District of Utah

SALT LAKE CITY – Harvey Douglas Goff, age 55, of Ogden, who pleaded guilty in federal court in December to obstruction of justice in connection with an effort to impede a proceeding in the United States Tax Court, will served 36 months in federal prison. 

U.S. District Judge David Nuffer imposed the sentence during a hearing Monday afternoon in U.S. District Court.  Goff also will serve 36 months of supervised release when he finishes his federal prison sentence and cannot have contact with sovereign citizen-related groups during his supervised release period.  Goff has been in custody but was released Monday and will be allowed to self-surrender to the U.S. Bureau of Prisons to begin serving his sentence by May 30, 2013.

Goff, as a part of a plea agreement reached with federal prosecutors, admitted that between April and July of 2010 he endeavored to obstruct and influence the administration of justice in U.S. Tax Court. He admitted that he repeatedly filed false and fictitious forms in a national database.  Those forms asserted that the judge had provided him with tens of millions of dollars in cash in “suspicious” transactions.  He also admitted that he sent the judge copies of the forms he filed and that these efforts constituted obstruction of justice.

Goff was charged in a 14-count indictment returned by a federal grand jury in May 2011.  Charges in the indictment included obstruction of justice, impeding internal revenue laws, fictitious obligations, attempt to commit mail fraud, and mailings in furtherance of a scheme and artifice to defraud.  Ten counts of the indictment related to conduct that started with traffic stops in Ogden and continued through subsequent court proceedings in Weber County.  Goff claimed diplomatic immunity during one of the traffic stops and challenged the jurisdiction of a state court judge, among other things. 

Goff also filed a lien against various employees and entities of the State of Utah, Weber County, Ogden City, and the Ogden Police Department, falsely asserting that the employees and entities each owed Goff more than $53 trillion.  The lien was filed on 77 parcels located within Weber County, including municipal property and private residences associated with the employees and entities.

Although the U.S. Attorney’s Office dismissed 13 counts of the indictment at Monday’s sentencing hearing, Goff’s 36-month sentence included consideration of that relevant conduct.

The case was prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of IRS Criminal Investigation and the FBI.           

In another case involving false liens against government officials, Randy Merrill Huffaker, age 60, of Taylorsville, who pleaded guilty in December to one count of impeding the IRS and two counts of filing false liens or encumbrances against government officials, was sentenced to time served (about three days) in late March. 

U. S. District Judge Clark Waddoups, who imposed the sentence, also ordered him to serve 12 months of supervised release when he concludes his prison sentence.  Huffaker also must pay $33,996 in restitution.

Huffaker admitted that in July, August, and September of 2011, he filed or attempted to file false and fictitious liens or encumbrances against the Commissioner of the Internal Revenue Service and the Comptroller of the Currency, both of whom are government officials protected by federal law.  He admitted that he filed the documents against the two individuals because of their performance of their official duties.

He admitted he repeatedly mailed extensive documents to the personal residence of the Commissioner regarding his tax debts, demanding action, and falsely claiming that the Commissioner was personally indebted to him.  He admitted in court documents that he knew the liens and encumbrances were false and fictitious.

Charges against Tari A. Huffaker, age 56, of Taylorsville, who was also charged in the case, were dismissed by federal prosecutors in December. 

The case was prosecuted by the U.S. Attorney’s Office and investigated by special agents of IRS Criminal Investigation and the Treasury Inspector General for Tax Administration.

SALT LAKE CITY – An initial appearance in federal court has been scheduled for April 26, 2913, for a Fruit Heights, Utah, man charged with filing a false tax return, attempted tax evasion, and evasion of payment in an indictment returned by a grand jury in Salt Lake City.

Jon T. McBride, age 51, of Fruit Heights, charged in a five-count indictment, will appear for arraignment at 10:15 a.m. before U.S. Magistrate Judge Paul M. Warner.  The indictment, returned last week, alleges one count of filing a false tax return, three counts of attempted tax evasion, and one count of evasion of payment.  The alleged activity occurred from 2005 through 2010. 

The first count of the indictment alleges McBride filed a false tax return for the 2005 tax year by failing to disclose approximately $109,785 in gross income he received from his partnership in The Clip Company, a Nevada company that sold cell phone belt clips.  The company also was registered to do business in Utah.

The three attempted tax evasion counts relate to affirmative acts of evasion the indictment alleges McBride took to avoid paying taxes to the federal government, including the use of several nominee entities and bank accounts to hide substantial income he received and the proceeds from the sale of property he controlled. As a part of the alleged scheme, McBride instructed companies to report his earned income as having been earned by several nominee entities he controlled.  He then filed false tax returns for those nominee entities failing to report the income they allegedly earned. The indictment alleges he used money in the nominee bank accounts for personal purposes.

The final count of the indictment alleges that beginning in 2006 through about April 15, 2010, McBride attempted to evade the payment of approximately $839,328 in back taxes for the tax years 1999 to 2002.  The indictment alleges he committed affirmative acts of evasion, including creating nominee entities to replace him as a partner in companies; opening bank accounts in nominee names; depositing money in nominee bank accounts; transferring real property to a nominee entity; filing false tax returns and forms with the IRS; and failing to file  tax returns.

The potential penalty for a conviction of the charges in the indictment is up to five years in federal prison.

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

The case is being prosecuted by the U.S. Attorney’s Office in Utah and investigated by special agents of IRS Criminal Investigation.

SALT LAKE CITY --  A federal grand jury returned an indictment Wednesday morning charging four individuals, including two residents of West Valley City, Utah, with smuggling Peruvian artifacts into the United States and interstate transportation of the stolen property.

Charged in the indictment are Cesar Guarderas, age 70, and Rosa Isabel Guarderas, age 45, both of West Valley City and Javier Abanto-Sarmiento, age 39, and Alfredo Abanto-Sarmiento, age 36, both of Trujillo, Peru.  Both West Valley City residents are naturalized U.S. citizens. 

