a refund or inquiring about their promised return on their investment were returned as undeliverable.  An 800-number was also disconnected, leaving victims unable to contact Fordham, the indictment alleges.

Fordham is charged with six counts of mail fraud in the indictment.  He was arrested in Las Vegas where he had an initial appearance on the charges and was released on conditions.  Fordham was arraigned on the charges Tuesday morning in federal court in Salt Lake City.  Chief Magistrate Judge Paul M. Warner presided at the hearing.  He entered a plea of not guilty to the six counts in the indictment.  Trial was set for Jan. 28, 2019.

Federal prosecutors are seeking detention in the case and are asking U.S. District Judge Dee Benson to review the Nevada magistrate’s decision to release Fordham.  Judge Benson will hear the appeal Tuesday at 2 p.m.

Each count of mail fraud carries a potential 20-year sentence.

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

“Jeff Sessions served with distinction as the nation’s 84th Attorney General.  During his tenure, he magnified the impact of his service.  He reinvigorated and motivated federal, state and local law enforcement professionals to perform at the highest levels and produce results on behalf of their communities.  He advanced President Trump’s priorities with strong leadership and purposeful expectations. 

“Utah has directly benefitted from Attorney General Sessions’ leadership.  After two years of sharp increases in Utah’s violent crime rates, we saw an 8 percent decrease last year as a direct result of Attorney General Sessions’ leadership.  The trajectory he set in the Department of Justice will continue to serve our nation on multiple fronts – against immigration crime, violent crime, transnational criminal organizations, and the heroin and opioid crisis.

“Personally, I am grateful for the opportunity to have served as an advisor to Attorney General Sessions.  He is a dedicated public servant – with decades of service as a U.S. Attorney, a U.S. Senator, and as the Attorney General of the United States.  More importantly, I have come to know him as a kind and gracious gentleman, sincere in his desire to make our nation an even better place.

“I look forward to working under the leadership of the next Attorney General, and will continue to pursue the rule of law priorities of President Trump.”

 

SALT LAKE CITY – Residents of Weber County, Ogden, and neighboring communities are invited to attend a free consumer education seminar in Ogden Thursday, Nov. 15, 2018, to learn how to recognize and avoid financial fraud schemes.

The seminar will provide information on key questions to ask before making investment decisions, where to find free and unbiased information, how to spot financial scams, and how to report suspected fraud. 

The event will be in the Commission Chambers at the Weber Center at 2380 Washington Boulevard in Ogden. It will go from 5 p.m.to 8 p.m. There is no cost to attend and a free light dinner will be provided. Parking is available east of the Weber Center. Those who would like to attend should register at www.utfraud.com or call 801-579-6191 as soon as possible.   

U.S. Attorney John W. Huber is encouraging residents in the Weber County area to take advantage of the seminar.  “Utah is a wonderful place to live.  Unfortunately, however, Utah is known as a hotbed for fraud and white-collar crime.  We see a variety of schemes in Utah – from Ponzi schemes, securities fraud, affinity fraud schemes targeting family or church members to telemarketers convincing our residents that they have won a multi-million dollar lottery prize.  Residents of our state are trusting people – which can make us easy targets for fraudsters,” Huber said.   

The Ogden event is part of a collaborative effort called the Utah Financial Fraud Institute.  Agencies participating in the initiative are providing free seminars around Utah to help Utahns avoid becoming victims of fraud schemes.

Agencies involved in the effort include the U.S. Attorney’s Office, the U.S. Securities and Exchange Commission (SEC), the Weber County Attorney’s Office, the FBI, the Utah Division of Securities, the Financial Regulatory Authority (FINRA), the Utah Division of Consumer Protection, the Utah Attorney General’s Office, and the IRS.  Other sponsors include the U.S. Commodity Futures Trading Commission, the American Association of Retired Persons (AARP), the Utah Retirement Systems, Utah Adult Protective Services, the Better Business Bureau, and the Department of Veterans and Military Affairs. 

The evening will include an opportunity to enjoy a light dinner and browse informational booths from 5-5:30 p.m.  The seminar will start at 5:30 p.m.  Chief Magistrate Judge Paul M. Warner from federal court in Salt Lake City will give the keynote address at 5:40 p.m.

