Western District of Washington

(Seattle)—A 19-year-old Tacoma man who attended a Seattle protest armed with an improvised explosive device is now charged federally, announced U.S. Attorney Brian T. Moran.  SAMI C. HORNER is charged with unlawful possession of a destructive device.  HORNER made his initial appearance on the charge today in U.S. District Court in Seattle. 

According to the criminal complaint, on Wednesday night, August 26, 2020, HORNER was identified in a group of people that first assembled at Volunteer Park on Seattle’s Capitol Hill.  As the group marched on 15th Avenue East, HORNER was observed smashing windows at a bank branch.  HORNER was chased down and arrested.  In his backpack law enforcement found a glass bottle with a wick, filled with flammable material.  HORNER also carried two lighters, a helmet, a mask with filters, and a walkie-talkie.  The glass bottle, more commonly referred to as a Molotov Cocktail, fits the legal definition of an incendiary device.

Possession of an improvised explosive device is punishable by up to ten years in prison and a $250,000 fine.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law. 

The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Seattle Police Department.  The case is being prosecuted by Assistant United States Attorney Thomas Woods. 

 

(Seattle) -  A 19-year-old Alaska man was charged with arson today for the fire he set Monday, August 24, 2020 at the Seattle Police Department’s East Precinct, announced U.S. Attorney Brian T. Moran.  DESMOND DAVID-PITTS was arrested shortly after the fire following a Monday night protest march. DAVID-PITTS appeared today in U.S. District Court in Seattle.

“This is the fourth defendant to appear in federal court after being charged with criminal conduct that went far beyond any peaceful protest,” said U.S. Attorney Brian Moran. “Those who go to protest but choose violence and criminal acts over protected speech will face the full weight of federal criminal sanctions.  This illegal conduct must end.”

“The intentional fire set Monday evening in an organized, pre-planned attack endangered the lives of our officers and our entire community.  This was not a peaceful protest, or demonstration for equity, but an act of lawlessness.  We are grateful our federal partners at the U.S. Attorney’s Office recognize the criminal nature of these acts and are holding those responsible accountable,” said Seattle Police Chief Carmen Best.

Deputy Chief Adrian Diaz promised to maintain the SPD’s federal partnerships as he takes command of the Department and added “We are hopeful that the federal charges now filed against Mr. David-Pitts will serve as a warning that crimes of violence will not be tolerated in Seattle.”

According to the criminal complaint, DAVID-PITTS had arrived in Seattle from Alaska just three days before Monday’s protest.  After marching with the group in downtown Seattle, DAVID-PITTS is seen on surveillance video piling up trash against the sally-port door at the Seattle Police East Precinct.  Over an eleven minute period the surveillance video captures DAVID-PITTS not only piling up the trash, but repeatedly lighting it on fire and feeding the flames with more trash.  While DAVID-PITTS was lighting the fire, other people who appeared on the surveillance were attempting to use crowbars and cement-like materials to try to disable the door next to the sally-port to prevent officers from exiting the building.  At various times DAVID-PITTS appeared to be communicating with the others.  Despite efforts to disable the door, officers were able to get outside and extinguish the flames.  A similarly equipped group set a second fire around the corner from the DAVID-PITTS arson, and DAVID-PITTS was seen on surveillance working with the others to cut through a chain-link fence that was a barrier around the building.  The second fire was extinguished by Seattle Police Officers and members of the Seattle Fire Department.

DAVID-PITTS was identified less than an hour later in the crowd outside the precinct because of the distinctive pink camouflage trousers he was wearing.  He was arrested without incident.

Three people have already been charged with federal crimes in connection to civil unrest:

• On July 15, Isaiah Thomas Willoughby was charged with arson in connection with a fire set at the East Precinct.
• On June 11, Margaret Aislinn Channon was charged with arson for setting five Seattle Police vehicles on fire.
• On June 10, Devinare Antwan Parker was charged with possessing a destructive device for bringing an improvised firearm to a protest.

Arson is punishable by a mandatory minimum five years in prison and up to twenty years in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorney Todd Greenberg.

Tacoma -  A registered sex offender currently jailed in Skamania County pleaded guilty today in U.S. District Court in Tacoma to production of child pornography, announced U.S. Attorney Brian T. Moran.  STEVEN LEE McBRIDE, 51, faces a mandatory minimum 15-years in prison when sentenced by U.S. District Judge Benjamin H. Settle on October 26, 2020.  Under the terms of the plea agreement, prosecutors will recommend no more than 25-years in prison, and the defense will recommend no less than 18 years in prison.  Judge Settle is not bound by the recommendations and can impose any sentence up to the maximum of 30 years in prison.

According to records filed in the case, in 2007, McBRIDE was convicted in Idaho of molesting two children under the age of 16 and was required to register as a sex offender following a state prison term of up to 15-years. Upon release from prison, McBRIDE moved to a residence in Skamania County.  There he moved next door to a distant relative and befriended that neighbor’s child.  Between September 2017 and May 2019, McBRIDE made sexually explicit images of the child by hiding a camera in the bathroom, molesting the child while the child slept and ultimately by posing as a school friend of the child online to demand the child send sexually explicit images.  McBRIDE threatened to kill the child’s family if the child did not continue to provide the photos.

Law enforcement learned of the production of child pornography when investigators in Queensland, Australia became aware of McBRIDE providing sexually explicit images online in their jurisdiction.  An undercover officer contacted McBRIDE and got additional information about the identity of the victim from McBRIDE.  The Vancouver Police Department and Homeland Security Investigations moved quickly to alert the victim’s parent and arrest McBRIDE on June 7, 2019. 

McBRIDE is charged in Skamania County Superior Court for the hands-on molestation. Under the terms of the plea agreement his state and federal sentences will run concurrently.

The case was investigated by Homeland Security Investigations with assistance from the Vancouver Police Department and the Queensland Australia Police.

The case is being prosecuted by Assistant United States Attorney Angelica Williams.

WASHINGTON – Massachusetts-based DUSA Pharmaceuticals Inc. (DUSA), a subsidiary of Sun Pharmaceutical Industries Inc. (Sun Pharma), has agreed to pay the United States $20.75 million to resolve allegations that DUSA caused physicians to submit false claims to Medicare and the Federal Employee Health Benefit Program (FEHBP) by knowingly promoting an administration process for the drug Levulan Kerastick that contradicted the product instructions approved by the U.S. Food and Drug Administration (FDA) and was unsupported by sufficient clinical evidence. 

“The department is committed to protecting taxpayer-supported health care programs from fraud and abuse,” said Acting Assistant Attorney General Ethan P. Davis for the Justice Department’s Civil Division.  “We will hold drug manufacturers accountable when they knowingly promote ineffective uses of their products that undermine patient care or waste program funds.”

“While this scheme to provide false instructions on the use of its product may have resulted in more sales and bigger profits, it also meant customers endured the frustration of being repeatedly subjected to less effective treatments to try to get their skin lesions to clear,” said U.S. Attorney Brian T. Moran for the Western District of Washington. “This investigation seeks to restore money to taxpayers and discourage those who put profits over effective treatment.”

“Drug makers that push the inappropriate use of their products undermine the health of patients and the financial integrity of federal health care programs, said Special Agent in Charge Steven J. Ryan of the U.S. Department of Health and Human Services Office of Inspector General.  “Our oversight agency, working closely with our law enforcement partners, will continue to thoroughly investigate those who engage in such schemes.”

“The OPM OIG will always seek to hold accountable those prioritizing profits over patient health and safety,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, Office of Personnel Management (OPM) OIG. “This settlement demonstrates the commitment of our investigative staff and partners at the Department of Justice to combat health care fraud against the FEHBP.”

Levulan Kerastick is a prescription topical solution approved by the United States Food and Drug Administration (FDA) for the treatment of minimally to moderately thick actinic keratosis (AKs) of the face or scalp.  At all relevant times, the “Dosage and Administration” section of the drug’s FDA-approved instructions described a two-stage process involving application of the topical solution to the target lesions and then, following an incubation period of 14 to 18 hours, illumination of the target lesion with blue light.  

The United States alleged that, by January 2014, senior management at both DUSA and Sun Pharma knew that administration of Levulan Kerastick employing short incubation periods ranging from one to three hours resulted in AK clearance rates significantly lower than those achieved in clinical trials using 14 to 18-hour incubation.  Nonetheless, between January 2014 and December 2016, DUSA allegedly encouraged physicians to use these demonstrably less effective short incubation periods by using, among other things, paid physician speaker programs, paid physician peer-to-peer discussions, promotion by DUSA’s sales force, and the dissemination of incomplete or misleading responses to questions from prescribing doctors.  The department further alleged that DUSA failed to inform physicians that administering the drug using short incubation periods resulted in significantly lower AK clearance rates than achieved with the longer incubation period described in the FDA-approved instructions, and, in some instances, the company falsely stated that AK clearance rates were the same for the shorter and less effective incubation periods. 

As part of the settlement, DUSA and its parent company, Sun Pharma, have agreed to enter into a Corporate Integrity Agreement with HHS-OIG.  That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.    

The settlement with DUSA resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed by Aaron Chung, who formerly worked for DUSA as a sales representative.  As part of today’s resolution, Chung will receive approximately $3.5 million.

The settlement with DUSA was the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of Washington and the Commercial Litigation Branch (Fraud Section) of the Justice Department’s Civil Division, with assistance from HHS’ Office of Counsel to the Inspector General, FDA’s Office of Chief Counsel, and HHS’ Office of General Counsel.  

The settlement was handled by Assistant United States Attorneys Kayla Stahman for U.S. Attorney’s Office, Western District of Washington and Breanna Peterson of DOJ’s Civil Division Commercial Litigation Branch.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit is captioned United States of America ex rel. Chung v. DUSA Pharmaceuticals, Inc., No. 16 cv 1614-JLR. 

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Tacoma - Two South King County men and a former U.S. Navy sailor have been indicted for conspiracy and various drug distribution and firearms charges in connection with their trafficking in counterfeit pills laced with deadly fentanyl, announced U.S. Attorney Brian T. Moran.  CHASE FRIEDRICH, 28, was arrested April 21, 2020, at his Des Moines, Washington, apartment.  His drug supplier, RAOUL V. NORMANDIA, JR., 28, was arrested April 24, 2020, near his Federal Way, Washington, residence.  IVAN ARMENTA, 20, was separated from the Navy and taken into federal custody August 7, 2020.  FRIEDRICH sold counterfeit Percocet pills to Navy Sailor ARMENTA, who then provided them to another sailor who died of a drug overdose.  The pills were tainted with deadly fentanyl. 

The investigation began April 18, 2020, when a Navy sailor was found dead in his workspace aboard a Navy ship.  In his pocket were two counterfeit pills that were laced with fentanyl.  The Naval Criminal Investigative Services (NCIS) were able to identify ARMENTA as the sailor who provided the pills to the victim and identified FRIEDRICH as his supplier.  A search of FRIEDRICH’s apartment revealed cocaine, a handgun, and a bag of approximately 100 counterfeit pills.

Investigators were able to trace the pills to NORMANDIA.  He was arrested a few blocks from his home.  In the vehicle was cocaine.  During a court‑authorized search of NORMANDIA’s residence, law enforcement recovered cocaine, MDMA, firearms, ammunition, body armor, narcotics, and various signs of the drug trade, including scales, baggies, heat sealers, Moneygram receipts, and twenty cell phones.

NORMANDIA and FRIEDRICH are charged with conspiracy.  FRIEDRICH and ARMENTA are each charged with distribution of fentanyl.  FRIEDRICH is also charged with possession of cocaine and fentanyl with intent to distribute, and with possession of a firearm in furtherance of a drug trafficking crime.  Finally, NORMANDIA is charged with possession of MDMA and cocaine with intent to distribute and with possession of a firearm in furtherance of a drug trafficking crime. 

All three defendants face a statutory maximum term of up to twenty years in prison.  The possession of a firearm in furtherance of a drug trafficking crime calls for an additional consecutive prison term of five years.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by NCIS and the Kitsap County Sheriff’s Office as a part of the West Sound Narcotics Enforcement Team (WestNET) and is being prosecuted by Assistant United States Attorney Lyndsie Schmalz.

(Seattle) — A Lynnwood, Washington, couple arrested in late July on Snohomish County drug possession charges is now charged federally following a lengthy undercover investigation, announced U.S. Attorney Brian T. Moran.  JOSE L. CASABLANCA, 38, and JESSIE N. CRUZ, 37, are charged by a federal criminal complaint which details a lengthy undercover investigation which began in March 2020.  The pair made their initial appearance on the complaint today.