According to a complaint filed in the case, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) special agents initiated an investigation of Javier Abanto-Sarmiento and Cesar Guarderas in October 2012.  Abanto-Sarmiento is the brother of Isabel Guarderas. Using an undercover agent, two Peruvian artifacts were purchased from Cesar Guarderas in November.  Guarderas was given $3,000 at that time as a down payment for the two artifacts.  The complaint alleges Guarderas represented the artifacts to be authentic, not replicas.  Ten additional artifacts were purchased from Guarderas for $20,000 in November.  The artifacts were examined by Utah Valley University and Tulane University professors, who are experts in the region and cultural time period.  They were also tested at a laboratory in Washington.   The artifacts were determined to be authentic.

According to the complaint, undercover telephone, e-mail and in-person discussions during the investigation corroborate the artifacts trafficking conspiracy between Javier Abanto-Sarmiento and Cesar Guarderas. Cesar Guarderas said Javier Abanto-Sarmiento had access to more than 100 pieces of pottery in Peru and was willing to ship them to the United States. Abanto-Sarmiento stated that he bribes officials in Peru to get the artifacts out of the country.  Guarderas said Abanto-Sarmiento knows where to look for pottery buried in the ground and that he acquired some of his pottery using this method.  Guarderas also said that Abanto-Sarmiento had a contact with the National Institute of Culture in Peru who provides him with authentic certifications stating that the pottery are replicas and Guarderas said that Abanto-Sarmiento uses the certifications to illegally export genuine artwork from Peru. 

In December, HSI special agents in Salt Lake City detained a parcel originating from Peru and destined for the Guarderas residence in West Valley City.  Special agents, who had a warrant to inspect the package, discovered eight artifacts inside the box.  Special agents went to the Guarderas home a few days later and, according to the complaint, Guarderas, turned over eight additional artifacts from his garage. HSI special agents also have received an additional nine artifacts that were purchased by the undercover agent from Abanto-Sarmiento and shipped from Peru.

Abanto-Sarmiento was arrested by HSI special agents in Miami on March 4, 2013, as he flew into the United States from Peru. He is in custody and is being transferred to Salt Lake City by U.S. Marshals.

Cesar and Isabel Guarderas were arrested March 25, 2013, on a complaint.  Federal prosecutors did not seek detention and the two were released.  They are scheduled for arraignment Friday at 10:45 p.m. before U.S. Magistrate Judge Brooke C. Wells.

Alfredo Abanto-Sarmiento, who is in Peru, has not been arrested.

The potential maximum penalty for smuggling goods into the United States is up to 20 years in prison.  Interstate transportation of stolen property carries a potential 10-year sentence.  Each count has a potential fine of $250,000.

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

The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by HSI special agents.

In 1997, the United States and Peru, pursuant to the UNESCO Convention and the enactment of the U.S. Cultural Property Implementation Act, entered into a bi-lateral agreement prohibiting the importation into the United States of specific cultural property originating from Peru, including artifacts and ethnological religious objects.

HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. Specially trained HSI special agents, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. Since 2007, HSI has repatriated more than 6,600 items representing the cultural heritage of more than 24 countries.

SALT LAKE CITY – Darin W. Bare, age 47, of Eagle Mountain, Utah, pleaded guilty to mail fraud and filing a false tax return in federal court this week, admitting that he embezzled $800,854.63 from Clayton Homes, a company headquartered in Tennessee that specializes in building pre-manufactured and modular homes.

According to a Felony Information filed in the case, Bare managed the Salt Lake City sales office of a subsidiary of Clayton Homes and was responsible for hiring contractors and subcontractors to improve property lots for landscaping and home construction.  The charging document alleged Bare devised and executed a scheme to obtain payment from Clayton Homes through the use of false invoices. 

As a part of a plea agreement reached with federal prosecutors, Bare admitted that he conspired with a contractor, identified in court documents as D.J.H., to create and submit false invoices to Clayton Homes showing that work had been done on property lots sold by his office when, in fact, the work had not been done.  D.J.H., a resident of Utah County, was the owner and operator of a general construction company known as H.B.

Bare admitted that he instructed D.J.H. on how much to charge Clayton Homes on the false invoices.  Bare then entered the invoices into the Clayton Homes computer system. Relying on Bare’s representations on the invoices, Clayton Homes processed the false invoices, issued checks to D.J.H.’s business, and mailed the checks to Bare. Bare admitted he would then deliver the payments to D.J.H., who would provide him with a kickback.  Bare said he deposited the checks into a checking account in another person’s name to avoid detection. Over time, Bare embezzled $800,854.63 through the fraud.

Bare also admitted that he did not report any of the money he embezzled from Clayton Homes on any of his tax returns.  According to the plea agreement, Bare signed and filed a tax return for 2009 that failed to report an additional $482,639 in income for the tax year.

Bare, who waived indictment and entered his guilty pleas Wednesday, is scheduled to be sentenced May 30, 2013, at 2:30 p.m. in U.S. District Judge Clark Waddoups’ courtroom.  He faces up to 20 years in prison for the mail fraud conviction and up to 3 years in prison for the tax conviction.  He also agreed to pay restitution as a part of his plea agreement.  The amount of restitution and the schedule of payments will be determined as a part of the sentencing proceeding.

The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of IRS Criminal Investigation and the FBI.

SALT LAKE CITY – A federal grand jury returned a six-count indictment Wednesday afternoon charging Christopher C. Harris, age 46, of St. George, Utah, with wire fraud, money laundering, and failure to file a federal tax return in connection with a scheme to defraud individuals and companies who were trying to purchase large quantities of cement.

According to the indictment, Harris owned a commodities distribution business under the name of Revolution Holdings, Inc., in St. George. Harris purported to supply commodities of all kinds throughout the world by obtaining and arranging for shipping of the commodities.  Harris conducted business by, among other things, entering into contracts with customers who wired money into his personal accounts.