Two panel discussions will follow the keynote address starting at 6 p.m.  The first panel will focus on investor fraud and will highlight ways to recognize and avoid investment fraud.  The second panel will highlight consumer fraud issues and ways to avoid these of fraud schemes. Representatives from several of the sponsoring agencies are joining the two panel discussions.

 

SALT LAKE CITY – John W. Huber, United States Attorney in Utah, shared the following statement with leaders of Utah’s faith communities Friday afternoon:

“In the wake of the horrific and senseless act of violence that took place in Pittsburgh, I echo the words of our United States Attorney General that hatred and violence on the basis of religion can have no place in our society. As the chief federal law enforcement official in the State of Utah, I promise you that I will bring the full weight of the federal government to bear against anyone who would attempt to violate the most fundamental civil right in our country, the right of citizens to practice a religion of their choosing.

“In addition to that promise, I would be honored to assist you, along with our law enforcement partners, in any proactive planning or discussions regarding the safety of your faith-related buildings and the congregants who assemble inside of them. We would be happy to help provide safety training for your congregations or to assist you in obtaining safety related assessments of your infrastructure from our partners at the FBI and DHS. If you are interested in taking advantage of any of these cost-free assessments or trainings, please contact my deputy Andy Choate, at Andrew.choate@usdoj.gov. 

 “Thank you for all that you do for our communities and for your help in ensuring that Utah remains a place where everyone feels safe to worship as they choose.”  

 

 

SALT LAKE CITY – In anticipation of Tuesday’s general elections, United States Attorney John W. Huber announced today that Assistant U.S. Attorney Lake Dishman will serve as the election day officer for the District of Utah.  He will coordinate with election officials 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.  It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office or the FBI,” Huber said.

“Voting rights are constitutional rights, and they’re part of what it means to be an American,” Attorney General Jeff Sessions said. “The Department of Justice has been entrusted with an indispensable role in securing these rights for the people of this nation.  This year we are using every lawful tool that we have, both civil and criminal, to protect the rights of millions of Americans to cast their vote unimpeded at one of more than 170,000 precincts across America.  Citizens of America control this country through their selection of their governmental officials at the ballot box. Likewise, fraud in the voting process will not be tolerated. Fraud also corrupts the integrity of the ballot.”

Election-crime complaints related to election fraud or voting rights abuses in Utah should be referred to Dishman. He can be reached at 801-325-1409 while the polls are open and until one hour after the polls close. He can also be contacted in the days following the election.

In addition, the FBI in Salt Lake City will have special agents available throughout the day to receive allegations of election fraud and other election abuses. The FBI can be reached at 801-579-1400.    

Complaints related to violence, threats of violence, or intimidation at a polling place should always be reported immediately to local law enforcement authorities. They should also be reported to the U.S. Attorney’s Office and the FBI after local authorities are contacted.

The Department of Justice’s Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote, and with the criminal provisions of federal statutes prohibiting discriminatory interference with that right.

The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including the Voting Rights Act, the Uniformed and Overseas Citizens Absentee Voting Act, the National Voter Registration Act, the Help America Vote Act, and the Civil Rights Acts.  Among other things, these laws:

• prohibit election practices that have either a discriminatory purpose based on race or membership in  a minority language group or a discriminatory result such that members of racial or language  minority groups have less opportunity than other citizens to participate in the political process; • prohibit intimidation of voters; • provide that voters who need assistance in voting because of disability or illiteracy can obtain  assistance from a person of their choice (other than agents of their employer or union); • provide for accessible voting machines for voters with disabilities; • provide for provisional ballots for voters who assert they are registered and eligible but whose  names do not appear on poll books; • provide for absentee registration and ballots for uniformed service members, their family members  and U.S. citizens living abroad; • provide that citizens can register to vote through drivers’ license, public assistance or disability  services offices, and through the mail; and
• include requirements regarding maintaining voter registration lists.

The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.

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. 
 
Mistakes by election administrators, violations of state laws governing how elections are to be conducted, the accuracy of campaign literature, campaigning too closely to voting locations, the process by which candidates qualify for ballot status and events that occur in the course of political campaigns generally are not appropriate for federal prosecution, although such matters may violate state election laws.

Anyone with questions about local voting procedures should call their county clerk’s office.