The criminal complaint details how two detectives with the Snohomish Regional Drug Task Force (SRDTF) posed as drug and gun buyers to gather information about the pair’s drug trafficking activity.  The undercover detectives made purchases of heroin, methamphetamine, and fentanyl pills from CASABLANCA and CRUZ.  They also purchased a fully automatic firearm, judged an illegal machine gun, and other firearms from the pair.  CASABLANCA is a convicted felon and prohibited from possessing firearms, so the two discussed how CRUZ transported the guns to the sale location so that CASABLANCA would not be caught with a firearm.

CRUZ and CASABLANCA confided to the undercover detectives where they had hidden a massive amount of fentanyl in their Lynnwood home.  On the day they were arrested at a regional airport, they met with yet another undercover officer who was posing as someone who could get them access to a pill press to make fentanyl tainted pills from their large stash of the potentially deadly drug.  A court-authorized search warrant at the Lynnwood home resulted in the seizure of large amounts of heroin, fentanyl, multiple firearms, and ammunition, as well as body armor.

At the time of their arrest law enforcement searched the Maserati the couple used in their drug trafficking activities and found both narcotics and a firearm.

CASABLANCA is charged with two counts of being a felon in possession of firearms due to his prior convictions for robbery and burglary (Snohomish County 2006) and possession of a controlled substance with intent to deliver (Snohomish County 2011).  CASABLANCA and CRUZ are both charged with three additional federal felonies: possession of fentanyl with intent to distribute; possession of heroin with intent to distribute; and possession of firearms in furtherance of a drug trafficking crime.  

Being a felon in possession of a firearm is punishable by up to five years in prison.  Given the drug quantities, the drug counts are punishable by a mandatory minimum five years in prison.  The use of a firearm in furtherance of a drug trafficking crime results in an additional five-year sentence to run consecutive to the drug trafficking term.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Snohomish Regional Drug Task Force and the United States Marshals Service Violent Offender Task Force, with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).

The case is being prosecuted by Assistant United States Attorney Kate Crisham.

casablanca_and_cruz_complaint.pdf

(Seattle) — A repeat offender, who had just been released to a half-way house from federal prison, has been indicted by the grand jury for attempted sex trafficking of a juvenile and attempted enticement of a minor, announced U.S. Attorney Brian T. Moran.  PRENTICE C. HOLLINGSWORTH, 45, faces a mandatory minimum ten years in prison if convicted of the charges.  HOLLINGSWORTH will be arraigned on the charges August 20, 2020.

According to records filed in the case, HOLLINGSWORTH was released to a federal half-way house in Tacoma in December 2019.  Less than a month later, he began communicating with an undercover Seattle Police Officer he had contacted via a web application.  In these communications, HOLLINGSWORTH attempted to recruit the undercover officer, who presented herself as a 15-year-old girl, to work for him as a prostitute.  HOLLINGSWORTH discussed many aspects of the prostitution business, including the fee he would charge the “juvenile” for his services as a pimp and the prices she should charge for various sex acts.  HOLLINGSWORTH also advised the “juvenile” that she could earn more money from sex buyers because of her age, and he encouraged her to leave school so she could devote more time to earning money in the sex trade.

In January 2020, HOLLINGSWORTH was arrested at the half-way house in Tacoma shortly after he arranged for the “juvenile” to check into a hotel room in Fife, Washington, for the purpose of prostitution.  

Both counts in the indictment are punishable by a mandatory minimum ten years in prison and up to life in prison.  HOLLINGSWORTH is already on lifetime federal supervised release because of prior sex offenses.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Seattle Police Department.  The case is being prosecuted by Assistant United States Attorney Kate Crisham.

(Seattle) — Three men, all registered sex offenders, were indicted by a federal grand jury for possessing images of child pornography, announced U.S. Attorney Brian T. Moran.  In each case, the defendant has served prison time for sex offenses against children and are subject to monitoring by federal probation or the Washington State Department of Corrections.  All three will be arraigned on the indictments in the next few weeks.

McKENNA DANILO BERNARDO, 23, of Burien, Washington, was charged by criminal complaint on April 30, 2020, following an investigation by Homeland Security Investigation, the King County Sheriff’s Office, and Washington State Department of Corrections.  In 2019, BERNARDO was sentenced in King County Superior Court to fourteen months in prison and three years of probation for possession of child pornography.  Under the terms of his probation, BERNARDO’s use of electronic devices is limited and monitored.  During a home inspection in February 2019, BERNARDO was found to have unauthorized electronic devices.  Forensic examination of the devises revealed that they contained child pornography. 

JASON ALLEN LEGG, 44, of Seattle, was charged by criminal complaint on April 30, 2020, with possession of child pornography.  LEGG has prior convictions in Georgia (1998) and King County Superior Court (2005).  The King County conviction resulted in a ten-year sentence for rape of a child.  In November 2018, LEGG’s probation officer received information that LEGG had an unauthorized Facebook page.  Further investigation by the probation officer and the Seattle Police Department revealed LEGG had a number of unapproved electronic devices, some of which contained images of child rape and abuse.

DAVID CRAIG MARTIN, 64, of Seattle, was charged by criminal complaint on May 14, 2020, with possession of child pornography.  MARTIN has been convicted of multiple sex offenses: Child Molestation 3rd Degree in Pierce County Superior Court (2001); Indecent Exposure in King County Superior Court (2009); Indecent Exposure in King County Superior Court (2015); and Voyeurism in Clark County Superior Court (2016).  In late 2019, Google reported to the National Center for Missing and Exploited Children that an account later linked to MARTIN had uploaded more than 175 images of child pornography.  The Seattle Police’s Internet Crimes Against Children Task Force and the Department of Corrections investigated and seized unauthorized electronic devices from MARTIN.  Forensic analysis by Homeland Security Investigations revealed they contain images of child rape and abuse.

BERNARDO is currently released on federal pretrial supervision.  LEGG is in the custody of the Washington State Department of Corrections.  MARTIN is detained at the Federal Detention Center at SeaTac.

Possession of child pornography is punishable by up to twenty years imprisonment, with ten-year mandatory minimum sentences for those with qualifying prior sexual offenses.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The cases are being investigated by Homeland Security Investigations in coordination with the Seattle Internet Crimes Against Children Task Force (ICAC) and the Washington State Department of Corrections.

The cases are being prosecuted by Assistant United States Attorney Cecelia Gregson.

bernardo_indictment_0.pdf legg_indictment_0.pdf martin_indictment_0.pdf

 

(Tacoma) — A Port Townsend, Washington, man who left a heroin overdose victim in a car outside a hospital emergency room pleaded guilty to drug trafficking and illegal firearms possession charges today, announced U.S. Attorney Brian T. Moran.  ADAM MICHAEL KELLY, 38, pleaded guilty to possession of controlled substances with intent to distribute and being a drug user in possession of firearms.  Under the terms of the plea agreement, both the prosecution and the defense will recommend a sentence of 66 months in prison.  However, U.S. District Judge Benjamin Settle is not bound by the recommendation and can impose any sentence up to the ten-year maximum allowed by law when KELLY is sentenced on November 2, 2020.

According to the facts in the plea agreement, on March 27, 2019, KELLY and his then-girlfriend left a 43-year-old overdose victim in a car outside the hospital emergency room.  They then called the hospital asking staff to check on the victim.  The victim died within twenty minutes.  Law enforcement traced the phone call to KELLY’s residence.  When questioned by police, KELLY admitted that the victim had used drugs in his home, that the victim became unresponsive, and that KELLY had left him at the emergency room entrance when he could not revive him.

Police obtained a search warrant for KELLY’s home and found a sophisticated drug lab in the basement with pill presses, lab equipment, vent hoods, and over 75 pounds of Schedule III controlled substances, primarily steroids.  Records seized at the lab indicate KELLY had a lucrative business selling and shipping illegal steroids across the country.

In addition to the drug lab, KELLY had a wide variety of firearms, silencers, and tactical gear.  In the lab, KELLY had a .40 caliber Glock fitted with a silencer.  In his bedroom, he had six guns, including two Glock handguns, a Bersa .22 caliber, a Winchester shotgun, a Remington 700, and a Bushmaster AR-15.  A second silencer was found in the bedroom.  Law enforcement seized a variety of ammunition, as well as a tactical vest. 

As an admitted drug user, it is illegal for KELLY to possess firearms.  When KELLY was arrested, he had both heroin and methamphetamine in his possession. 

KELLY is currently serving a 68-month state sentence for controlled substance homicide, a charge arising out of this same investigation.  As part of a global resolution of the state and federal charges, the parties will recommend that the federal sentence run concurrent to the state sentence.  KELLY has been in custody since his arrest on March 28, 2019.

The case was investigated by the Port Townsend Police Department, Jefferson County Sheriff’s Office, and Federal Bureau of Investigation, with assistance from other local and federal law enforcement agencies.

The case is being prosecuted by Assistant United States Attorney William Dreher.

(Seattle)—A 32-year-old Seattle man was charged August 5, 2020, by criminal complaint, with Transportation of a Minor with Intent to Engage in Prostitution or Criminal Sexual Activity, announced U.S. Attorney Brian T. Moran.  GARY STENSLAND, was arrested yesterday and made his initial appearance in U.S. District Court in Seattle.

According to the criminal complaint, in September 2018, STENSLAND traveled to Portland to meet a 13-year-old whom he had contacted via an internet app.  STENSLAND returned to Seattle with the minor and paid the minor for sex.  STENSLAND then drove the youth back to Portland.  The youth just recently disclosed the abuse.

On August 5, 2020, the FBI, as part of the Seattle Internet Crimes Against Children (ICAC) Task Force, executed a search warrant at STENSLAND’s residence and seized his electronic devices.  Law enforcement continues to investigate other sexual contact STENSLAND may have had with minors.

Transportation of a Minor with Intent to Engage in Prostitution or Criminal Sexual Activity is punishable by a mandatory minimum ten years in prison and up to life in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

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 United States Attorneys' Offices and the Criminal Division'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 via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

The case is being investigated by the FBI in conjunction with the Internet Crimes against Children Task Force.  The case is being prosecuted by Assistant United States Attorney Matthew Hampton.

Seattle)—Twelve members of a drug trafficking group distributing fentanyl, heroin, methamphetamine, and cocaine throughout the Puget Sound region were arrested today following a year-long investigation and two grand jury indictments, announced U.S. Attorney Brian T. Moran.  The members of the conspiracies engaged in trafficking activities from Mexico, through California and Oregon, and into the North Puget Sound region.  Those arrested today will make appearances in U.S. District Court for the Western District of Washington today and tomorrow.

“During the course of this investigation agents seized more than 20,000 pills pressed to look like oxycodone, but actually tainted with fentanyl,” said U.S. Attorney Brian Moran.  “I have had heartbreaking conversations with the parents of young people who died from fentanyl overdoses linked to counterfeit pills.  We are making it a priority to get these deadly drugs off the streets.”

“While most Puget Sound residents have been in ‘lockdown’ status because of the pandemic, our investigators and prosecutors continued pursuing those endangering our communities with indiscriminate sales of fentanyl tainted pills, heroin and methamphetamine,” said DEA Special Agent in Charge Keith Weis.  “The tough job of removing this criminal organization was accomplished through the sheer determination and dedication to our community’s safety by our law enforcement professionals.”   

In addition to the fentanyl pills, during the investigation law enforcement seized more than six pounds of heroin and nearly nine pounds of methamphetamine.  Some of the drugs were smuggled in hidden compartments in the seats of vehicles.

The indictments charge a range of drug trafficking crimes.  Those indicted include:

Delmer VELASQUEZ-Lacuna, 23, Seattle, Washington

Rodrigo ALVAREZ-Quinonez, 31, Selma, California

Elias Neftali MONTES-Sevilla, 30, Federal Way, Washington

Gustavo SANDOVAL-Agurcia, 38, Burien, Washington

Jorge Uriel ESQUIVEL-Mena, 31, Fairfield, California

Francisco Javier ESQUIVEL-Mena, 32, Aloha, Oregon

Wilmer GALINDO-Maradiaga, 26, Seattle, Washington

Jose CRUZ-Hernandez, 31, Mountlake Terrace, Washington

Jose Fernando ESCOTO-Fiallos, 32, Mountlake Terrace, Washington

Jose Alberto RAMOS, 59, Selma, California

Juan HERNANDEZ-Hernandez, 54, Bellingham, Washington

Baldemar MARTINEZ-Rico, 28, Kent, Washington

Saul SUAREZ-Mata, 34, Bellevue, Washington

Due to the drug quantities involved, some of the defendants face potential mandatory minimum ten-year sentences.  Today alone, law enforcement seized: nearly 6 pounds of methamphetamine, 8 pounds of heroin, 7,500 pills likely tainted with fentanyl, over $100,000 in cash, 4 firearms, and vehicles outfitted with “traps”—hiding places for smuggling drugs and money.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.