The indictment alleges that from about July 2008 to about July 2009, Harris devised a scheme to defraud individuals and companies identified in the indictment as D.D. (DJD International Solutions, LLC) and M.O. (American Quality Importers, LLC).

The indictment alleges Harris told the victims he had purchased and delivered large shipments of cement to prior customers and that he owned a large quantity of cement when, in fact, he did not. Harris also sent victims fraudulent documents purporting to be from third parties indicating that he and Revolution Holdings had fulfilled large-scale contracts in the past and that he had arranged for shipping vessels to transport cement overseas.

The indictment alleges that Harris defrauded victims of about $725,000 through his scheme.

The first three counts of the indictment allege wire fraud in the execution of the scheme by falsely obtaining the money and property of victims through the use of materially false representations and the omission of material facts.  Two money laundering counts allege Harris used money he obtained through the scheme to make a $350,000 down payment on a personal residence and to purchase a $121,758 boat.  The final count of the indictment alleges Harris did not file a federal tax return for 2008.

The potential maximum penalty for each count of wire fraud is 20 years in prison.  The money laundering counts each carry potential 10-year sentences.  The potential penalty for the tax charge is up to one year in prison. The indictment also includes a notice that federal prosecutors are seeking a forfeiture judgment of $725,000.

A summons will be issued to Harris to appear for an arraignment on the charges.

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

The case is being prosecuted by the U.S. Attorney’s Office in Utah and investigated by special agents of the U.S. Secret Service and the IRS Criminal Investigation Division.  

SALT LAKE CITY – A jury convicted Tevita Tolutau, age 23, of Salt Lake City, of robbery and brandishing a firearm during a crime of violence Thursday afternoon following a four-day trial in U.S. District Court in Salt Lake City.  Tolutau was charged in connection with a Sept. 25, 2008, robbery of a Riverton Walmart store.

According to documents filed in court, just after midnight on Sept. 25, 2008, two employees were gathering money from cash registers at the store to take to the office for nightly accounting.  The two employees were confronted just outside the office by two men wearing hoodies. One of the men demanded the women give them their cell phones and a radio communication device.  The store employees complied with the demand.

The two employees entered the outer office with the two assailants following directly behind.  The assailants then began ordering the employees to open the door to the inner cash office.  Not having a key to the inner office, one of the employees knocked on the door.  Inside the office, another Walmart employee could see the robbery in progress through a surveillance camera and refused to open the door. The assailants eventually fled the store.

Eric Kamahele and Mataika Tuai, two members of the Tongan Crip Gang, were previously convicted of this offense and other violent crimes in furtherance of a RICO conspiracy during a fall 2011 trial in federal court. Kamahele is serving 384 months in federal prison and Tuai is serving an 84-month sentence.

Evidence at this week’s trial proved that Tolutau was the getaway driver for Kamahele and Tuai. He also provided the firearm used in the robbery and disposed of the firearm after the robbery.

The potential maximum penalty for the robbery conviction is 20 years.  Brandishing a firearm during the commission of a violent crime carries a statutory maximum penalty of life in prison with a mandatory minimum sentence of seven years.  The penalty for the firearm conviction must be imposed consecutively to whatever sentence is imposed for the robbery.  Sentencing in the case is set for May 16, 2013, at 3:30 p.m. in U.S. District Judge Clark Waddoups’ courtroom.

The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of the FBI, members of the FBI’s Safe Streets Task Force, and the Unified Police Department.

SALT LAKE CITY – A jury convicted Jeffrey Charles Zander, age 57, a former tribal planner, general counsel and economic development and trust resources director for the Paiute Indian Tribe of Utah, of mail and wire fraud, money laundering, and willful failure to file tax returns Tuesday afternoon following a week-long trial in U.S. District Court in Salt Lake City.

Zander was charged with two counts of mail fraud, two counts of wire fraud, one count of money laundering, and three counts of willful failure to file a tax return in a superseding indictment returned in February 2012.

“Prosecuting white collar crime cases is a high priority for our office. This case is particularly egregious because it involves a person in a position of trust with the Paiute Tribe, who diverted funds intended to help the Tribe for his own personal use,” U.S. Attorney David B. Barlow said today.

Zander began working for the Paiute Tribe around October 1998 as its tribal planner. About two years later, he became the Tribe’s economic development director and trust resources director. Around September 2007, Zander convinced the Tribe to hire as general counsel when, in truth, he did not possess a license to practice law. 

Evidence presented at trial showed that beginning in 2005, Zander developed a scheme to divert more than $175,000 for his personal use that had been awarded to the Paiute Tribe through grant proposals the defendant had authored and assisted the tribe in applying for. The grants were awarded for Integrated Resource Management Plans (IRMP), which are long-term plans to balance the use of tribal resources between interests of residents of the reservation and revenue-generating uses of tribal lands. Zander told tribal leaders that he had hired companies in Salt Lake City, Las Vegas, and Provo to act as consultants or facilitators to assist with the creation of the IRMPs. Zander told the tribe that since he would be traveling to work with the consultants or facilitators, he could hand-deliver progress payment checks to the companies.

Evidence at trial showed the companies were bogus – created by the defendant to facilitate the fraud. Zander created fictitious invoices from the companies, submit them for payment from the Tribe, and then drove to different points between Provo, Utah, and Mesquite, Nevada to deposit the checks into his personal bank accounts. He also drafted quarterly reports for the Bureau of Indian Affairs to show that the money was being spent for facilitators and consultants when, in truth, he had converted grant funds for his own use.

The scheme came to light when a transaction raised a red flag with a bank teller and, at about the same time, tribal leaders started to uncover the defendant’s deceit and misrepresentations. Evidence showed that invoices from all four companies were found on his work computer. Zander was fired from his tribal position and the case was turned over to the FBI.