 

SALT LAKE CITY – A federal grand jury in Salt Lake City returned a second superseding indictment Thursday morning in the Aaron Michael Shamo case.  The 13-count indictment alleges a count of aiding and abetting the distribution of a controlled substance (fentanyl) resulting in death.

The indictment alleges that Shamo intentionally and knowingly distributed a substance containing Fentanyl, the use of which resulted in the June 13, 2016, death of a person identified as R.K. in the indictment. 

The superseding indictment charges one count of Continuing Criminal Enterprise; three counts of aiding and abetting the importation of a controlled substance; one count of possession of a controlled substance with intent to distribute, one count of manufacture of a controlled substance and two counts of knowing and intentional adulteration of drugs while held for sale.  It also includes one count of aiding and abetting the use of the U.S. mail in furtherance of a drug trafficking offense, one count of conspiracy to commit money laundering, one count of money laundering promotion and concealment, and one count of engaging in monetary transactions in property derived from specified unlawful activities – in addition to the distribution resulting in death count.

The indictment alleges Shamo directed an international drug trafficking organization that imported Fentanyl and Alprazolam from China and manufactured controlled substances, namely fake oxycodone pills made with Fentanyl and counterfeit Xanax tablets. Documents filed by federal prosecutors as a part of the case allege Shamo and his co-conspirators purchased pill tableting machines – sometimes called pill presses – to mark pills so the markings would match those of legitimate pharmaceutical drugs.  The organization distributed these controlled substances to other individuals for distribution throughout the United States and elsewhere using their storefront, PHARMA-MASTER, on the Dark Net marketplace AlphaBay and through the U.S. mail, according to the indictment and case documents.  According to a complaint filed in the case, when law enforcement officers executed a search warrant at Shamo’s house in November 2016, they found approximately 70,000 pills that had the appearance of Oxycodone and more than 25,000 pills that appeared to be Alprazolam. The drug trafficking organization distributed more than 800,000 pills.

Counts 8 and 9 of the indictment allege Shamo manufactured round blue tablets with markings on them to look like Oxycodone tablets.  He offered the tablets for sale on the internet as Oxycodone 30 mg tablets.  Despite these representations, the defendant did not use Oxycodone in the manufacturing process. He substituted Fentanyl, a much more potent synthetic opioid, the indictment alleges.    

The organization began as a collaboration between Shamo and Drew Wilson Crandall, but grew to include others.

Crandall, age 32, most recently of Brisbane, Australia, pleaded guilty in federal court Wednesday to conspiracy to distribute Fentanyl, conspiracy to distribute Alprazolam, and conspiracy to commit money laundering.  As a part of a statement in advance of the plea agreement filed in court, Crandall admitted that he and his co-defendant, Shamo, imported and distributed controlled substances in Utah and elsewhere.  He admitted they sold controlled substances on dark web marketplaces.  As he made plans to leave the country, he trained co-conspirators to assume the roles he had held in the organization. He admitted he stayed in contact with Shamo after leaving Utah and began to provide online customer support for Shamo’s vendor account on AlphaBay. This work continued until Shamo’s arrest in November 2016.

Crandall admitted that the co-conspirators each had a role to play and they relied on each other to meet their common objective: to earn money by selling drugs.

According to the plea agreement, Shamo normally paid Crandall by bitcoin while he was out of the country.  However, at his request in November 2016, Shamo deposited drug proceeds – specifically U.S. currency – into Crandall’s bank account as payment for his ongoing services to PHARMA-MASTER. 

Federal prosecutors have agreed to recommend Crandall be sentenced at the low end of the sentencing guideline range determined by the Court.  He faces up to life in prison with a mandatory minimum of 10 years in prison for the conspiracy to distribute fentanyl conviction, up to five years for the for conspiracy to distribute alprazolam, and a maximum of 20 years for conspiracy to commit money laundering.

Other defendants charged in earlier indictments have also reached plea agreements in the case. They include Alexandrya Marie Tonge, age 26, and Katherine Lauren Anne Bustin, age 28, both of South Jordan, Utah; and Mario Anthony Noble, age 29, and Sean Michael Gygi, age 28, both of Midvale, Utah. Sentencings for these defendants will be scheduled at a later date.

Shamo faces a mandatory life sentence if convicted of the Continuing Criminal Enterprise count in the indictment.  Several other counts, including aiding and abetting the importation of fentanyl, possession of fentanyl with intent to distribute and aiding and abetting the distribution of a controlled substance resulting in death carry potential life sentences.  Other counts carry potential sentences of five years to 40 years.