The investigation was conducted by the U.S. Drug Enforcement Administration in partnership with Homeland Security Investigations, Shoreline Police Department, King County Sheriff’s Office (KCSO), Seattle Police Department and the Snohomish Regional Drug Task Force (SRDTF).  The investigation was supported by the Northwest High Intensity Drug Trafficking Area (HIDTA).  In addition, to the agencies listed above, these law enforcement agencies assisted with arrests and search warrants executed today: DEA Oakland Resident Office; DEA Fresno District Office; DEA Portland District Office; DEA Bellingham Resident Office; United States Marshals Service—Seattle, Washington, and Fresno, California; Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Federal Bureau of Investigation (FBI) Seattle; FBI SWAT; Washington State Patrol; Valley SWAT; Puyallup Police Department; and Thurston County Narcotics Team.

The case is being prosecuted by Assistant United States Attorneys Stephen Hobbs and Benjamin Diggs.

us_v._velasquez-licona_et_al.pdf   us_v_sandoval-agurcia.pdf

 

(Seattle)–U.S. Attorney Brian T. Moran of the Western District of Washington today announced that three Western Washington non-profit organizations received nearly $1.5 million from the Department of Justice’s Office of Justice Programs (OJP) and its component, the Office for Victims of Crime (OVC), to provide safe, stable housing and appropriate services to victims of human trafficking.

“Human trafficking is a barbaric criminal enterprise that subjects its victims to unspeakable cruelty and deprives them of the most basic of human needs, none more essential than a safe place to live,” said Attorney General William P. Barr.  “Throughout this Administration, the Department of Justice has fought aggressively to bring human traffickers to justice and to deliver critical aid to trafficking survivors.  These new resources, announced today, expand on our efforts to offer those who have suffered the shelter and support they need to begin a new and better life.”

 “The Western District of Washington is a leader in investigating and prosecuting human trafficking, due to key partnerships between federal, state, and local law enforcement,” said U.S. Attorney Brian Moran.  “Our relationships with non-profit organizations who provide support to human trafficking victims is key to rescuing victims from this modern day slavery.”

The three grants, awarded to YouthCare, The YMCA of Greater Seattle, and the International Rescue Committee Inc., will provide 6 to 24 months of transitional or short-term housing assistance for trafficking victims, including rental, utilities, or related expenses, such as security deposits and relocation costs.  The grant will also provide funding for support needed to help victims locate permanent housing, secure employment, as well as occupational training and counseling.  YouthCare and the YMCA each are receiving $500,000.  The International Rescue Committee Inc., is receiving $499,996.  The three non-profits are among 73 organizations receiving more than $35 million in OVC grants to support housing services for human trafficking survivors.

“Human traffickers dangle the threat of homelessness over those they have entrapped, playing a ruthless game of psychological manipulation that victims are never in a position to win,” said OJP Principal Deputy Assistant Attorney General Kathrine T. Sullivan.  “These grants will empower survivors on their path to independence and a life of self-sufficiency and hope.”

Human trafficking offenses are among the most difficult crimes to identify, and the scope of human trafficking victimization may be much greater than the limited data reflect.  A new report issued by the National Institute of Justice, another component of the Office of Justice Programs, found that the number of human trafficking cases captured in police reports may represent only a fraction of all such cases.  Expanding housing and other services to trafficking victims remains a top Justice Department priority.

The Office for Victims of Crime, for example, hosted listening sessions and roundtable discussions with stakeholders in the field in 2018 and launched the Human Trafficking Capacity Building Center.  From July 2018 through June 2019, 118 OVC human trafficking grantees reported serving 8,375 total clients, including confirmed trafficking victims and individuals showing strong indicators of trafficking victimization.

For a complete list of individual award amounts and jurisdictions that will receive funding, visit: https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/htvictimsfactheet.pdf

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The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims, and enhance the rule of law by strengthening the criminal and juvenile justice systems.  More information about OJP and its components can be found at www.ojp.gov.

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

U.S. Attorney Brian T. Moran today highlighted the important work carried on by the Civil Rights Unit of the U.S. Attorney’s Office, Western District of Washington, as part of the 30thAnniversary of the Americans with Disabilities Act (the ADA).  The law, a critical civil rights measure that aims to eliminate discrimination against people with disabilities, was signed into law on July 26, 1990. 

“Well before the ADA was passed, I grew up with a family member who relied on a wheel chair.  I remember the added challenge to daily life this presented to our family, and appreciate how much we have progressed in ensuring access and participation,” said U.S. Attorney Brian Moran.  “I want to thank the members of the community who have brought complaints to our attention in recent years, allowing us to use the ADA to advance the cause of equal access throughout this District. The more we know about barriers facing members of our community with disabilities, the more we are able to vindicate their rights under this important legislation.”

In recent years, the U.S. Attorney’s Office has investigated a number of ADA cases.  This includes working with the City of Aberdeen to improve access for people with visual impairments; working with Chateau Ste. Michelle and its concert venue to improve access for people with disabilities; working with childcare centers to improve access for children with diabetes; and working with Highline Medical Center, Overlake Medical Center, and the Washington Health Care Authority to improve access for people who are deaf or hard of hearing.

The promise of the ADA is its wide-ranging efforts to eliminate disability discrimination across the range of services, programs, and activities that most Americans take for granted, but were largely inaccessible to individuals with disabilities prior to the law’s enactment.  Whether in employment, areas of civic life, or in the day-to-day activities and access to goods and services that we all enjoy–the ADA ensures that individuals with disabilities enjoy the same opportunities as all Americans to participate in everything this nation has to offer.

Over the past 30 years, the United States has undertaken the challenge of changing perceptions about disability, tearing down barriers to equality, and altering the systems that have historically excluded people with disabilities.  The Justice Department commemorates the many ways that the ADA has transformed society—by replacing exclusion with access, segregation with integration, and limitations with self-determination.

For more information about the 30th Anniversary of the ADA, please visit www.ada.gov.  To file a complaint with the Department, please visit the Civil Rights Division’s portal at https://civilrights.justice.gov/report/.  For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).  For information on filing an ADA complaint in the Western District of Washington visit the civil rights section on our website.

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

Seattle - The 9th Circuit Court of Appeals today rejected the appeal of former Washington State Auditor TROY X. KELLEY, clearing the way for him to start serving the one-year-and-one-day sentence imposed by U.S. District Judge Ronald B. Leighton on June 28, 2018.  The court declined to hear oral argument and upheld the conviction with an order today.

“Through two trials and multiple appeals, the attorneys in this office have sought nothing but justice for those Kelley defrauded and the members of our community who expect law breakers to be held accountable regardless of their station or standing in society,” said U.S. Attorney Brian T. Moran.  “The time has come for Troy Kelley to accept his punishment and report to custody and conclude this lengthy legal odyssey.”

According to the evidence at trial, between 2003 and 2008, KELLEY operated a business that monitored real estate filings on county websites.  KELLEY agreed with escrow companies that his business would charge a flat fee of $15 or $20 for each real estate transaction it monitored for the escrow companies’ customers.  In addition to the flat fee, the escrow companies also gave Kelley $100-$150 of customer money for each transaction, which KELLEY agreed to use to pay expenses if necessary.  KELLEY agreed to refund the money to the homeowners if there were no expenses.  However, beginning in 2005, in virtually every case he handled, KELLEY kept the entire amount withheld on each transaction, thereby stealing nearly $3 million.  

In 2008, class action lawsuits were filed against escrow companies, claiming that homeowners had been charged excessive fees in real estate transactions.  After the lawsuits were filed, KELLEY falsified a letter to the plaintiff in one lawsuit to make it appear that KELLEY had refunded the plaintiff’s money, when in fact he had not.  Concerned that the lawsuits would lead to his downfall, KELLEY transferred millions of dollars of stolen money through a series of bank accounts, ultimately placing the funds in an investment account for a company controlled by a Central American trust controlled by KELLEY.  One of the escrow companies sued KELLEY to retrieve the stolen money.  KELLEY testified falsely under oath in the lawsuit that he had only kept money he had earned for services provided.  One of KELLEY’s convictions for making false declarations in a court proceeding is based on that testimony.

Beginning in 2011, KELLEY spent the stolen money on personal expenses and his campaign for State Auditor.  To hide the fact that this was money he had stolen years earlier, KELLEY claimed on his tax returns that he was continuing to perform real estate services and to earn income through his business, when in fact he had not operated the business for years.  In the same tax returns, KELLEY claimed tens of thousands of dollars of business deductions for personal items like spa treatments, a family trip, and household purchases such as sheets and toys.  KELLEY’s tax fraud convictions are based on this conduct.

In December 2017, a unanimous jury convicted KELLEY of possession of stolen property, two counts of making false declarations under oath, and six counts of tax fraud.  Following the trial, an unrelated U.S. Supreme Court ruling resulted in the dismissal of one of the tax fraud counts.

A first trial in March 2016 ended with the jury being able to reach a verdict on only one count, acquitting KELLEY on lying to the Internal Revenue Service agent who questioned him about his scheme in 2013.           

The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI.

The case was prosecuted by Assistant United States Attorneys Arlen Storm, Andrew Friedman, Seth Wilkinson and Katheryn Frierson.  Assistant United States attorney Michael Morgan handled the appeal.

18-30153._dkt._64_usv_kelley_002.pdf

Seattle - Fifteen people were arrested today throughout the Puget Sound region and in California following an 18-month investigation of a drug trafficking organization tied to the CJNG cartel in Mexico, announced U.S. Attorney Brian T. Moran.  The defendants arrested today made their initial appearance in U.S. District Court in Seattle.

“This cartel is known as a violent and prolific drug trafficking group.  I commend the DEA-led task force for taking a bite out of its drug distribution and money laundering networks,” said U.S. Attorney Brian Moran.  “Over the course of this investigation law enforcement seized more than 100 pounds of methamphetamine and ten pounds of heroin, and agents and officers continued their work despite the challenges posed by the COVID-19 pandemic.”

 “The South Sound Streets are safer today with the removal of this violent criminal ring that pushed heroin, methamphetamine and fentanyl into our communities,” said DEA Special Agent in Charge Keith Weis.  “Without question the critical partnership between local, state and federal law enforcement agencies made today’s effort possible and ultimately benefits the public’s safety.”

“The results of this operation are a clear example of what can be achieved through HSI’s partnership with state, local and federal law enforcement agencies,” said Eben Roberts, acting special agent in charge HSI Seattle.”  I commend all of the agents, officers and analysts involved in this operation. Their dedication resulted in the removal of massive amounts of narcotics from our community, the disruption of an extremely dangerous supply chain and undoubtedly saved numerous lives.”

The indictment charges conspiracy, possession, attempted possession and distribution of methamphetamine and heroin, as well as a money laundering conspiracy.  These are the nineteen defendants named in the grand jury indictment:

Alan GOMEZ MARENTES; 35, Los Angeles, California, and Tukwila, Washington

Juan Antonio GONZALEZ CARRILLO; 31, Gardena, California

Luis MAGANA RAMIREZ; 32, Fife, Washington

Jose Elias BARBOSA CEBALLOS; 35,  Port Orchard, Washington

Jose Daniel ESPINOZA; 33,  Renton, Washington

Estefhany COREA MENDOZA; 27,  Burien, Washington

Adrian IZAZAGA MARTINEZ; 29, Kent, Washington

Jorge MONDRAGON; 24, Kent, Washington

Benjamin FUENTES; 28, Renton, Washington

Luis ZAVALZA SANCHEZ; 31, Seattle, Washington

Alysha Marie JONES; 27, Shelton, Washington

Armando FIERRO PONCE; 26, Renton, Washington

Amanda MEYER; 35, Kent, Washington

Michael WOOD; 45, Port Orchard, Washington

Luis CASTILLO BARRAGAN; 32, Kent, Washington

Efrain LUNA RODRIGUEZ; 21, Maywood, California

Julian PINEDA CASILLAS; 33, Victorville, California

Blanca MEDINA; 36, Los Angeles, California, and Tukwila, Washington

Ruth GOMEZ MARENTES; 34, Kent, Washington

In all, fifteen search warrants were served in the Puget Sound region, and four were served today in California.  Today alone, agents seized: twenty pounds of methamphetamine, heroin, cocaine, 200 fentanyl pills, nine firearms, and more than $250,000 in cash.  Previously, during the investigation, law enforcement seized more than 100 pounds of meth, various quantities of cocaine, heroin, 1500 fentanyl pills, and six firearms.

This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.