“This defendant devised a scheme that caused the Paiute Nation to suffer substantial financial losses over a period of many years. I appreciate the IRS Criminal Investigation Division, the FBI special agents, and the United States Attorney’s Office for their dedicated work on this case. I believe this investigation highlights law enforcement’s ongoing commitment to investigating and prosecuting criminal activity on Native American lands in Utah,” Mary F. Rook, Special Agent in Charge of the FBI in Salt Lake City said today.

“This serves as a strong message to those in positions of trust who put greed over duty.
All income is reportable including amounts you unlawfully obtain from others. Don't think using bogus entities and shell companies is going to conceal your activities from an agency with over 93 years of refining the art of following the money. Such acts will only serve to incriminate you more,” Paul Camacho, Special Agent in Charge of IRS Criminal Investigation, said.

As a part of the criminal case, federal prosecutors are seeking a money judgment of $176,698 representing the approximate value of the proceeds obtained by Zander as a part of the scheme.

Sentencing in the case is set for July 31, 2013, at 2 p.m. before U.S. District Judge David Nuffer. The potential maximum penalty each count of mail and wire fraud is 20 years. The money laundering count has a potential 10 years penalty and each count of failure to file a tax return has a potential one-year penalty.

The case was prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of the FBI and the IRS Criminal Investigation Division.

SALT LAKE CITY – A man who led law enforcement officers on a high-speed chase through Sandy, Murray and West Valley City in August pleaded guilty Friday afternoon in federal court to bank fraud and brandishing a firearm during a crime of violence. The plea agreement includes a stipulated sentence of 12 years followed by 60 months of supervised release. 

Joseph Lee Chatwin, age 41, of Salt Lake City, and a co-defendant, Shauntae Leah Stratton, age 24, of Salt Lake City, were charged with access device fraud; aggravated identity theft; bank fraud; possession of stolen mail; and possession of unauthorized access devices.  In addition to those charges, Chatwin also was charged with possession of a controlled substance; assaulting, resisting, and impeding officers; using a firearm during a crime of violence; and possession of a firearm by a restricted person in the 11-count indictment returned in October.   

Chatwin and Stratton were initially apprehended on July 17, 2012, by Farmington police officers inside a stolen motor home at the Lagoon campground.  Both defendants attempted to flee from police. Stratton was recaptured a short time later.  Chatwin was arrested later in a shed.  However, he later kicked out the window of a police car and escaped.  The U.S. Marshals’ Joint Criminal Apprehension Team developed information in early August that Chatwin was at a home in Sandy.  Officers tried to arrest him as he left the residence but he evaded arrest and led officers on the high speed pursuit.  Officers were successful in spiking the tires of the car he was driving. Chatwin was subsequently arrested after brandishing a firearm at the Marshals.

As a part of the plea agreement, Chatwin admitted that he and Stratton stole a purse early in May from a victim identified as O.P. in the court document. They later saw a motor home for sale by owner and used a cell phone from O.P.’s stolen purse to negotiate the purchase price of the motor home.  They later met in person with the owner of the motor home and finalized a purchase price of $30,000. Using O.P.’s personal information from the stolen purse, Chatwin says his co-defendant, with his knowledge and approval, opened a bank account in O.P.’s name at U.S. Bank using funds from a stolen check from two other victims. Chatwin said the co-defendant also obtained a cashier’s check at U.S. Bank payable to the owner of the motor home for $30.00.  Chatwin admitted they altered this check to be payable in the amount of $30,000 and used the fraudulent check to pay for the motor home.

As Chatwin was attempting to leave a home in Sandy in early August, officers attempted to arrest him.  He admitted he evaded them and almost struck a law enforcement vehicle as he was driving in a church parking lot.  He admitted he then led police on a lengthy high-speed chase through Sandy, Murray and West Valley City areas until officers spiked the tires of the car he was driving.  Chatwin admitted that he exited the car and was approached by Deputy U.S. Marshals who instructed him to stop. He brandished a 9 mm Ruger handgun, which was observed by the Marshals.  He was arrested by the Marshals.

The final amount of victim restitution in the case will be determined at sentencing.  However, Chatwin has agreed that the amount of restitution ordered in the case will include all relevant conduct.

Sentencing for Chatwin has been set for June 3.  A change of plea hearing has been scheduled for Stratton on March 5 at 10:30 a.m. in Judge Robert J. Shelby’s courtroom.   

The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City.  Several agencies have participated in the investigation including the West Jordan Police Department, the U.S. Postal Inspection Service, the U.S. Marshals Service, the Unified Police Department, and West Valley City and Farmington Police Departments, among others.

SALT LAKE CITY – John S. Dudley, age 58, of Sandy, pleaded guilty to wire fraud in U. S. District Court in Salt Lake City this week and agreed to pay restitution of approximately $6,868,000 to victims of a fraudulent investment scheme. The final restitution amount will be determined by the court.

The plea agreement includes a recommendation to the court that a 60-month sentence be imposed in the case. Sentencing in the case is set for July 25, 2013, in U.S. District Judge Robert J. Shelby’s courtroom.  Federal prosecutors will also recommend that Dudley be turned over to Immigration and Customs Enforcement for removal proceedings following the completion of his sentence – a process Dudley agreed not to contest as a part of his plea agreement.  Dudley is a citizen of Great Britain.  

Dudley was charged in a 17-count indictment returned in May 2011 in connection with what the indictment alleged was a scheme to induce individuals to invest money with him for use in various investment programs.

The indictment alleged Dudley made a variety of representations to potential investors, including telling them they could expect monthly returns of 5-10 percent; that he had not suffered a trading loss since 1978; that investors’ funds would be used exclusively for investment purposes; that he had personally done very well in his investments and had never made less than 5 percent per month over the last 30 years; that investors’ money was backed by a “senior life settlement policy” that reduced or eliminated investors’ risk of loss; and that investing with him was an exclusive opportunity with only a limited number of investors allowed to invest with him at one time.
           