The indictment includes a notice that federal prosecutors intend to seek criminal forfeiture of property and proceeds derived from the alleged conduct or used to commit or facilitate the commission of the offenses.  Included in the notice is millions of dollars in U.S. currency, an industrial large pill press and associated dyes, four 100-ounce silver bars, and cash as a substitute for two vehicles sold as a part of the case – among other things.  

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

A three-week trial is set to start on Jan. 22, 2019, before U.S. District Judge Dale A. Kimball. 

Special Assistant U.S. Attorneys from the Utah Attorney General’s Office are joining an Assistant United States Attorney in the U.S. Attorney’s Office in Salt Lake City in prosecuting the case. U.S. Postal Inspectors and special agents of U.S. Immigrations and Customs Enforcement Homeland Security Investigations, the FDA, DEA Metro Narcotics Task Force in Salt Lake City, and IRS-Criminal Investigation are investigating the case.

SALT LAKE CITY – A federal grand jury in Salt Lake City returned a seven-count indictment Thursday morning charging William Clyde Allen, III, age 39, of Logan, Utah, in connection with ricin-related threats.  The indictment alleges he knowingly threatened to use a biological agent and toxin, specifically ricin, as a weapon. 

Assistant Attorney General John C. Demers of the Department of Justice’s National Security Division, U.S. Attorney John W. Huber of Utah, Special Agent in Charge Eric K. Barnhart of the FBI’s Salt Lake City Field Office, Special Agent in Charge John Gullickson of the U.S. Secret Service’s Denver Field Office, and U.S. Postal Inspector Jared D. Bingham, Team Leader in Salt Lake City, announced the indictment.

The indictment also charges Allen with one count of mailing a threat against the President and five counts of mailing threatening communications to an officer or an employee of the United States in the indictment returned Thursday morning.

Allen was arrested on a federal complaint filed Oct. 5, 2018. He was ordered detained pending resolution of the case at a detention hearing Monday. U.S. Magistrate Judge Dustin B. Pead found him to be a danger to the community.  Allen entered a plea of not guilty to the charges Thursday morning in U.S. District Court.  U.S. District Judge David Sam will preside over a four-day trial starting Dec. 26, 2018, in Salt Lake City.

The indictment alleges the defendant sent a letter to the President of the United States with the language “Jack and the Missile Bean Stock Powder” and containing castor bean material.

Five counts of the indictment charge Allen with mailing threatening communications to an officer or an employee of the United States, including Secretary of Defense James N. Mattis; Admiral John M. Richardson, Chief of Naval Operations; FBI Director Christopher A. Wray; CIA Director Gina Haspel; and Secretary of the Air Force Heather Wilson. 

Ricin naturally exists in, and may be extracted from, the seeds of the castor bean.  The extraction of ricin from these seeds does not require technical expertise.  Small doses of ricin are lethal to human beings if ingested, inhaled, or injected.  According to Center for Disease Control information, there are no known antidotes for poisoning from ricin. Allen purchased 380 castor beans in December 2017 in quantities of 100 (two purchases) and 30 (six purchases).

The potential maximum penalty for threatening to use a biological toxin as a weapon is life in prison.  Mailing a threat against The President has a potential maximum penalty of five years in prison and mailing a threatening communications to an officer or an employee of the United States has a potential 10-year sentence.

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

The U.S. Attorney’s Office in Salt Lake City, with the assistance of the Department of Justice’s National Security Division’s Counterterrorism Section, is prosecuting the case.   U.S. Postal Inspectors and special agents of the FBI and U.S. Secret Service are investigating the case.

SALT LAKE CITY – Three individuals charged in a superseding indictment with conspiracy to transport hundreds of pounds of marijuana from California to Utah and throughout the United States were arraigned on the charges in federal court Friday morning.  The indictment alleges the defendants used the drug organization to generate millions of dollars in marijuana cash proceeds to support various business ventures.

Charged in the indictment are Gabriel Seth Elstein, age 33, and Angela Christina Elstein, age 32, both of Park City, and Scott Dale Gordon, age 48, of St. George.  A Utah company, Dumbles Holdings, LLC, is also named in the indictment.  The Elsteins are managing members of Dumbles Holdings, which was established in 2015 with offices in Salt Lake City.