The investigation was conducted by the U.S. Drug Enforcement Administration’s (DEA) Tacoma Resident Office in partnership with Tahoma Narcotics Enforcement Team (TNET), Kent Police Department, Homeland Security Investigations, SeaTac Police Department, Thurston County Narcotics Team (TNT), the Federal Bureau of Investigation, and the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF).  In addition, to the agencies listed above, these law enforcement agencies assisted in the investigation and/or with arrests and search warrants executed today:  DEA Seattle Special Response Team, Valley Narcotics Enforcement Team, Valley SWAT, Pierce County SWAT, Pierce County Sheriff’s Office, Joint Narcotics Enforcement Team, Bremerton Special Operations Group, King County SWAT, King County Sheriff’s Office Metro, Burien Police Department, Auburn Special Investigations Unit, FBI Seattle, FBI SWAT,  FBI Portland Tactical and TNET, which is comprised of Tacoma, Lakewood, Auburn, Kent, Bonney Lake and Puyallup Police Departments, the Pierce County Sheriff’s Office and the Washington State Department of Corrections.  The investigation was supported by the Northwest High Intensity Drug Trafficking Area (HIDTA).

The case is being prosecuted by Assistant United States Attorneys Amy Jaquette and Marci Ellsworth.

Limited images from this investigation are available from DEA Public Affairs Officer Jodie Underwood at Jodie.Underwood@usdoj.gov.

gomez_marentes_et_al_indictment.pdf

“I want to be very clear regarding the role of federal agents summoned to Seattle.  They are here to protect federal properties and the important work that occurs in our courthouses and federal buildings.  These are the places where federal judges decide cases and controversies, including those filed by protestors against the City, where social security benefits are processed, citizenship is made possible, and where the rights of the accused are protected.

Last weekend, the Nakamura Federal Courthouse was broken into, a smoke bomb and an American flag were burned, and the building was tagged with graffiti inside and out. These actions were not peaceful protests that my office and the Constitution works to protect.   The Nakamura building bears the name of Seattle native Private First Class William Kenzo Nakamura.  Before joining the U.S. Army in 1942, Nakamura and his Japanese American family were sent to an incarceration camp.  He died in action near Castellina, Italy on July 4th, 1944, while protecting his platoon from withering machine gun fire.  Private Nakamura was posthumously awarded the Congressional Medal of Honor, our nation’s highest award for heroism.  The people who attacked this building, a building where wrongs are righted and disputes are settled according to the rule of law, are not protesting anything; they seek only to disrupt and destroy, and through their acts, they dishonor Private Nakamura’s memory and his extraordinary sacrifice for his country. 

I and my colleagues are reaching out to community leaders with one message: Let’s not let the violence that has marred the Portland protests damage peaceful movements here for a more just society.  These federal agents will join our usual law enforcement staff to safeguard our federal buildings.  My hope is our community will speak with one voice to discourage those who seek to hijack peaceful protests with damage and destruction. “  

WASHINGTON – A Washington tech executive was taken into custody today and charged with fraudulently seeking over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds, announced Acting Assistant Attorney General Brian C. Rabbitt at of the Justice Department’s Criminal Division and U.S. Attorney Brian T. Moran of the U.S. Attorney’s Office for the Western District of Washington.

Mukund Mohan, 48, of Clyde Hill, Washington, was charged by criminal complaint, unsealed today after he was taken into custody, in the Western District of Washington with one count of wire fraud and one count of money laundering.  He is expected to make his initial appearance before U.S. Chief Magistrate Judge Brian A. Tsuchida at 2 p.m. PDT today.

The complaint alleges that Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies to federally insured financial institutions.  The complaint alleges that, in support of the fraudulent loan applications, Mohan made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. 

The complaint also alleges that, in further support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents.  For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc., had dozens of employees and paid millions of dollars in employee wages and payroll taxes.  In support of Mahenjo’s loan application, Mohan submitted incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019.  In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at time he purchased the company, it had no employees and no business activity.  The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake.

The complaint further alleges that Mohan transferred at least $231,000 in fraudulently-obtained loan proceeds to his personal brokerage account for his personal benefit.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

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

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, IRS-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Federal Deposit Insurance Corporation – Office of Inspector General.  Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Friedman of the Western District of Washington are prosecuting the case.

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

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

mohan_complaint.pdf

A Washington tech executive was taken into custody today and charged with fraudulently seeking over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds, announced Acting Assistant Attorney General Brian C. Rabbitt at of the Justice Department’s Criminal Division and U.S. Attorney Brian T. Moran of the U.S. Attorney’s Office for the Western District of Washington.

Mukund Mohan, 48, of Clyde Hill, Washington, was charged by criminal complaint, unsealed today after he was taken into custody, in the Western District of Washington with one count of wire fraud and one count of money laundering.  He is expected to make his initial appearance before U.S. Chief Magistrate Judge Brian A. Tsuchida at 2 p.m. PDT today.

The complaint alleges that Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies to federally insured financial institutions.  The complaint alleges that, in support of the fraudulent loan applications, Mohan made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. 

The complaint also alleges that, in further support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents.  For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc., had dozens of employees and paid millions of dollars in employee wages and payroll taxes.  In support of Mahenjo’s loan application, Mohan submitted incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019.  In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at time he purchased the company, it had no employees and no business activity.  The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake. 

The complaint further alleges that Mohan transferred at least $231,000 in fraudulently-obtained loan proceeds to his personal brokerage account for his personal benefit.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

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

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, IRS-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Federal Deposit Insurance Corporation – Office of Inspector General.  Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Friedman of the Western District of Washington are prosecuting the case.

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

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

Seattle ‑ The U.S. Department of Justice and Sterling Healthcare Opco, LLC d/b/a/Cordant Health Solutions (Cordant), today settled a civil suit alleging Cordant illegally paid kickbacks to generate urine testing business from government insured consumers.  Cordant has agreed to pay various government healthcare programs $11,942,913 to settle the allegations.  Twenty percent of the settlement will go to the relator who first filed a qui tam case regarding the conduct in 2015, alerting the government to the misconduct.

According to the settlement, Cordant paid millions of dollars in remuneration to Northwest Physicians Laboratories, LLC (“NWPL”), and Genesis Marketing Group (“Genesis”) in exchange for referrals of urine drug tests paid for by federal healthcare programs in violation of the Anti-Kickback Statute and the False Claims Act.  The kickbacks were paid to NWPL for claims that were filed between January 1, 2013, and July 31, 2015, and to Genesis from August 7, 2013, through March 31, 2015. 

“This is the largest civil settlement in the illegal kickback scheme involving Northwest Physicians Laboratories,” said First Assistant United States Attorney Tessa G. Gorman.  “The False Claims Act and Anti-Kickback Statute work together to make sure medical providers don’t cut side deals that line their pockets, but fail to provide value for taxpayers.”

The settlement specifically applies to two Cordant operated labs: Regional Toxicology Services LLC d/b/a Sterling Reference Laboratory in Tacoma and Rocky Mountain Tox LLC d/b/a Forensic Laboratories in Denver.

In December 2019, NWPL and three executives were indicted for conspiracy to pay and solicit kickbacks in their dealings with various urine testing labs.  Trial in the criminal case is set for February 1, 2021.  

Payments to local laboratories in exchange for referrals of government insured health care, such as Medicare and TRICARE, violates the Anti-Kickback Statute.  Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services.  The False Claims Act and the Anti-Kickback Statute function, in part, to discourage such behavior.

“The questionable business practices and unnecessary medical testing revealed in this matter only served to improve financial gain and not the patients' well-being,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office.  “This settlement outcome is but one example of DCIS's on-going commitment to working with its law enforcement partners to protect the integrity of federal healthcare programs, especially the Department of Defense's TRICARE program.”

“The government alleged that the Cordant organization paid millions of dollars to buy referrals at the expense of the nation’s taxpayers.  By working with our law enforcement partners, we are able to root out kickback schemes that defraud the government,” said Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “We will remain vigilant in guarding the integrity of our healthcare programs.”  

As part of the settlement, Cordant does not admit any wrongdoing.  Cordant agrees to cooperate fully in the government investigation.  Cordant also entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG).  The CIA promotes compliance with the statutes, regulations, program requirements, and written directives of Medicare and all other federal health care programs.  Among other things, the CIA requires that for the next five years Cordant must retain an Independent Review Organization to monitor its arrangements with other individuals and entities, and it requires that Cordant routinely report to the OIG.

In addition to the U.S. Attorney’s Office, this matter was investigated by the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Defense Health Agency of the U.S. Department of Defense, and the FBI.  Assistant United States Attorney Kayla Stahman negotiated the settlement for the U.S. Attorney’s Office.

Seattle — A citizen of the United Kingdom, who most recently resided in Nevada, was sentencing today in U.S. District Court in Seattle to 42 months in prison for Engaging in Illicit Sexual Conduct in a Foreign Place.  JOSEPH LAWSON SCOTT, 35, cultivated a friendship with a woman he met in an online gaming community, and groomed her teen-age daughter for sexual abuse.  In April 2018, SCOTT visited the family in Canada and sexually assaulted the girl.  At the sentencing hearing, U.S. District Judge James L. Robart called the crime “abhorrent” and “deeply troubling.”

According to records filed in the case, SCOTT was arrested in Nevada where he worked as a bail bondsman in November 2019.  He was indicted for four counts of Engaging in Illicit Sexual Conduct in a Foreign Place.  SCOTT pleaded guilty to one count of the indictment in January 2020.

SCOTT will likely be deported following his prison term.  However, should he be allowed to remain in the United States, the Court ordered 10 years of supervised release to follow his incarceration.

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 United States Attorneys’ Offices and the Criminal Division'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 via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc

The case was investigated by Homeland Security Investigations (HSI) and the Royal Canadian Mounted Police (RCMP).

The case was prosecuted by Assistant United States Attorney Matthew Hampton.

Seattle – A former Seattle resident, who most recently resided in Tacoma, was arrested July 14, 2020, on a federal arson charge for setting fire to the outside of the Seattle Police East Precinct during the occupied protest known as ‘CHOP’, announced U.S. Attorney Brian T. Moran.  ISAIAH THOMAS WILLOUGHBY, 35, will make his initial appearance in U.S. District Court in Seattle at 2:30 p.m. today.

“This is the third case we have charged federally for the criminal acts that tainted otherwise peaceful protests.  Other crimes remain under investigation and may result in additional federal charges,” said U.S. Attorney Brian T. Moran.  “Those who worked to turn protests into riots will not escape accountability for their criminal conduct.” 

According to the criminal complaint, in the early morning hours of June 12, 2020, a person in distinctive clothing was captured on surveillance video near debris piled next to the wall of the Seattle Police East Precinct.  In the video, the suspect appears to use a small can, similar to a gas can, to pour a liquid on the debris.  The suspect steps out of frame, then appears to return with something that he lights on fire and tosses on the debris pile.  The pile begins to burn, and the suspect walks away.  The fire scorched the side of the building, but was extinguished by those nearby using fire extinguishers, and pulling the flaming debris from the building. 

After the Seattle Police Department released pictures of the arson suspect, various people recognized him as WILLOUGHBY and noted that the distinctive sweatshirt came from a clothing line he represents.  Relatives of WILLOUGHBY reported to police that he was in Seattle in the Capitol Hill Organized Protest Zone (CHOP) at the time of the fire.  Following the fire, WILLOUGHBY took steps to remove posts from his social media accounts that may have linked him to the arson.  However, at least some of his FaceBook posts remain, noting his anger at police and his knowledge of the East Precinct building. 

WILLOUGHBY was originally arrested and charged in state court.  WILLOUGHBY was arrested last night without incident at a Seattle residence.

“We support every American’s right to protest,” said ATF Seattle Field Division Acting Special Agent in Charge Mickey French.  “But when someone turns to an act of violence, putting many lives in danger, ATF will work to ensure he or she is held accountable.”

“This defendant’s actions are another example, seen many times around the country, where recent peaceful protests and their message, were overshadowed by violence. In this case, he will have to answer for it,” said Raymond Duda, Special Agent in Charge, FBI Seattle.

The U.S. Attorney’s Office has charged two other defendants with crimes related to the civil unrest in May and June 2020.  Margaret Aislinn Channon is charged with five counts of arson for setting police vehicles on fire the evening of May 30, 2020.  Devinare Antwan Parker is charged with possession of an improvised destructive device for the improvised firearm he brought to a protest on May 31, 2020.

Arson is punishable by a mandatory minimum 5 years in prison and up to 20 years in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the FBI and the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorney Todd Greenberg.

 

Seattle - A repeat offender who got into a fight with a man in North Seattle made his initial appearance today on a federal charge of being a felon in possession of a firearm, announced U.S. Attorney Brian T. Moran.  CHRISTOPHER TOLLIVER, 46, was transferred to federal custody today following his arrest by Seattle Police on April 7, 2020.