As a part of the plea agreement reached with federal prosecutors, Dudley admitted he sent an e-mail to an individual, identified as U.A. in the plea agreement, with the subject line “Re: Castle Creek Bank Details.” He admitted that the e-mail was a part of his attempt to execute the fraud scheme by obtaining money under false representations. Investor U.A. is identified in the indictment as a Utah Department of Commerce’s Division of Securities investigator acting in an undercover capacity in the indictment.  

The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents and investigators of the FBI, IRS Criminal Investigation Division, and the Utah Department of Commerce.       

SALT LAKE CITY – A Florida couple who owned a military contracting company pleaded guilty Wednesday in federal court in Salt Lake City for their roles in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.

Sylvester Zugrav, 70, of Sarasota, Fla., pleaded guilty to conspiracy to commit bribery and procurement fraud.  His wife, Maria Zugrav, 67, also of Sarasota, pleaded guilty to misprision of a felony related to her efforts to conceal the conspiracy.  The Zugravs were charged in an indictment, returned on Oct. 12, 2011, along with Jose Mendez, 51, of Farr West, Utah,a procurement program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO) at Hill Air Force Base, in Ogden, Utah. 

Mendez was charged in the indictment with conspiracy, bribery and procurement fraud, and has since pleaded guilty to all charges and agreed to forfeit more than $180,000 he received as part of the bribery scheme and awaits sentencing.

According to court documents, the Zugravs owned Atlas International Trading Company, a business that contracted to provide foreign military materials to the U.S. government through FMASO. 

In his plea agreement, Sylvester Zugrav admitted that, from 2008 through August 2011, he gave Mendez more than $180,000 in bribe payments, and offered Mendez more than $1.05 million in additional bribe payments contingent upon Atlas’s receipt of future contracts with FMASO.  In exchange for Sylvester Zugrav’s bribe payments and offers, Mendez ensured that Atlas and Sylvester Zugrav received favorable treatment in connection with procurement contracts, including, among other things, assisting Atlas in obtaining and maintaining procurement contracts; assisting Atlas in receiving payments on such contracts; and providing Atlas with contract bid or proposal information or source selection information before the award of procurement contracts.

In her plea agreement, Maria Zugrav admitted that she was aware of Sylvester Zugrav’s bribe payments to Mendez and assisted with concealment of the crime.  According to court records, Sylvester Zugrav provided bribe payments to Mendez in three ways: cash payments via Federal Express to Mendez’s residential address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin.  Between November 2009 and August 2011, Sylvester Zugrav sent nine FedEx packages to Mendez’s home address.  Each package contained $5,000 in cash, except the last package, containing $3,000, which was seized by law enforcement.  Maria Zugrav assisted her husband and Mendez’s bribe scheme by limiting cash withdrawals from Atlas’ bank account to not more than $5,000 to avoid scrutiny by banking officials and law enforcement.
           
According to the plea documents, on multiple occasions when Sylvester Zugrav and Mendez traveled to the same location, Sylvester Zugrav would give Mendez cash payments and other things of value.  From 2008 through August 2011, Sylvester Zugrav gave Mendez seven in-person cash payments ranging from $500 to $10,000, and purchased a laptop computer and software package worth over $2,900. 

As Mendez admitted, during the course of the corrupt scheme, Mendez opened a foreign bank account so that Sylvester Zugrav could pay Mendez larger bribe payments.  Mendez asked his cousin in Mexico to open an account there.  After the account was opened by Mendez's cousin, Maria Zugrav made wire transfers to the bank account located in Mexico in the name of Mendez's cousin to avoid detection of the larger bribe payments by law enforcement.  From 2008 through August 2011, Maria Zugrav sent 10 wire transfers to the Mexico account ranging from $350 to $26,700.

Court records also describe additional steps taken to conceal the bribery scheme, including creating and using covert e-mail accounts, using encrypted documents, adopting false names and using code words.  For instance, to avoid detection of their e-mail communications, Sylvester Zugrav and Mendez established e-mail accounts to be used only to communicate requests and offers for bribe payments.  Sylvester Zugrav and Mendez also created password-protected documents for e-mail communications, and used code words and false names. Within the encrypted documents, Mendez adopted the moniker “Chuco” and Sylvester Zugrav used the codename “Jugo.”  They referred to cash as “literature.”

Sylvester Zugrav faces a maximum potential penalty of five years in prison and a $250,000 fine on the conspiracy count, and Maria Zugrav faces a maximum penalty of three years in prison and a $250,000 fine on the misprision count.  Sentencing for the Zugravs is scheduled for June 19, 2013.

The case was investigated by the FBI and the Air Force Office of Special Investigations.  The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah and Trial Attorney Deborah Curtis of the National Security Division’s Counterespionage Section.

SALT LAKE CITY –  Monica Paris, age 30, of South Jordan, pleaded guilty to one count of money laundering in federal court Monday, admitting she embezzled approximately $462,455.80 from Ultradent Products, Inc., her former employer.  She used the funds she embezzled from her employer to pay for personal expenses, including car payments, airline tickets, vacations, personal items, food, and entertainment, according to a Felony Information filed by federal prosecutors in January.
 
According to the Felony Information, Paris worked at Ultradent, a privately-owned Utah corporation involved in the production and distribution of dental products, from 1997 until her termination around February 2012.  Her last position at the company was assistant to the director of major accounts.

According to court documents, as a part of her job duties, Paris was responsible for purchasing promotional materials used by Ultradent.  The standard practice at the company involved Paris purchasing the items using her personal credit card and then seeking reimbursement for charges she had incurred on the company’s behalf.

As a part of her guilty plea Monday, Paris admitted that beginning around August 2010 and continuing through February 2012, she fraudulently submitted expense reports for personal reimbursement payments for items she never actually purchased. She then fraudulently approved the expense reports on behalf of Ultradent and directed that the reimbursement payments be sent to her personal bank account.   She also admitted that she fraudulently claimed that personal items she purchased at Sam’s Club, including large amounts of pre-paid credit cards, were company expenses for which she sought reimbursement payments.  Using her Sam’s Club membership, she admitted she bought personal items using the credit cards of two other company employees. She then submitted the purchases for reimbursement and created false invoices to show that the purchases were for company expenses.