In addition to the drug trafficking conspiracy count, the 13-count indictment charges possession with intent to distribute a controlled substance, conspiracy to commit money laundering, promotion of money laundering, concealment money laundering, and money laundering. The indictment alleges the defendants obtained sizable quantities of marijuana for distribution from wholesale marijuana suppliers in northern California and recruited drivers to deliver marijuana loads from California to Salt Lake City, Minnesota, Illinois, and Wisconsin. They then utilized retail distributors to sell the marijuana in destination cities.

The indictment alleges the defendants committed overt acts in furtherance of the alleged drug distribution conspiracy.  According to the indictment, the defendants used multiple marijuana suppliers and hired multiple drivers to transport the marijuana to Utah and around the country.

Count 4 of the indictment charges the three with conspiracy to commit money laundering. It alleges the defendants took steps designed to conceal and disguise the nature, location, source, ownership, and control of the proceeds of the drug trafficking organization.  The count alleges that from at least April 2007 through December 2013, the defendants purchased and distributed at least 2,500 pounds of marijuana and laundered at least $5 million in marijuana drug proceeds through Bondad Productions, a business that promoted electronic music/rave shows, and The Complex, both Salt Lake City businesses.

Beginning in 2009 and continuing to September 2010, Gordon and Elstein began construction on a music venue called The Complex.  The cost of the construction was at least $1.3 million.  The indictment alleges that approximately $400,000 came from marijuana cash proceeds previously laundered through Bondad Productions and The Complex bank accounts.  The remaining amount of approximately $900,000 was marijuana cash proceeds paid directly to companies and individuals involved in the construction.   Specifically, the indictment alleges that Gordon made cash payments to an individual referred to as L.M., in the indictment.  L.M. was functioning as the foreman for the construction project and was responsible for paying the construction companies involved in the project. The payments Gordon made to L.M. were shrink-wrapped plastic bags in $50,000 increments and made on almost a weekly basis.

The indictment further alleges that Gordon used marijuana cash proceeds to pay expenses for music shows.

“When it comes to marijuana, it’s all about the cash.  Sophisticated organizations are driven by profits to exploit the insatiable desire for drugs in America.  This multi-year investigation required the professional attention of federal agents with IRS-Criminal Investigation and the DEA Metro Narcotics Task Force.  Without their hard work, there would not be consequences for drug traffickers and their associates who would try to hide under a disguise of seemingly lawful enterprise,” U.S. Attorney John W. Huber said today.  “In Utah, the United States Attorney will pursue justice for marijuana criminal organizations who operate outside the bounds of the law.”
 
The indictment also seeks forfeiture of property derived from the proceeds of the alleged criminal conduct including The Complex located at 536 West 100 South, Salt Lake City and two properties in Park City located at 7467 Tall Oaks Circle and 4268 Hilltop Drive. The Complex is not being shut down and will remain open.   

Gabriel Seth Elstein and Scott Dale Gordon were initially charged in an indictment returned in February.  Both were released on conditions of pre-trial release. Angela Christina Elstein was added to the superseding indictment in September.  She was released at Friday’s hearing.

The defendants face a potential mandatory-minimum sentence of 10 years to life in prison if they are convicted of the conspiracy to distribute count in the indictment.  They pleaded not guilty to the charges at Friday’s hearing and the case was set for trial on Dec. 14, 2018, before U.S. District Judge Clark Waddoups.   Indictments are not findings of guilt.  Defendants charged in indictments are presumed innocent unless or until proven guilty in court. 

Special agents of IRS-Criminal Investigation and the DEA Metro Narcotics Task Force are investigating the case.  Federal prosecutors in the U.S. Attorney’s Office in Salt Lake City are prosecuting the case.

 

SALT LAKE CITY – Federal prosecutors in Salt Lake City have unsealed charges alleging three individuals operating a drug trafficking organization traveled from Phoenix to Salt Lake City in August and kidnapped a 17-year-old boy at gunpoint from his mother’s Utah business while trying to collect a heroin-related drug debt.