According to a criminal complaint filed in the case, Seattle Police were called to the scene of a fight in the 9700 block of Woodlawn Avenue North.  Witnesses reported seeing two men in an argument, with one holding a baseball bat.  Police located the person with the bat, who said items had been stolen from his car the night before, and he identified TOLLIVER as the person who had stolen them.  The man had confronted TOLLIVER about the theft and had carried the bat because he believed TOLLIVER carried a shotgun.

TOLLIVER had left the area on a scooter, but was quickly located by police.  Nearby they found various bags matching the description of the bags that witnesses had seen in TOLLIVER’s possession at the scene of the altercation, including a backpack with a loaded, sawed-off shotgun inside. 

TOLLIVER has multiple prior felony convictions from King County Superior Court, including a 2001 Manslaughter conviction, a 2011 drug conviction, and a 1995 conviction for assault with a deadly weapon.  TOLLIVER is therefore prohibited from possessing firearms.

Being a felon in possession of a firearm is punishable by up to ten years in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence and enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes.  Project Guardian ensures that federal resources are directed at the criminals posing the greatest threat to our communities.  More information about Project Guardian is here.

The case is being investigated by the Seattle Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).  The case is being prosecuted by Assistant United States Attorney Tobias Tobler.

tolliver_complaint.pdf

Seattle – An indictment was unsealed today in the Western District of Washington charging a citizen of Kazakhstan, ANDREY TURCHIN, a/k/a “fxmsp,” 37, with various federal crimes related to a prolific, financially motivated cybercrime group that hacked the computer networks of a broad array of corporate entities, educational institutions, and governments throughout the world, announced U.S. Attorney Brian T. Moran.  The “fxmsp” group established persistent access, or “backdoors,” to victim networks, which they then advertised and sold to other cybercriminals subjecting victims to a variety of cyberattacks and fraud. 

“Cybercrime knows no international borders, and stopping these crimes requires cooperation between an array of international partners.  I commend Kazakhstan for its assistance in this investigation,” said U.S. Attorney Brian T. Moran.  “I am hopeful these critical international partnerships between cybercrime investigators will lead to holding Andrey Turchin accountable in a court of law.”

“Sophisticated cybercrimes can be extremely difficult to investigate.  However, by working closely with our international law enforcement partners at the UK's National Crime Agency, along with victims, private sector security researchers and great cooperation from our international law enforcement partners in Kazakhstan, the FBI was able to disrupt Mr. Turchin and his alleged co-conspirator's criminal intrusions,” said Raymond Duda, Special Agent in Charge FBI Seattle Field Office.  “This case demonstrates the FBI's commitment to uncover and counter cyber criminals, domestic or abroad.”

According to the five-count indictment and records on file, from at least October 2017 through the date charges were returned by a Grand Jury, in December 2018, TURCHIN and his accomplices perpetrated an ambitious hacking enterprise broadly targeting hundreds of victims across six continents, including more than 30 in the United States.  Widely known in hacking circles by the moniker “fxmsp,” TURCHIN employed a collection of hacking techniques and malicious software (malware) to gain and maintain access to victim networks.  For instance, he often used specially designed code to scan the Internet for open Remote Desktop Protocol (RDP) ports and conduct brute-force attacks to initially compromise victim networks.  Once inside the victim’s system, he moved laterally throughout the network and deployed additional malicious code to locate and steal administrative credentials and establish persistent access.  The conspirators often modified antivirus software settings to allow malware to continue to run undetected.

TURCHIN and his co-conspirators then marketed and sold the network access on various underground forums commonly frequented by hackers and cybercriminals, such as Exploit.in, fuckav.ru, Club2Card, Altenen, Blackhacker, Omerta, Sniff3r, and L33t, among others.  Prices typically ranged from a couple thousand dollars to, in some cases, over a hundred thousand dollars, depending on the victim and the degree of system access and controls.  Many transactions occurred through use of a broker and escrow, which allowed interested buyers to sample the network access for a limited period to test the quality and reliability of the illicit access.  As has been publicly reported, the “fxmsp” group has been linked to numerous high-profile data breaches, ransomware attacks, and other cyber intrusions.

TURCHIN is charged with conspiracy to commit computer hacking, two counts of computer fraud and abuse (hacking), conspiracy to commit wire fraud, and access device fraud.  Conspiracy to commit computer fraud is punishable by up to five years in prison.  The two counts of computer fraud and abuse (hacking) are punishable by up to ten and five years in prison, respectively.  Conspiracy to commit wire fraud is punishable by up to 20 years in prison.  Access device fraud is punishable by up to ten years in prison. 

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the FBI Seattle Office, Cyber Crime Task Force, with the cooperation of the United Kingdom’s National Crime Agency (NCA), and with assistance from the U.S. Department of Justice’s Criminal Division’s Office of International Affairs, the FBI Legal Attaché Offices in London and Nur-sultan, and the National Security Committee of the Republic of Kazakhstan (KNB).

The case is being prosecuted by Assistant United States Attorney Steven Masada.

turchin_indictment.pdf

WASHINGTON – A Seattle doctor was taken into custody today on allegations that he fraudulently sought over $3 million in Paycheck Protection Program (PPP) loans.

Dr. Eric R. Shibley, 41, of Seattle, Washington, was charged by criminal complaint, unsealed today upon his arrest, in the Western District of Washington with one count of wire fraud and one count of bank fraud.  He is expected to make his initial appearance before U.S. Magistrate Judge Michelle L. Peterson at 2 p.m. PDT today.

The complaint alleges that Shibley submitted several fraudulent PPP loan applications to federally insured financial institutions, other U.S. Small Business Administration (SBA)-approved lenders, and the SBA in the names of businesses with no actual operations or by misrepresenting the business’s eligibility.  In the applications, Shibley allegedly misrepresented the number of employees and payroll expenses in several applications and concealed his own criminal history.  To support the fraudulent applications, the complaint alleges that Shibley submitted fake tax documents and the names of purported employees who did not, in fact, work for the businesses for which Shibley claimed they worked.  The complaint alleges that Shibley fraudulently sought over $3 million in PPP loans.

The CARES Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

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

This case was investigated by the U.S. SBA’s Office of Inspector General (OIG), the FBI, the Federal Deposit Insurance Corporation OIG, the U.S. Treasury Inspector General for Tax Administration, IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement, and the Department of Health and Human Services OIG.  Trial Attorneys Laura Connelly and Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner of the Western District of Washington are prosecuting the case.

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

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

 

shibley_complaint.pdf

A Seattle doctor was taken into custody today on allegations that he fraudulently sought over $3 million in Paycheck Protection Program (PPP) loans.

Dr. Eric R. Shibley, 41, of Seattle, Washington, was charged by criminal complaint, unsealed today upon his arrest, in the Western District of Washington with one count of wire fraud and one count of bank fraud.  He is expected to make his initial appearance before U.S. Magistrate Judge Michelle L. Peterson at 2 p.m. PDT today.

The complaint alleges that Shibley submitted several fraudulent PPP loan applications to federally insured financial institutions, other U.S. Small Business Administration (SBA)-approved lenders, and the SBA in the names of businesses with no actual operations or by misrepresenting the business’s eligibility.  In the applications, Shibley allegedly misrepresented the number of employees and payroll expenses in several applications and concealed his own criminal history.  To support the fraudulent applications, the complaint alleges that Shibley submitted fake tax documents and the names of purported employees who did not, in fact, work for the businesses for which Shibley claimed they worked.  The complaint alleges that Shibley fraudulently sought over $3 million in PPP loans.

The CARES Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

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

This case was investigated by the U.S. SBA’s Office of Inspector General (OIG), the FBI, the Federal Deposit Insurance Corporation OIG, the U.S. Treasury Inspector General for Tax Administration, IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement, and the Department of Health and Human Services OIG.  Trial Attorneys Laura Connelly and Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner of the Western District of Washington are prosecuting the case.

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

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

Tacoma – A 34-year-old woman who resides in Hoquiam, Grays Harbor County in Southwest Washington State appeared in U.S. District Court in Tacoma Friday charged with production of child pornography, announced U.S. Attorney Brian T. Moran.  TAMARA STANLEY was arrested without incident on June 25, 2020, and remains detained at the Federal Detention Center at SeaTac.

According to the criminal complaint, investigators obtained a judicially authorized search warrant for STANLEY’s email account.  A review of the account revealed sexually explicit images STANLEY had created of a young child.   

Production of child pornography is punishable by a mandatory minimum 15 years in prison and up to 30 years in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

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 United States Attorneys’ Offices and the Criminal Division'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 via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc

The case is being investigated by the FBI with assistance from the Airway Heights and Hoquiam Police Departments.

The case is being prosecuted by Assistant United States Attorney Matthew Hampton.

Tacoma - A 53-year-old Port Orchard, Washington, woman was charged today in U.S. District Court in Tacoma with wire fraud for her scheme to embezzle from a company she started and then sold to a Texas firm, announced U.S. Attorney Brian T. Moran.  JULIE SUE DORAN is alleged to have transferred illegally nearly $725,000 from company accounts for her own expenses, including the purchase of property in Aruba.  DORAN is scheduled to make her initial appearance in U.S. District Court in Tacoma on July 6, 2020.

According to records filed in the case, DORAN was the major shareholder and CEO of My YearLook, Inc., a start-up business that was designing a web portal to collect, store, and share school yearbooks in digital form.  In February 2015, a Texas company, American Achievement Group Holding Corporation (“AAC”) purchased a majority stake in My YearLook by paying approximately $1.3 million into company accounts.  The purchase agreement specified that the money was to be used to grow the company.  DORAN was retained as the CEO at an annual salary of $160,000. 

Within days of the Texas company transferring the money to the My YearLook accounts, DORAN began transferring the money into accounts she controlled and used it for her personal expenses such as payments to a horse training and boarding facility, purchase of a motorcycle and a recreational vehicle, and purchase of a property in Aruba.  DORAN altered some of the transfer records to hide the embezzlement from the financial staff at the Texas parent company.  The scheme unraveled in November 2015 when the financial team in Texas realized DORAN had multiple bank accounts and had falsified bank statements and records.  She was fired in February 2016, and the parent company recovered the last $240,000 in the My YearLook accounts.

Wire fraud is punishable by up to 20 years in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the FBI. The case is being prosecuted by Assistant United States Attorney André M. Peñalver.

doran_complaint_filed.pdf

Seattle - A 61-year-old Issaquah, Washington, man pleaded guilty today in U.S. District Court in Seattle to possession of child pornography, announced U.S. Attorney Brian T. Moran.  PHILIP B. GILBERT, who was employed in the IT department of the Archdiocese of Seattle, was arrested on state charges in May 2019.  He was charged federally in October 2019.  GILBERT faces up to 20 years in prison when sentenced by Chief U.S. District Judge Ricardo S. Martinez on September 25, 2020.

According to the plea agreement, in January 2019 an electronic service provider reported GILBERT’s account to the National Center for Missing and Exploited Children (NCMEC) for uploading images of child rape and molestation.  After obtaining a court-authorized search warrant, law enforcement served the warrant at GILBERT’s residence and seized electronic devices.  The devices contained 256 images of child pornography. 

Following GILBERT’s arrest, a victim came forward to law enforcement and reported GILBERT molested her.  Contra Costa County, California, has charged the defendant with multiple sexual abuse crimes against a minor for which he faces life in prison.  Following his federal sentence he will be transferred to California to resolve those charges. 

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 United States Attorneys’ Offices and the Criminal Division'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 via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc

The case was investigated by the King County Sheriff’s Office in subsequent collaboration with Homeland Security Investigations.

The case is being prosecuted by Assistant United States Attorney Cecelia Gregson.

Seattle - A 41- year-old Bonney Lake, Washington, man was charged today in U.S. District Court in Seattle with theft of government property for his scheme to profit by stealing and selling respiratory support equipment from the Veterans Affairs Medical Center (VAMC), announced U.S. Attorney Brian T. Moran.  GENE WAMSLEY was employed as a Respiratory Therapist at VAMC until he was placed on leave from VAMC on June 9, 2020.  WAMSLEY made his initial appearance on the criminal complaint today in Seattle.

“Right now respiratory support equipment is critical in medical care for those suffering with COVID-19 infections.  To steal and sell equipment needed to care for our veterans is a shocking betrayal,” said U.S. Attorney Brian T. Moran. 