Paris admitted that in August 2011, she sent a check for $10,891.29 to her credit union as payment for a car loan. She admitted she knew that the funds she transferred were stolen from her employer.

Sentencing in the case is set for June 27, 2013, at 2:30 p.m. before U.S. District Judge Ted Stewart.  The potential maximum sentence for a money laundering conviction is 10 years in federal prison and a fine of up to $250,000.
 
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by IRS Criminal Investigation Division special agents.

SALT LAKE CITY – A federal grand jury returned an indictment Wednesday morning charging Mark Allen Call, age 37, of Layton, with two counts of bank robbery.  The indictment alleges Call robbed Zions Bank located at 1420 South 300 West in Salt Lake City twice – once on Feb. 13, 2013, and a second time on Feb. 14, 2013.

Call is scheduled to be arraigned on the charges Thursday at 3 p.m. before U.S. Magistrate Judge Evelyn Furse. The potential maximum penalty for each count of bank robbery is 20 years in prison and a fine of $250,000.

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

The case is being investigated by the FBI and the Salt Lake City Police Department.     

SALT LAKE CITY – A federal grand jury returned an indictment Wednesday afternoon charging Pete Mafua, age 19, of West Valley City with two counts of bank robbery and one credit union robbery in connection with robberies in Magna, West Valley City, and Taylorsville earlier this month.

The indictment charges Mafua with a Feb. 1, 2013, robbery of Zions Bank at 8375 West 3500 South in Magna; a Feb. 2, 2013, robbery of America First Credit Union at 4976 West 3500 South in West Valley City; and a second Feb. 2 robbery at U.S. Bank located at 4135 South Redwood Road in Taylorsville.

According to a complaint filed in connection with the Zions Bank robbery, a male entered the bank wearing a black hat, black shirt, and a blue coat.  The suspect’s face was uncovered.  He approached the teller counter and presented a note to the teller which demanded cash and stated that he had a firearm.  The suspect left the bank after receiving cash from the teller. 

The suspect left the note at the bank and law enforcement officers were able to process it for fingerprints. According to the complaint, at least one fingerprint was used to identify Mafua as the robbery suspect.  Additionally, video surveillance of the robbery was shown on local news programs and law enforcement officers received a tip identifying the bank robbery suspect as Mafua.

Mafua was arrested Feb. 2.  U.S. Magistrate Judge Evelyn J. Furse found him to be a danger to the community and ordered him detained pending trial.  Mafua will be arraigned Thursday afternoon on the charges in the indictment.

The case is being investigated by the FBI Safe Streets Task Force, the Salt Lake Unified Police Department, and the West Valley City Police Department.

SALT LAKE CITY – A federal grand jury returned a five-count indictment Wednesday afternoon charging John Reid Clayton, age 29, of Stansbury Park, Utah, with four counts of production of child pornography and one count of possession of child pornography.

The indictment alleges Clayton knowingly used four minor children to engage in sexually explicit conduct for the purpose of producing visual depictions of the conduct. According to the indictment, the children were born in 2007, 2010, and 2011.

The indictment follows an investigation by the Tooele County Sheriff’s Office, the Tooele City Police Department, and the Utah Internet Crimes Against Children task force. A federal arrest warrant has been issued for Clayton, who is in state custody.

The potential maximum penalty for each count of production of child pornography is 30 years in prison with a 15-year minimum mandatory sentence. Possession of child pornography carries a potential sentence of 10 years in prison.

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

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

SALT LAKE CITY – A jury convicted a Compton, Calif., man of manufacturing a controlled substance by cultivation in connection with a 2012 marijuana grow on U.S. Forest Service land in Iron County following a three-day trial late last week in U.S. District Court.

Roman Juarez-Sanchez, age 46, faces up to life in federal prison for the conviction with a 10-year mandatory minimum sentence. U.S. District Judge Ted Stewart, who presided over the trial, set sentencing for April 1, 2013, in St. George.

In recent years, drug trafficking organizations have been cultivating marijuana in the mountains of Southern Utah. Federal, local, and state agencies are coordinating efforts to reduce and eliminate this illegal and dangerous practice.

“This is a victory in the fight against marijuana grows on Utah’s public lands. DEA will continue to stand steadfast with our federal, state and local partners to keep dangerous drug trafficking organizations from setting up grow operations on public lands in Utah,” Frank Smith, Assistant Special Agent in Charge of DEA in Salt Lake City, said today.

Iron County Sheriff Mark Gower believes law enforcement officers in Utah have found a successful strategy for dealing with marijuana grows. “We have adopted a policy of being proactive rather than reactive in dealing with drug traffickers attempting to grow marijuana on Utah’s public lands. We’ve been aggressive in our efforts to identify and investigate those cultivating the marijuana as well as those who support the operations, like the defendant convicted in this case. Ultimately, successful cases start with boots on the ground and solid investigative work,” Sheriff Gower said.

Acting on tips from a citizen, law enforcement officers located the Iron County grow in July of last year and began conducting surveillance of the area to identify those involved in the grow operation. Officers executed a traffic stop later in July and arrested three individuals in the area of the grow. Jaurez-Sanchez was in the car along with two other individuals, Gabriela Lopez, age 25, of Compton, and Marcelo Balderas-Contreras, age 28, of Mira Loma, Calif. Officers found several large bags in the trunk of the car that contained more than 80 pounds of harvested marijuana. Lopez admitted that she and Juarez left California earlier in the day to deliver food to workers at the grow site and bring back harvested marijuana. Juarez-Sanchez told officers he was to be paid $3,000 for the trip. He said he knew where to meet the grow workers because he had been communicating with the on-site grow supervisor.

Law enforcement officers raided the marijuana grow a few days later but made no additional arrests. Officers found 4,211 marijuana plants at the grow site.