The defendants conducted surveillance on a business in West Valley City operated by the victim’s mother for two days before striking.  They entered the business and demanded more than $20,000 in compensation for heroin that was seized as evidence by law enforcement officers when she was stopped while transporting the drugs from Minneapolis to the Salt Lake valley.  The defendants, according to a complaint in the case, told her she was responsible not only for the cost of the kilogram of heroin seized from her on Aug. 11, 2018, but was also responsible for heroin seized from another member of the drug trafficking organization.

Charged in the case are Oscar Rene Chacon Lopez, age 26, a Honduran citizen living in Nogales, Sonora, Mexico; and Jeanette Mejia, age, 25, Juan Carlos Moreno Trinidad, age 41,  Nadia Carolina Avalos, age 33, and Issa Jassim Al-Sadoon, age 26, all of Phoenix. 

The defendants are charged with one count of conspiracy to distribute heroin in a federal indictment.  Chacon, Moreno, Avalos and Al-Sadoon are charged with kidnapping and Hobbs Act extortion in the indictment.  Moreno, Avalos and Al-Sadoon are charged with brandishing a firearm in furtherance of a drug trafficking offense and Chacon and Mejia are charged with conspiracy to commit money laundering.

The case stems from an investigation into a drug trafficking organization conducted by the Utah County Major Crimes Task Force and the Salt Lake City Division of the FBI. The West Valley City Police Department has also assisted with the case.

 The complaint alleges the investigation has established that the defendants charged in the case have conspired with others to distribute 1000 grams or more of heroin in Utah. 

The complaint alleges the individuals conspired to commit overt acts in furtherance of the drug trafficking conspiracy.  Law enforcement officers seized approximately 990 grams of heroin and 28 grams of cocaine during the execution of a search warrant at a storage unit in West Jordan on April 10, 2018.  During a traffic stop in Sandy on the same day, investigators seized 638 grams of heroin, 43 grams of cocaine, and $1,300. Later the same day, investigators seized approximately 567 grams of heroin, 17 grams of cocaine, $2,195 in cash, and packaging material consistent with illegal drug distribution during the execution of a search warrant in Magna. 

The juvenile victim was abducted on Aug. 13, 2018.  The victim called his mother and told her he had been taken by men who wanted money from her.  She also received a short video of the inside of her truck demonstrating the kidnappers had also stolen her truck.  In the following hours, Chacon sent numerous typed text messages and recorded voice messages.  The complaint alleges the juvenile was kidnapped because of a drug debts and he would only be released unharmed if she did what she was told and deposited cash into bank accounts he had provided. He threatened her son and other children at her home with physical violence. Chacon made it clear he directed the kidnappers in Utah and that her son would be released only after he was paid at least $10,000.

FBI agents, Utah County Major Crime Task Force detectives, and West Valley police officers were able to locate and remove the juvenile victim later that evening from a Salt Lake County hotel room and return the juvenile unharmed to his home.  Chacon, Moreno, Al-Sadoon and Avalos were charged in a complaint filed Aug. 20, 2018. Mejia was added as a defendant in the case when it was presented to a grand jury Sept. 4, 2018. 

The maximum potential for the heroin conspiracy charge is life in prison with a 10-year mandatory minimum sentence.  The potential penalty for brandishing a firearm during a drug trafficking offense is 7 years in prison.  Kidnapping carries a potential life sentence with a 20-year mandatory minimum sentence. The Hobbs Act extortion count and the conspiracy to commit money laundering both have potential 20-year sentences.

Moreno, Al-Sadoon, and Avalos have been arraigned on the charges in the indictment and have entered pleas of not guilty to the charges.  A five-day jury trial has been set for Nov. 13, 2018, before U.S. District Judge David Sam.  The defendants are in custody pending trial.  Federal arrest warrants are pending for Chacon and Mejia.

 

SALT LAKE CITY – A federal indictment unsealed Thursday charges Robert Glen Mouritsen, age 71, of Kaysville, with using a position of prominence to induce friends and fellow church members to give him money to further a financial fraud scheme he called “The Project.”  The fraud scheme started in 2006 and continued through Aug. 29, 2018, the indictment alleges.

According to the indictment, Mouritsen represented to victims that The Project involved a series of complicated international transactions that would replace fiat money (legal tender by government decree) with an asset-backed currency system – for example, the U.S. dollar tied to the value of a commodity like gold. Mouritsen represented to victims that The Project involved governments in Asia and Europe and required the help of attorneys and bankers.  He also told them it was expensive to keep The Project moving forward.  The indictment also alleges Mourtisen told investors The Project was subject to extremely strict confidentiality agreements and he could not disclose many details. 