According to the criminal complaint, the investigation began in January 2020 when VAMC reported two bronchoscopes missing from the hospital.  A third bronchoscope was reported missing in April 2020.  Staff at the VAMC had noticed bronchoscopes listed for sale on eBay from a seller in Bonney Lake, Washington.  The investigation linked the sale of three bronchoscopes to WAMSLEY.  A further review of eBay records revealed WAMSLEY had sold five ventilators in March and April 2020.  Three ventilators were found to be missing from VMAC during the same time period.  EBay records reveal a variety of other respiratory support equipment sold by the account linked to WAMSLEY.  Administrators at VAMC confirmed the items were used in the respiratory therapy department.

Law enforcement executed a court authorized search warrant at WAMSLEY’s home on June 9, 2020.  Medical supplies and eBay sales records were seized in the search.

The charges contained in the criminal complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

Theft of government property is punishable by up to ten years in prison.

The case is being investigated by the Veterans Affairs Office of Inspector General (VA-OIG).  The case is being prosecuted by Assistant United States Attorney Cecelia Gregson.

wamsley_complaint.pdf

 

Seattle - The U.S. Department of Justice and the City of Aberdeen, Washington, today reached a settlement regarding areas of the city that were found to be non-compliant with the Americans with Disabilities Act (ADA), announced U.S. Attorney Brian T. Moran.  The areas of non-compliance came to light in 2019 when an Aberdeen resident who has impaired sight filed a complaint regarding obstacles on city sidewalks.  An investigation by the U.S. Attorney’s Office confirmed the obstructions, and the city has agreed to make changes--either removing the obstacles or creating barriers that will allow a person who is visually impaired to be aware of the obstacle by use of a cane.

“I’m pleased the City of Aberdeen is working quickly to make these modifications to ensure that their streets and sidewalks are accessible for all,” said U.S. Attorney Moran.  “Our ability to enforce the ADA is greatly served when members of our community alert us to areas of non-compliance. This complainant helped further accessibility by alerting the city and our office to obstacles that may pass unnoticed for sighted residents, but can badly injure those with visual impairments.”

According to the settlement, at five different intersections, the light poles on the streets contain boxes that protrude more than 12 inches into the circulation path at the intersection.  Because the boxes stick out so far from the pole, a person using a cane to navigate could walk right into the metal box.  The city is placing low-hanging barriers around the boxes so that canes will register the obstacle.

In four other locations, tree limbs overhang city streets below the 80-inch height minimum set by the ADA.  The city will be trimming those trees so that the branches will no longer be an obstacle for those who may not be able to see them as they walk down the street.

Under the terms of the settlement, the City of Aberdeen will make all the modifications by August 1, 2020, and will report back to the U.S. Attorney’s Office on the work.  If there are no other issues of ADA non-compliance over the next year, the U.S. Attorney’s Office will close the file.

The case was handled by Assistant United States Attorney Christina Fogg.

usao_ada_investigation_settlement_agreement_06.15.2020.pdf

The Department of Justice announced today that Bradken Inc. (Bradken) has paid $10,896,924 to resolve allegations that Bradken produced and sold substandard steel components for installation on U.S. Navy vessels.  The United States alleged that a Bradken employee knowingly falsified test results to conceal the fact that the components did not meet the Navy’s specifications.  

“When government contractors supply our armed forces with equipment that fails to meet performance standards, they not only cheat taxpayers, they also potentially put our service members at risk,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division.  “Today’s settlement demonstrates our commitment to ensuring the military receives products that enable it to perform its critical mission.”

Bradken, which operates a foundry in Tacoma, Washington, is a Delaware corporation with its principal place of business in Kansas City, Missouri, operating as a wholly owned subsidiary of Bradken Ltd. of Newcastle, Australia.  Since the 1980s, Bradken has produced steel parts used by other contractors to build vessels for the United States Navy.  The Navy’s contracts expressly required parts made of specified grades of high yield steel.

The settlement announced today resolves allegations that some of the steel Bradken produced did not conform to the Navy’s specifications.  The United States alleged that a former Bradken metallurgist altered the results of tests designed to ensure that the parts met the specifications for high yield steel, and Bradken’s internal controls were inadequate to identify the hundreds of falsified test results.  The United States further contended that Bradken invoiced shipbuilders for the steel parts as if they were made to the demanding military specification when they were not, causing the shipbuilders to invoice the Navy for defective parts.

“This settlement demonstrates the commitment of the Naval Criminal Investigative Service (NCIS) and our law enforcement partners to hold companies accountable for supplying substandard products, especially products that could impact the Department of the Navy’s (DON) war fighting ability and battlefield superiority, and the safety of our Sailors and Marines,” said Charles P. King, Special Agent in Charge, NCIS Northwest Field Office.  “NCIS will continue to work diligently with our law enforcement partners to safeguard DON major acquisition programs.  The success of the DON’s war fighting ability is dependent upon a sound and reliable acquisition process.”

“The announced settlement is representative of the law enforcement community's relentless efforts to hold accountable those who engage in unethical business practices that endanger America's warfighters, corrupts the defense procurement process, and inexcusably wastes taxpayer dollars,” said Bryan Denny, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS), Western Field Office.  “This case clearly demonstrates that unscrupulous actions by government contractors and subcontractors will be investigated by DCIS and its law enforcement partners.”

This civil settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Washington, DCIS, NCIS, and the Defense Contract Audit Agency.  

In addition to the civil settlement, U.S. Attorney Brian T. Moran for the Western District of Washington announced that the United States has filed a criminal charge against Bradken for committing the crime of major fraud against the United States.  The United States and Bradken have also entered into a Deferred Prosecution Agreement (DPA) in which Bradken admitted the government’s allegations and agreed to take certain remedial actions.  If Bradken complies with all of the DPA’s requirements, the government will dismiss the criminal charge after three years. 

Except to the extent admitted as part of the DPA, the claims resolved by the civil settlement are allegations only.  There has been no determination of liability in the civil case.

Seattle – The Department of Justice announced today that Bradken Inc. (Bradken), a subsidiary of Hitachi Construction Machinery, has paid $10,896,924 to resolve allegations that Bradken produced and sold substandard steel components for installation on U.S. Navy submarines, announced Assistant Attorney General of the Justice Department’s Civil Division Jody H. Hunt and U.S. Attorney Brian T. Moran for the Western District of Washington.  Bradken and Bradken’s former lab director have also been charged criminally. 

The United States Attorney’s Office filed a criminal complaint charging Elaine Thomas, Bradken’s former Director of Metallurgy, with Major Fraud Against the United States.  Thomas will make her initial appearance in federal court in Tacoma on June 30, 2020.  Also today, the United States Attorney’s Office for the Western District of Washington filed a criminal information charging Bradken with Major Fraud Against the United States.  Under a deferred prosecution agreement, Bradken has accepted responsibility for the offense and has agreed to take remedial measures.  If Bradken complies with the agreement, the government will dismiss the charge after three years.  

According to the court filings, Bradken is the U.S. Navy’s leading supplier of high-yield steel for naval submarines.  Bradken’s Tacoma foundry produces castings that prime contractors use to fabricate submarine hulls.  The Navy requires that the steel meets certain standards for strength and toughness to ensure that it does not fail under certain circumstances, such as a collision.  The court filings allege that, for 30 years, the Tacoma foundry (which was acquired by Bradken in 2008), produced castings that had failed lab tests and did not meet the Navy’s standards.  The filings allege that Elaine Thomas, as Director of Metallurgy, falsified test results to hide the fact that the steel had failed the tests.  Thomas falsified results for over 200 productions of steel, which represent a substantial percentage of the castings Bradken produced for the Navy.  As part of the deferred prosecution agreement, Bradken admitted these allegations. 

The court filings state there is no evidence that Bradken’s management was aware of the fraud until May 2017.  At that time, a lab employee discovered that test cards had been altered and that other discrepancies existed in Bradken’s records.  While Bradken initially disclosed these findings to the Navy, it then made misleading statements suggesting that the discrepancies were not the result of fraud.  Bradken admits that these misleading statements hindered the Navy’s investigation and its efforts to remediate the risks presented by Bradken’s fraud. 

The civil settlement resolves allegations that some of the castings Bradken produced did not conform to the Navy’s specifications.  In addition to the allegations concerning the altered test results, the United States contended that Bradken invoiced shipbuilders for the parts as if they were made to the demanding military specification when they were not, causing the shipbuilders to invoice the Navy for parts that did not meet specifications.

“Bradken placed the Navy’s sailors and its operations at risk.  Further, after Bradken’s management discovered the falsified data, they misled the Navy about the scope and nature of the fraud.  Government contractors must not tolerate fraud within their organizations, and they must be fully forthcoming with the government when they discover it,” said U.S. Attorney Brian T. Moran.  “The Navy has taken extensive steps to ensure the safe operation of the affected submarines.  Those measures will result in increased costs and maintenance.  Our agreement with the company is aimed at ensuring they improve their procedures and inform their peer companies about how their systems failed to detect the fraud.  We hope such steps will improve the military procurement system.” 

Secretary of the Navy Kenneth J. Braithwaite stated that “U.S. Navy suppliers must meet the very highest standards of quality.  Our Sailors and Marines depend upon them to provide the very best equipment thereby enabling the Navy to meet world-wide commitments.  While the Navy remains dedicated to maintaining and revitalizing our industrial base, we will aggressively investigate and pursue all possible recoveries from suppliers who do not meet standards.”

The deferred prosecution agreement describes substantial steps taken by Bradken to cooperate with the government’s investigation and overhaul to its quality control and compliance procedures.  These steps include entering into a compliance agreement with the Navy, creating new positions devoted to oversight of lab testing and tracking, creating an audit and risk committee to oversee the compliance issues, and implementing of a new lab information system with anti-fraud controls.  The company will also publish a detailed account of its missteps in the Casteel Reporter, a trade publication, to educate other government contractors.  In addition, Bradken has made changes to the management team in place at the Tacoma Foundry.  If Bradken complies with all of the deferred prosecution agreement’s requirements, the government will dismiss the charge after three years. 

Bradken is a Delaware corporation with its principal place of business in Kansas City, Missouri, operating as a wholly owned subsidiary of Bradken Ltd. of Newcastle, Australia, which is a subsidiary of Hitachi Construction Machinery.  Elaine Thomas, 66, is a resident of Auburn, Washington. 

The charges contained in the complaint against Thomas are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

“This settlement demonstrates the commitment of the Naval Criminal Investigative Service (NCIS) and our law enforcement partners to hold companies accountable for supplying substandard products, especially products that could impact the Department of Navy (DON) war fighting ability, battlefield superiority and the safety of our Sailors and Marines. NCIS will continue to work diligently with our law enforcement partners to safeguard DON major acquisition programs. The success of the DON war fighting ability is dependent upon a sound and reliable acquisition process” said Charles P. King, Special Agent in Charge, NCIS Northwest Field Office. 

“The announced settlement is representative of the law enforcement community's relentless efforts to hold accountable those who engage in unethical business practices that endanger America's warfighters, corrupts the defense procurement process, and inexcusably wastes taxpayer dollars,” said Bryan Denny, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS), Western Field Office.  “This case clearly demonstrates that any unscrupulous actions by government contractors and subcontractors will be reviewed and, if appropriate, vigorously investigated by DCIS and its law enforcement partners.”

The civil settlement, deferred prosecution agreement with Bradken, and pending criminal case against Thomas are the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Washington, the Department of Defense’s Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency. 

The cases are being handled by Assistant United States Attorneys Kayla Stahman, Seth Wilkinson, and David Reese Jennings for the U.S. Attorney’s Office, Western District of Washington, and Art Coulter of DOJ’s Civil Division Commercial Litigation Branch.

bradken_information.pdf bradken_signed_civil_settlement.pdf bradken_dpa.pdf thomas_elaine_m_complaint.pdf

Seattle – A 67-year-old Seattle man pleaded guilty today in U.S. District Court in Seattle to being a felon in possession of a firearm, announced U.S. Attorney Brian T. Moran.  PARK QUAN was arrested July 29, 2019, after FBI agents investigating one of his roommates in connection with a data theft served a search warrant on his home and discovered a cache of weapons.  QUAN has remained in custody since his arrest.  Prosecutors and defense attorneys will recommend a four-year prison sentenced when QUAN is sentenced by U.S. District Judge John C. Coughenour on September 8, 2020.

According to records filed in the case, agents investigating the data theft were sweeping the residence for safety when they observed numerous firearms in a bedroom used by QUAN.  Agents applied for and got a second judicially-authorized search warrant and began collecting the firearms.  The cache of weapons included four semi-automatic handguns, six semi-automatic rifles, two of them assault rifles, and two additional rifles.  At least one of the semi-automatic rifles was loaded.  Law enforcement also seized a variety of ammunition, high-capacity magazines, flare launchers, some containers of explosive powder, and two bump stocks, which QUAN claimed to have purchased before the devices were outlawed.