Evidence at Juarez-Sanchez’ trial last week showed that he played a significant role in the marijuana cultivation operation. Specifically, he organized the transportation of workers and supplies into the grow area and was trusted to haul large quantities of marijuana out of the cultivation site.

U.S. Attorney for Utah David B. Barlow said Juarez-Sanchez’ conviction should send an important message to those involved in marijuana cultivation operations. “This case illustrates that a person need not be physically present in the grow area to be considered a key player in a marijuana-grow operation. There was no evidence this defendant was ever in the grow site itself or that he ever planted, tended, or cut the plants himself. However, we had strong evidence that his efforts helped facilitate the crime. We will continue to aggressively prosecute those who are involved in marijuana grows on Utah’s public lands, including those whose actions aid and abet the operation,” Barlow said.

Prosecutors said that in addition to the 4,211 marijuana plants found at the cultivation area, forest trees were cut down, scarce water was diverted to the grow, and those involved in the cultivation left a large amount of trash in the national forest.

The two other defendants in the case, Lopez and Balderas-Contreras, reached plea agreements with federal prosecutors. Both pleaded guilty to one count of manufacture of a controlled substance by cultivation. Lopez admitted she aided and assisted in delivering food to those working in the Iron County marijuana cultivation site and helped transport harvested plants from the grow area. Balderas-Contreras admitted he assisted in cultivating marijuana plants and in transporting harvested marijuana away from the cultivation site. Sentencing for both is scheduled for March 4, 2013, in St. George.

“The organizations that grow and traffic marijuana on public lands pose a significant threat to public safety. Additionally, they do significant damage to our natural resources and public lands. The special agents and law enforcement officers of the U.S. Forest Service stand firm in their commitment to work with local, state, and federal partners to investigate, prosecute, and dismantle the organizations that choose to use our public lands to further their criminal enterprises,” Mike McKinney, Special Agent in Charge of the U.S. Forest Service in Utah, said today.

Local, state, and federal officers and prosecutors believe their unified efforts in the identification, investigation, and prosecution of individuals involved in marijuana grow operations in Utah is reducing the number of plants and grows in Utah. During the 2010 Utah outdoor marijuana grow season, enforcement efforts resulted in the seizure of 106,845 plants from 17 grows. In 2011, 78,363 plants were seized in nine grows. The 2012 grow season ended with a total of 13,177 plants seized from four grows.

The case was prosecuted by Assistant U.S. Attorneys Paul Kohler and Matt Bell with DEA Special Agent Cliff Lark as the lead case agent.

SALT LAKE CITY – Robert Clifton Tanner, age 45, of Mansura, Louisiana, pleaded guilty to mail fraud Thursday afternoon in U.S. District Court in connection with a scheme to use the mail to assert false claims of indebtedness totalling billions of dollars against judges and others. U.S. District Judge David Sam imposed a 30-month sentence following the guilty plea.

Tanner and Maria Melody Fuentes Cecil Mobo, age 42, of Spanish Fork, Utah, were indicted in August on four counts of mail fraud. The charges alleged they filed or attempted to file liens and claims against judges, attorneys, and others in Utah by mailing documents and filing fictitious judgments and liens that were intended to create an appearance of indebtedness for the judges, attorneys, and others.

As a part of his plea agreement, Tanner admitted that on April 23, 2012, he used the U.S. Postal Service to send a fraudulent document to Utah County as a part of his fraud scheme. The indictment identified the title of the document as a “Petition for Agreement and Harmony in the Nature of a Notice of International Commercial Claim Administrative Remedy.” He admitted that the mailed documents were designed to support false and fraudulent claims which were filed with the Utah County Clerk’s Office.

Federal prosecutors said other state and federal jurisdictions in Louisiana and Utah had agreed to forego additional charges against Tanner as a part of the plea agreement and 30-month sentence.

Mobo faces a Feb. 25, 2013, trial date on four counts of mail fraud.

SALT LAKE CITY -- A federal grand jury in Salt Lake City returned an indictment Wednesday afternoon charging Gerrit Timmerman III, 70, of Midvale, Utah, and Carol Sing, 73, of Henderson, Nev., with one count of conspiracy to defraud the United States. The indictment was announced by Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division and U.S. Attorney for the District of Utah David B. Barlow.

According to the indictment, from April 23, 2004, through March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing corporations sole as a part of a scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that so-called “corporations sole” were exempt from United States income tax laws, had no obligation to file tax returns, and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole. During the life of the conspiracy, Timmerman and Sing were responsible for the creation of approximately 90 corporations sole; at the time their corporation soles were created, these clients had outstanding federal income tax assessments totaling at least $5,000,000.

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Timmerman and Sing each face a maximum of five years in prison and a fine of up to $250,000.

The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Michael Romano and Dennis Kihm.

SALT LAKE CITY – James Hector Alcala, age 44, of Salt Lake City, charged in a 2009 federal indictment with alien smuggling and visa fraud, was arrested on a fugitive warrant as he attempted to re-enter the United States on Christmas Day at the San Ysidro Port of Entry in California. The fugitive arrest warrant was issued for Alcala after he violated conditions of his pre-trial release in Utah and fled the United States in December 2010.

Alcala was taken into custody by the U.S. Marshals Service in San Diego and had an initial appearance in federal court in California on Dec. 26, 2012. Alcala waived his removal hearing, which had been scheduled for Tuesday afternoon in California, and will be transferred to Utah by the Marshals Service. It may take a few weeks for Alcala to be returned to Utah. An initial appearance will be set once he is back in Utah.

Alcala was charged in a federal indictment unsealed in July 2009. In addition to Alcala, the Alcala Law Firm, Westside Property Management, and seven other individuals were charged with conspiracy to commit alien smuggling and visa fraud; encouraging and inducing illegal aliens to come to, enter, or remain in the United States; and visa fraud. The indictment alleged that the defendants in the case circumvented the law to obtain visas for employers and the foreign national workers they were employing in Utah. The indictment alleged defendants conspired to profit financially by assisting Utah employers in obtaining H-2B visas for their foreign-national workers by fraudulently representing to the federal government that the foreign nationals were eligible for visas when, in fact, they were not.