The indictment charges Mouritsen with three counts of wire fraud and three counts of money laundering. The indictment outlines representations made to three victims of the alleged fraud scheme.

The indictment alleges he told an individual identified as Victim #1 that the investment would be short term and would yield significant investment returns. When Mouritsen failed to return the initial investment in a short amount of time, he attempted to lull Victim #1 into a false sense of security about the investment by representing that The Project was almost done, but he needed additional money to continue.  Over the years, Victim #1 provided a total of $326,399.51 to Mourtisen for The Project with the most recent investment occurring in and around 2016.   

The indictment alleges that in or around 2017, Mouritsen asked Victim #2 to provide money for The Project.  He told the victim that The Project was nearing completion. He told the victim that compensation was being held up by the Patriot Act because the money was overseas.  He represented that the money would arrive “any day now,” according to the indictment.  Mouritsen also asked Victim #2 for more money to keep the attorneys working on getting his money into the United States. Over the years, Victim #2 provided a total of $165,000 to Mourtisen for the project.

According to the indictment, Mouritsen asked Victim #3 to invest in The Project in late July 2008. He provided the victim with a promissory note with a 12 percent annual return due in one year.  When Mourtisen failed to repay Victim #3 within one year, he told the victim he needed more money to pay attorneys to complete The Project.  He told the victim that attorneys were working to bring money into the United States, but they were having difficulty due to issues with Homeland Security.  For years, according to the indictment, Mouritsen represented that money would be coming soon.  Over the years, Victim #3 provided $33,000 to Mourtisen for The Project, with the most recent investment occurring on or about Sept. 19, 2013.

The indictment alleges Mourtisen failed to tell investors, among other things, that The Project had failed to produce any returns in over a decade and that he used a significant portion of investor money for his own personal use and benefit.  

The indictment seeks a forfeiture judgement of approximately $1.5 million representing the proceeds traceable to the scheme to defraud.

A federal arrest warrant was issued for Mouritsen based on the charges in the indictment.  He had an initial appearance Thursday.  He entered a plea of not guilty to the charges.  A one-week jury trial was set for Nov. 4, 2018, before U.S. District Judge Tena Campbell. Mouritsen was released from custody on conditions of pretrial release. The potential maximum penalty for each count of wire fraud is 20 years in federal prison. Money laundering has a potential penalty of 10 years per count.

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

Special agents of the FBI and the IRS-Criminal Investigation Division are investigating the case.  Attorneys in the U.S. Attorney’s Office in Salt Lake City are prosecuting the case.
     

SALT LAKE CITY – In June, law enforcement officials in Utah announced the formation of the Crime Gun Intelligence Center (GCIC) in Utah that brings together cutting-edge technologies and local, state, and federal law enforcement resources to give law enforcement officers real-time data and investigative leads to aid in solving and preventing violent crimes involving firearms.

Utilizing tools like the ATF National Tracing Center and ATF’s National Integrated Ballistic Information Network (NIBIN), law enforcement officers, prosecutors, and forensics experts are focusing on the “trigger pullers” in Utah and other violent criminals. The goal of the CGIC is to connect the dots and provide actionable investigative leads in a real-time manner that will result in the arrest of suspects before they can commit additional shootings or other violence crimes.

How is the new initiative working?

A recently unsealed federal case, which started with an individual firing multiple shots from his vehicle at a residence in South Salt Lake City, offers a graphic example of the important role the NIBIN network and the CGIC are playing in piecing together a trail of violent crime that touched at least two Utah neighborhoods.

A criminal complaint filed Aug.15, 2018, charges Rory Curtis Cordova, aka “Joker,” age 50, of Ogden, with two counts of possessing a firearm following a felony conviction.  The complaint alleges that close to midnight on June 30, 2018, South Salt Lake City police officers responded to reports of gunfire at a residence.  Officers learned that an unidentified individual had fired multiple shots at the residence from a vehicle.  Eight bullets struck the residence.  Two individuals were inside the home at the time.