QUAN has a 1983 federal conviction in Washington for being a felon in possession of explosives and a 1991 federal conviction in Texas for possessing an unregistered machine gun.  QUAN also has a military court-martial conviction for soliciting the theft of military weapons.  Due to those convictions, QUAN is prohibited from possessing firearms.

The case is being investigated by the FBI with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).  The case is being prosecuted by Assistant United States Attorneys Steven Masada and Andrew Friedman.

Seattle—The U.S. Attorney’s Office Western District of Washington and the U.S. Department Justice today filed a statement of interest in Roque v. Seattle Housing Authority (SHA) as part of DOJ’s work to safeguard the civil rights of all Americans, announced  U.S. Attorney Brian T. Moran.  The suit arises out of the efforts of a resident of Raven Terrace in the Yesler Terrace area of Seattle to obtain parking garage access for his caregiver.  The plaintiff, Tony Roque, has quadriplegia and requires caregiver assistance for his daily activities.  Mr. Roque filed suit against the Seattle Housing Authority after it refused his request to modify its policies and allow his caregiver parking access in the building’s garage.

“With this filing DOJ is making clear what we believe to be the state of the law – the Fair Housing Act requires modifications to housing complex policies when modifications are necessary to afford a resident with a disability with equal access to the enjoyment of his or her home.  That is true even when the accommodation relates to caregiver access, ” said U.S. Attorney Moran.  “Safeguarding the rights of people with disabilities is even more important during this period of COVID-19, when the isolation and risks facing many people with disabilities are heightened.”

According to records filed in the case and the government’s statement of interest, Mr. Roque alleges that he needs caregiver assistance for the necessities of daily life – eating, dressing, administering medication, etc.  Due to covid-19, the number of caregivers accessing his apartment has been reduced to one.  That caregiver had been parking in the garage of Raven Terrace from 2018 until early March 2020 so that she could deliver Mr. Roque’s groceries and medical supplies and transport him to medical appointments, etc.  On March 4, 2020, the Housing Authority had the caregiver’s car towed saying that since she was not a resident nor an employee she was not allowed to park in the building.  When Mr. Roque requested a parking pass for the caregiver, his request was denied.  The Seattle Housing Authority claimed that since the caregiver is not disabled, and the parking space was for the caregiver, it is not required to grant the accommodation.

In its statement of interest, DOJ states that under the FHA, a parking space for a caregiver of a resident with a disability may be a “necessary” accommodation under certain circumstances. Further under the ADA, a reasonable accommodation may not be denied solely because it would provide Mr. Roque with a benefit not available to other residents.

U.S. District Judge Richard A. Jones issued a temporary restraining order on May 4, 2020, prohibiting the Seattle Housing Authority from towing the caregiver’s car.  Judge Jones can make the order permanent, depending on the decision made by the Seattle Housing Authority on Mr. Roque’s appeal.  

The statement of interest was filed by Assistant United States Attorney Christina Fogg, the Civil Rights Coordinator in the Western District of Washington, and by Trial Attorney Max Lapertosa of the DOJ Civil Rights Division. 

statement_of_interest_of_usa_roque_v_seattle_hous_auth.pdf

WASHINGTON - The Department of Justice today filed a statement of interest in a Washington State federal court supporting the First Amendment religious freedom claims of a Pierce County church, explaining how a recent Supreme Court decision, South Bay United Pentecostal Church v. Newsom (May 29, 2020), supports the church’s claim. 

The statement of interest explains that Washington’s preferable treatment of secular gatherings such as restaurants, taverns, and outdoor protests compared to the restrictions imposed on indoor and outdoor religious services triggers heightened scrutiny under the Constitution.

The statement of interest is part of Attorney General William P. Barr's April 27, 2020 initiative directing Assistant Attorney General for Civil Rights, Eric Dreiband, and the U.S. Attorney for the Eastern District of Michigan, Matthew Schneider, to review state and local policies to ensure that civil liberties are protected during the COVID-19 pandemic. 

“The protections enshrined in the United States Constitution and the Bill of Rights are enduring, and we must be vigilant in making sure that governments do not unlawfully infringe upon the rights that they protect. First among these rights is the First Amendment’s guarantee that no government in this country may prohibit the free exercise of religion,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Constitution’s protections are especially critical during times of crisis. The United States must remain committed at all times to the right of all people to worship and pray and follow the dictates of their conscience in a manner that respects others and the public health and safety. By doing so, our nation honors the legacy of countless patriots who worked, struggled, fought, suffered, and died to protect our freedom. The Department of Justice will continue its efforts to secure the Constitutional rights of all people in this nation.”

“The department will continue to be vigilant in protecting religious liberty when states and localities exceed constitutional limits,” said Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, who, with Assistant Attorney General Dreiband, is overseeing the Justice Department’s effort to monitor state and local polices relating to the COVID-19 pandemic.

“At a time of uncertainty and anguish in our community, the ability to gather to express one’s faith and seek comfort is a fundamental right,” said U.S. Attorney Brian T. Moran for the Western District of Washington. “Just as we have seen peaceful protestors gathered together and exercising their First Amendment rights, so too must we protect the right of religious institutions such as churches, mosques and temples to gather together and express their faith.”

Two weeks ago, the U.S. Supreme Court issued a ruling regarding California’s reopening plan in South Bay United Pentecostal Church v. Newsom (May 29, 2020).  By a 5-4 vote, the Supreme Court declined to temporarily block California’s rules. In their opinions explaining the result, however, each Justice who wrote agreed that even during the COVID-19 pandemic the Constitution requires states to treat houses of worship equally with comparable secular businesses. Chief Justice Roberts concluded that, on the facts of the California case, California “exempts or treats more leniently only dissimilar activities, such as operating grocery stores, banks, and laundromats, in which people neither congregate in large groups nor remain in close proximity for extended periods.”  He also noted that the “precise question of when restrictions on particular social activities should be lifted during the pandemic is dynamic and fact-intensive matter subject to reasonable disagreement,” which, when within constitutional bounds is entrusted to the “politically accountable officials of the states.” Justices Kavanaugh, Thomas and Gorsuch would have “grant[ed] the Church’s requested [relief] because California’s latest safety guidelines discriminate against places of worship and in favor of comparable secular businesses.” 

In its statement of interest filed today in Haborview Fellowship v. Inslee, the United States explains that the State of Washington “exempts or treats more leniently” precisely the types of activities that Chief Justice Roberts said are appropriate comparators for religious gatherings—specifically, activities that involve people “congregat[ing] in large groups [ ]or remain[ing] in close proximity for extended period,” such as restaurants, taverns, and protests. Because those activities are permitted with social distancing and hygiene measures, the church must be treated the same unless the state can persuasively show that there are material differences between gathering for an extended period in a restaurant or tavern and a house of worship, or between an outdoor protest and an outdoor worship service.

Washington currently permits various restaurants and taverns to operate at 50% of capacity with no total cap on number of patrons, so long as they observe 6-foot social distancing and various hygiene measures.  Places of worship, however, are limited to a hard cap of 50 people or 25% of capacity, whichever is less. Outdoor worship services are limited to 100 people. As detailed in the statement of interest, Governor Inslee has placed no limit on total numbers for outdoor protests, only requesting that participants  “be safe for themselves and the people around them” by “wearing a mask and . . . distancing as much as you can.”

statement_of_interest.pdf

The Department of Justice today filed a statement of interest in a Washington State federal court supporting the First Amendment religious freedom claims of a Pierce County church, explaining how a recent Supreme Court decision, South Bay United Pentecostal Church v. Newsom (May 29, 2020), supports the church’s claim. 

The statement of interest explains that Washington’s preferable treatment of secular gatherings such as restaurants, taverns, and outdoor protests compared to the restrictions imposed on indoor and outdoor religious services triggers heightened scrutiny under the Constitution.

The statement of interest is part of Attorney General William P. Barr's April 27, 2020 initiative directing Assistant Attorney General for Civil Rights, Eric Dreiband, and the U.S. Attorney for the Eastern District of Michigan, Matthew Schneider, to review state and local policies to ensure that civil liberties are protected during the COVID-19 pandemic. 

“The protections enshrined in the United States Constitution and the Bill of Rights are enduring, and we must be vigilant in making sure that governments do not unlawfully infringe upon the rights that they protect. First among these rights is the First Amendment’s guarantee that no government in this country may prohibit the free exercise of religion,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Constitution’s protections are especially critical during times of crisis. The United States must remain committed at all times to the right of all people to worship and pray and follow the dictates of their conscience in a manner that respects others and the public health and safety. By doing so, our nation honors the legacy of countless patriots who worked, struggled, fought, suffered, and died to protect our freedom. The Department of Justice will continue its efforts to secure the Constitutional rights of all people in this nation.”

“The department will continue to be vigilant in protecting religious liberty when states and localities exceed constitutional limits,” said Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, who, with Assistant Attorney General Dreiband, is overseeing the Justice Department’s effort to monitor state and local polices relating to the COVID-19 pandemic.

“At a time of uncertainty and anguish in our community, the ability to gather to express one’s faith and seek comfort is a fundamental right,” said U.S. Attorney Brian T. Moran for the Western District of Washington. “Just as we have seen peaceful protestors gathered together and exercising their First Amendment rights, so too must we protect the right of religious institutions such as churches, mosques and temples to gather together and express their faith.”

Two weeks ago, the U.S. Supreme Court issued a ruling regarding California’s reopening plan in South Bay United Pentecostal Church v. Newsom (May 29, 2020).  By a 5-4 vote, the Supreme Court declined to temporarily block California’s rules. In their opinions explaining the result, however, each Justice who wrote agreed that even during the COVID-19 pandemic the Constitution requires states to treat houses of worship equally with comparable secular businesses. Chief Justice Roberts concluded that, on the facts of the California case, California “exempts or treats more leniently only dissimilar activities, such as operating grocery stores, banks, and laundromats, in which people neither congregate in large groups nor remain in close proximity for extended periods.”  He also noted that the “precise question of when restrictions on particular social activities should be lifted during the pandemic is dynamic and fact-intensive matter subject to reasonable disagreement,” which, when within constitutional bounds is entrusted to the “politically accountable officials of the states.” Justices Kavanaugh, Thomas and Gorsuch would have “grant[ed] the Church’s requested [relief] because California’s latest safety guidelines discriminate against places of worship and in favor of comparable secular businesses.” 

In its statement of interest filed today in Haborview Fellowship v. Inslee, the United States explains that the State of Washington “exempts or treats more leniently” precisely the types of activities that Chief Justice Roberts said are appropriate comparators for religious gatherings—specifically, activities that involve people “congregat[ing] in large groups [ ]or remain[ing] in close proximity for extended period,” such as restaurants, taverns, and protests. Because those activities are permitted with social distancing and hygiene measures, the church must be treated the same unless the state can persuasively show that there are material differences between gathering for an extended period in a restaurant or tavern and a house of worship, or between an outdoor protest and an outdoor worship service.

Washington currently permits various restaurants and taverns to operate at 50% of capacity with no total cap on number of patrons, so long as they observe 6-foot social distancing and various hygiene measures.  Places of worship, however, are limited to a hard cap of 50 people or 25% of capacity, whichever is less. Outdoor worship services are limited to 100 people. As detailed in the statement of interest, Governor Inslee has placed no limit on total numbers for outdoor protests, only requesting that participants  “be safe for themselves and the people around them” by “wearing a mask and . . . distancing as much as you can.”

Seattle - A 25-year-old Tacoma, Washington, resident was arrested this morning on five federal counts of arson for burning five Seattle P0lice vehicles parked in the area of Sixth and Pine in downtown Seattle on Saturday, May 30, 2020, announced U.S. Attorney Brian T. Moran.  MARGARET AISLINN CHANNON was taken into custody without incident at her Tacoma residence today.  She will appear on the criminal complaint in U.S. District Court in Seattle at 1:00 p.m. tomorrow, June 12, 2020.

“This defendant was captured by multiple cameras using an accelerant, lit like a blowtorch, to start fires in five vehicles -- putting the public at risk and creating the very real possibility of a structure fire amidst the throng of people protesting downtown,” said U.S. Attorney Moran.  “I commend the painstaking work of law enforcement using a variety of images to identify the defendant and locate her so she can be held accountable.”

According to the criminal complaint, investigators from the FBI, ATF, and Seattle Police Department reviewed various videos taken of the Saturday arsons, as well as videos taken at a protest Friday evening.  CHANNON appears in videos from both days, and tattoos that she has on her hands and arms are clearly visible.  Some of the tattoos link CHANNON to a missing person report in Texas in 2019.  Ultimately, investigators uncovered CHANNON’s various social media accounts which helped confirm her identity.  Investigators determined she had listed addresses first in Seattle and later in Tacoma.