Charges against two individuals charged in the indictment, Daniel Trigo Villavicencio, age 34, of Orem and Gustavo Ballesteros-Munoz, age 49, of West Jordan, have been dismissed by federal prosecutors. A fugitive warrant remains in place for Carlos Enrique Gomez-Alvarez, age 44, of Salt Lake City, who fled the country in 2009 after his arrest and initial appearance on the charges in New York.

Arrest warrants, issued at the time of indictment, are still in place for Florentino Jose Ayal Villarreal, age 42, and Olga Adriana Garza Muniz, age 50, both Mexican nationals.

Carlos Manuel Vorher, age 46, of Tooele; Andres Lorenzo Acosta Parra, age 34, of Salt Lake City; and Westside Property Management have pleaded guilty to charges stemming from their involvement in the case. Sentencing hearings are pending.

Westside Property Management, represented by its president, Janet Alcala, pleaded guilty in October 2012 to two counts of visa fraud. According to the plea agreement, Westside Property Management admitted that the company made false representations on immigration forms for several foreign nationals. Westside Property Management falsely stated on the applications that the individuals would be working for the property management company when, in fact, the company knew that the foreign nationals were going to work for a different Utah-based employer that was another client of the Alcala Law Firm. Mrs. Alcala admitted that the company knew that the false statements would be relied on by the U.S. Citizenship and Immigration Services to award temporary employment visas to the individuals. Westside Property Management has agreed to forfeit all interests in several pieces of property purchased with proceeds from the criminal offenses.

Parra pleaded guilty in October 2010 to misprison of a felony, charged in a superseding Felony Information. Parra admitted that he worked for the Alcala Law Firm where he assisted clients in obtaining H-2B visas for their foreign-born employees. Parra, who worked for 10 years as a visa assistant in the U.S. Consulate in Ciudad Juarez, Mexico, and was trained in immigration law, said he quickly learned that the law firm was fraudulently obtaining visas. He admitted he was with law firm employees and associates in Mexico when they instructed foreign nationals to falsify information on forms and to give deceptive answers to questions during the visa interview process. Parra admitted that although he knew the law firm was engaged in fraud, he did not notify the government of the fraud. He also admitted that he knew his presence and comments helped lend support and credibility to the fraudulent scheme.

Vorher pleaded guilty in April 2010 to one count of conspiracy to commit alien smuggling and visa fraud, admitting that he worked with others at the law firm to process H-2B visa petitions for clients he knew did not qualify for the visas. He admitted knowing that clients were looking to get visas for their current workforce, which consisted primarily of Mexican nationals who were not legally in the country. Clients were not looking to fill any employment vacancies as envisioned by the H-2B visa program. Vorher is a former U.S. Border Patrol agent.

The case was investigated by the U.S. Department of State’s Diplomatic Security Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; U.S. and Citizenship and Immigration Services; the U.S. Department of Labor; and the U.S. Attorney’s Office.

SALT LAKE CITY – Mauricio R. Munoz, age 49, of Sandy, who pleaded guilty to wire fraud and money laundering in connection with a construction fraud scheme involving five lots in the Promontory Point development located near Park City, will serve 41 months in federal prison. U.S. District Judge Ted Stewart imposed the sentence Wednesday in federal court in Salt Lake City.

Two other defendants in the case, Daniel Alfonso Blanco, age 41, of West Jordan, and Michael Russell Held, age 48, of Pullman, Washington, were each sentenced to 30 months in federal prison. Each defendant was ordered to pay $2,944,760.46 in restitution in connection with other co-defendants and Blanco and Munoz were ordered to forfeit $2,944,760.46 in currency. Held, who Judge Stewart found to be a minimal participant in the scheme, was not included in the forfeiture judgment. Munoz, Blanco, and Held, who will surrender to begin their prison sentences on Feb. 18, 2013, will be on supervised release for 36 months when they complete their prison sentence.

Justin Hatton, age 40, of Salt Lake City, who was charged in a separate indictment in connection with the scheme, has pleaded guilty to bank fraud, money laundering, and filing a false tax return. He is scheduled to be sentenced Friday at 2 p.m. by U.S. District Judge Tena Campbell.

The cases were investigated by special agents of the FBI and IRS Criminal Investigation.

According to documents filed in court, the defendants joined with Hatton in 2007 in falsifying paperwork and making misrepresentations to persuade a father and son living in Park City to lend a substantial portion of their personal savings to place five high-dollar lots ($645,900-$919,000 each) under contract. The defendants misrepresented to the victims that the lots had values of between $1.25 million and more than $1.8 million.

These misrepresentations convinced the victims that they were safe in making bridge loans of $4,414,389 at financial market rates with the understanding that the buyers had paid large down-payments and that the properties, which served as security for the loans, were worth approximately twice what they were lending. Munoz and Hatton asserted that the bridge loans would soon be replaced by a series of construction loans and later, long-term financing. The victims were promised that the construction loans would repay the bridge loans and end their involvement within less than two months.

At the end of the day, court records show, the victims learned that their funds were secured by lots worth less than half the loan. The construction financing that purportedly would pay them off was briefly pursued but not obtained. Hatton, Munoz, and Blanco channeled hundreds of thousands of dollars from the deals. Approximately $600,000 was laundered through the bank account of Munoz’ mother and divided between Hatton and Munoz. Held, who forged false contracts and documents, appears to have received no more than $300 related to the transactions. A witness reported that Blanco was paid $10,000 for creating essentially double closing documents – one set that reflected the true closing of the loans and diversion of excess loan proceeds to the co-conspirators and another set reflecting a false closing to make the bridge lenders feel comfortable that their loan proceeds had been applied as promised.

The bridge loans were not repaid and the victims suffered substantial losses on each transaction.