Evidence was gathered from a home surveillance camera.  Based on the video information and additional information provided by a resident of the home, law enforcement officers were able to identify Rory Cordova as a suspect in the case. An attempt to locate Cordova was issued to police agencies. At approximately, 3:15 a.m., the complaint says, law enforcement officers from multiple agencies located Cordova’s vehicle in Ogden and took him into custody.

During the course of the investigation, officers recovered several shell casings from inside Cordova’s vehicle where they also located a stolen Glock 26 9mm handgun.  During their investigation, officers also obtained surveillance of Cordova purchasing two boxes of 9 mm ammunition at a Walmart prior to the shooting.

The spent shell casings from the South Salt Lake shooting and shell casings from Cordova’s car – as well as the stolen 9mm handgun – were sent to the CGIC for entry into the ATF NIBIN network.

Firearms leave unique markings on ammunition and casings as it is discharged from the firearm. NIBIN stores images of those markings, which identify the signature of the firearm.  These images are analyzed and compared against other NIBIN entries for matches or “hits.”  A “hit” indicates that the markings are the same on the ammunition or casings and would have been fired from the same firearm.

Since purchasing the NIBIN machine in August 24, 2017, DPS has entered more than 1,200 shell casings, resulting in 56 groups of hits totaling 75 case associations. Fifteen of the 56 group hits involve three or more shootings linked to serial shooters.

According to the complaint, the NIBIN analysis revealed that the markings on the spent shell casings recovered from the scene of the South Salt Lake shooting matched the spent shell casings recovered from Cordova’s car.

The NIBIN analysis also linked the Glock handgun recovered from Cordova’s vehicle to spent shell casings recovered from the scene of a shots fired call in Ogden on June 8, 2018.

According to the complaint, the Ogden incident involved a man pulling up in front of a residence where a child’s birthday party was taking place. As shots were fired at the residence from the vehicle, witnesses described grabbing children and running from the residence. Officers located several bullet holes and marks on the exterior of the residence, the front window of the residence, and the windshield of a vehicle parked in the driveway at the residence. Witness statements describing the shooter and the vehicle he was driving were consistent with Cordova’s driver’s license photo and matched a vehicle registered to Cordova.

Cordova is a documented Ogden Trece gang member and has numerous felony convictions, leading to his restricted status under federal law firearms laws, according to the complaint. The potential maximum penalty for each of the two counts in the complaint is 10 years in federal prison.

Other examples:

US v Llewelyn: On January 20, 2018, Justin Gary Llewelyn, age 34, of Herriman, Utah, opened fire on a Unified Police officer when the officer made contact with Llewelyn near an apartment complex in Herriman. After firing at the officer, who was not physically injured, Llewelyn fled and broke into a unit at the apartment complex where he shot the apartment resident and stole his vehicle.            

On January 24, 2018, officers located Llewelyn driving a stolen vehicle in Provo.  Llewelyn fled from officers, who pursued him through Provo, Springville, and Spanish Fork.   

Ultimately, Llewelyn was taken into custody when a Utah County Sheriff’s Deputy successfully disabled the stolen vehicle he was driving.  Within the stolen vehicle, officers located a .45 ACP caliber pistol and were able to make NIBIN comparisons between the spent shell casings recovered from the Herriman crime scene and a test fired round from the .45 ACP pistol recovered from the vehicle driven by Llewelyn.  The NIBIN analysis confirmed that the .45 ACP spent shell casings at the Herriman crime scene matched the .45 ACP test fired spent shell casing.

Llewelyn is charged in two separate federal indictments with possession of a firearm following a felony conviction. 

He faces up to 10 years in prison for each count of felon in possession of a firearm.  He has pleaded not guilty to the charges and is scheduled for trial in the cases in September. 

US v Cruz:  Lee Donald Cruz, age 39, of Ogden, is charged with possession of a firearm and ammunition in a federal indictment returned in July.  The firearm was located in the tank of a toilet during a search of a home in connection with a law enforcement investigation. NIBIN analysis of a test-fired round from the gun produced a “hit” on the gun for a shooting involving a rival gang member a week earlier.

Cruz has pleaded not guilty to the charges and is scheduled for a two-day trial starting Oct. 9, 2018, before U.S. District Judge Robert J. Shelby.  He faces separate charges for aggravated burglary and aggravated kidnapping in state court.

Complaints and indictments are not findings of guilt.  Individuals charged in these documents are presumed innocent unless or until proven guilty in court.