Law enforcement executed a search warrant at CHANNON’s Tacoma residence and confirmed the distinctive tattoos.  They also seized clothing and accessories that appear in some of the videos from the arsons.

“The number one mission of the FBI is to protect the American people and uphold the Constitution of the United States.  The First Amendment guarantees Americans the right to express their opinions and peacefully protest.  What it does not provide is the right to invoke violence under the guise of free speech,” said FBI Special Agent in Charge Raymond Duda of the Seattle Field Office.  “In cooperation with our partners, we will work tirelessly to identify, investigate, and prevent individuals who are inciting violence, and coordinate with the United States Attorney's Office to address any federal violations.”

“ATF is the Federal agency primarily responsible for administering and enforcing the criminal and regulatory provisions of the Federal laws pertaining to arson.  Arson is a crime of violence,” said ATF Acting Special Agent in Charge Jonathan Blais.  “While we stand by every American’s Constitutional right to protest, when someone turns to violence, we will work tirelessly to investigate their crimes.  We are working shoulder-to-shoulder with our local, state and federal partners to bring those responsible for actions such as this to justice.” 

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

Arson is punishable by up to ten years in prison.

The case is being investigated by the FBI, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorney Todd Greenberg.

 

Seattle- A former North Carolina man who struck a Seattle Police Officer with a large can and threatened to kill all police, is now charged federally with possession of a destructive device for the improvised gun he brought to a Seattle protest, announced U.S. Attorney Brian T. Moran.  DEVINARE ANTWAN PARKER, 25, was arrested Sunday evening, May 31, 2020, after he threw a 16-ounce can of beer through the window of a Seattle Police car, striking an officer in the face.  When placed under arrest, PARKER possessed an improvised firearm capable of firing shotgun shells.

“This defendant came to a protest armed with a device that could have proved fatal not only to police, but to peaceful protestors in the area,” said U.S. Attorney Moran.  “We will use our federal authority where appropriate to remove such threats from our community, so that people can safely exercise their constitutional right to protest peacefully and honor the memory of George Floyd.”

PARKER is in state custody and will be scheduled for his first appearance in federal court when the state charges are resolved.

According to the criminal complaint, at about 11:30 p.m. on Sunday evening, May 31, 2020, two Seattle Police Officers were driving their marked patrol car north on Third Avenue near Benaroya Hall when PARKER threw a 16-ounce can of Bud Light Ice through the passenger window striking one of the officers in the face.  PARKER was placed under arrest for third degree assault.  When PARKER was searched, officers found an improvised firearm constructed of two pieces of pipe and a firing pin with a laser pointer/ flashlight attached to the side.  PARKER carried several shotgun shells that fit the device.

As he was being arrested PARKER allegedly shouted at the officers that he brought the weapon to the protest to shoot and kill police officers.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

Possession of a destructive device is punishable by up to ten years in prison.

The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives.

The case is being prosecuted by Assistant United States Attorney Erin H. Becker.

 

Seattle - Two Bellingham, Washington, residents made their initial appearance today in U.S. District Court in Seattle following their arrest on May 28, 2020, for distributing fake oxycodone tablets tainted with fentanyl, announced U.S. Attorney Brian T. Moran.  TROY J. KLANDER, 38, and ZACHARY D. SALAS, 38, are charged with conspiracy to possess fentanyl with intent to distribute.  Both remain in custody following a five-month investigation of their drug trafficking activities.

“These counterfeit oxycodone pills, laced with unknown amounts of fentanyl, have proven deadly in our communities,” said U.S. Attorney Moran.  “I commend the DEA agents and local law enforcement officers who continued this investigation despite the challenges presented by the COVID-19 lockdown.”

According to the criminal complaint filed in the case, law enforcement used confidential sources and undercover officers to purchase the fentanyl laced pills from KLANDER and to identify SALAS as a source of supply.  On May 28, 2020, a Drug Enforcement Administration-led task force executed search warrants at six locations in Whatcom County.  At one location, SALAS refused to co-operate with law enforcement resulting in a one-hour standoff.  The standoff ended peacefully, and SALAS was taken into custody.

“Even with the hurdles presented by the COVID-19 crisis, we were able to investigate and safely remove these suppliers of dangerous counterfeit pills,” said DEA Special Agent in Charge Keith Weis.  “These pills laced with fentanyl can be highly toxic when handled and are indiscriminately killing tens of thousands of people yearly in the U.S.  The identification and disruption of those involved in this illicit distribution chain remains a high priority for law enforcement at every level.”

Over the course of the investigation law enforcement seized 500 counterfeit oxycodone pills tainted with fentanyl, cocaine, heroin, and crystal methamphetamine, as well as a stolen gun and more than $100,000 in cash.

Conspiracy to distribute fentanyl is punishable by up to 20 years in prison.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The investigation is being led by DEA with significant assistance from the Whatcom County Sheriff’s Office Gang and Drug Task Force.  The searches yesterday involved the DEA Seattle Special Response Team (SRT), Whatcom County Sheriff’s Office SWAT, Bellingham Police Department SWAT, Washington State Patrol SWAT, Homeland Security Investigation, Customs and Border Protection Air and Marine Unit, Skagit County Interlocal Drug Enforcement Unit (SCIDEU), and Snohomish Regional Gang Drug Task Force.

The case is being prosecuted by Assistant United States Attorney Seungjae Lee.

us_v._klander_salas.pdf

WASHINGTON – A software engineer was charged in a complaint unsealed today for allegedly filing fraudulent bank loan applications seeking more than $1 million in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Baoke Zhang, 35, of Issaquah, Washington, was charged in a federal criminal complaint filed in the Western District of Washington with wire fraud and bank fraud.  

“The defendant allegedly submitted false documents in a brazen scheme to acquire over 1.5 million dollars in loan funds made available for legitimate businesses adversely affected by COVID-19,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The department and our law enforcement partners will continue to identify and bring to justice those who commit fraud on CARES Act programs.”

“This defendant tried more than once to defraud the Paycheck Protection Program (PPP) – a program designed to keep people working,” said U.S. Attorney Brian T. Moran for the Western District of Washington.  “I am pleased that the systems designed to detect and deny fraudulent payments caught his scheme before federal funds went out the door.”

“SBA OIG applauds due diligence by SBA’s lending partners to maintain the integrity of the lending programs,” said Special Agent in Charge Weston King of the SBA Office of Inspector General (SBA OIG) Western Region.  “Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office in partnership with our law enforcement counterparts.  I want to thank the Justice Department and our law enforcement partners for their dedication and pursuit of justice.”

“In the midst of this pandemic, anyone who attempts to engage in illegal activity will be aggressively pursued,” stated J. Russell George, Treasury Inspector General for Tax Administration (TIGTA).  “Our mission at TIGTA is to protect the integrity of the nation’s system of tax administration.  I appreciate the assistance of the Small Business Administration Office of Inspector General, the Department of Justice, and other law enforcements partners in this effort.”

“This is an example of someone who was attempting to take advantage of a program to help Americans during one the most difficult times in recent memory,” said Special Agent in Charge Raymond Duda of the FBI’s Seattle Field Office.  “We are proud to partner with SBA and TIGTA in ensuring funds provided for programs such as PPP, make it to the people who need it the most.”

Zhang allegedly sought over a million dollars in forgivable loans guaranteed by the SBA from multiple banks by claiming fictitious payroll expenses associated with fictitious information technology companies that he created.  Zhang allegedly provided fraudulent documents to two different lenders in support of applications for loans guaranteed by the SBA for COVID-19 relief through the PPP.  In total, Zhang sought forgivable loans in the amount of $1,525,000.

Allegedly, Zhang provided lenders with fraudulent IRS documentation purporting to show federal tax withholdings for a sole proprietorship in his name for 25 employees.  As part of an effort to show that this business had been operating for several quarters, Zhang allegedly submitted to two lenders documentation purporting to show that, on April 3, 2017, the IRS had assigned an Employer Identification Number (EIN) to his sole proprietorship.  In fact, the IRS assigned the EIN on April 3, 2020, only a week before Zhang submitted his application to the lender.  Zhang allegedly also provided fraudulent IRS documentation purporting to show federal tax withholdings for 20 employees for a limited liability company he created. 

Zhang allegedly provided falsified documentation purporting to show that an EIN for the second company had been assigned in 2018. In fact, the IRS assigned the EIN on April 21, 2020, just two days before Zhang submitted an application for the company to the lender.  Zhang also allegedly provided the lender with a bank statement purporting to show that the company had disbursed payroll payments in December 2019.  In fact, Zhang opened that account in April 2020.  

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll.

A federal criminal complaint is merely an accusation.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Trial Attorney Amanda Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner for the Western District of Washington are prosecuting the case.

The Justice Department acknowledges and thanks the TIGTA, the SBA OIG and the FBI for their efforts investigating this mater.

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

A software engineer was charged in a complaint unsealed today for allegedly filing fraudulent bank loan applications seeking more than $1 million in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Baoke Zhang, 35, of Issaquah, Washington, was charged in a federal criminal complaint filed in the Western District of Washington with wire fraud and bank fraud.  

“The defendant allegedly submitted false documents in a brazen scheme to acquire over 1.5 million dollars in loan funds made available for legitimate businesses adversely affected by COVID-19,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The department and our law enforcement partners will continue to identify and bring to justice those who commit fraud on CARES Act programs.”

“This defendant tried more than once to defraud the Paycheck Protection Program (PPP) – a program designed to keep people working,” said U.S. Attorney Brian T. Moran for the Western District of Washington. “I am pleased that the systems designed to detect and deny fraudulent payments caught his scheme before federal funds went out the door.”

“SBA OIG applauds due diligence by SBA’s lending partners to maintain the integrity of the lending programs,” said Special Agent in Charge Weston King of the SBA Office of Inspector General (SBA OIG) Western Region.  “Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office in partnership with our law enforcement counterparts.  I want to thank the Justice Department and our law enforcement partners for their dedication and pursuit of justice.”

“In the midst of this pandemic, anyone who attempts to engage in illegal activity will be aggressively pursued,” stated J. Russell George, Treasury Inspector General for Tax Administration (TIGTA).  “Our mission at TIGTA is to protect the integrity of the nation’s system of tax administration. I appreciate the assistance of the Small Business Administration Office of Inspector General, the Department of Justice, and other law enforcements partners in this effort.”

“This is an example of someone who was attempting to take advantage of a program to help Americans during one the most difficult times in recent memory,” said Special Agent in Charge Raymond Duda of the FBI’s Seattle Field Office.  “We are proud to partner with SBA and TIGTA in ensuring funds provided for programs such as PPP, make it to the people who need it the most.”

Zhang allegedly sought over a million dollars in forgivable loans guaranteed by the SBA from multiple banks by claiming fictitious payroll expenses associated with fictitious information technology companies that he created.  Zhang allegedly provided fraudulent documents to two different lenders in support of applications for loans guaranteed by the SBA for COVID-19 relief through the PPP.  In total, Zhang sought forgivable loans in the amount of $1,525,000. 

Allegedly, Zhang provided lenders with fraudulent IRS documentation purporting to show federal tax withholdings for a sole proprietorship in his name for 25 employees.  As part of an effort to show that this business had been operating for several quarters, Zhang allegedly submitted to two lenders documentation purporting to show that, on April 3, 2017, the IRS had assigned an Employer Identification Number (EIN) to his sole proprietorship.  In fact, the IRS assigned the EIN on April 3, 2020, only a week before Zhang submitted his application to the lender.  Zhang allegedly also provided fraudulent IRS documentation purporting to show federal tax withholdings for 20 employees for a limited liability company he created. 

Zhang allegedly provided falsified documentation purporting to show that an EIN for the second company had been assigned in 2018.  In fact, the IRS assigned the EIN on April 21, 2020, just two days before Zhang submitted an application for the company to the lender. Zhang also allegedly provided the lender with a bank statement purporting to show that the company had disbursed payroll payments in December 2019.  In fact, Zhang opened that account in April 2020.   

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll. 

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

Trial Attorney Amanda Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner for the Western District of Washington are prosecuting the case.

The Justice Department acknowledges and thanks the TIGTA, the SBA OIG and the FBI for their efforts investigating this matter.

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

Tacoma - Two South King County men have been charged with federal drug crimes in connection with their trafficking in counterfeit pills laced with deadly fentanyl, announced U.S. Attorney Brian T. Moran.  CHASE FRIEDRICH, 28, was arrested April 21, 2020, at his Des Moines, Washington, apartment.  His drug supplier, RAOUL V. NORMANDIA, JR., 28, was arrested April 24, 2020, near his Federal Way, Washington, residence.  FRIEDRICH sold counterfeit Percocet pills to a Navy sailor – that sailor provided them to another sailor who died of a drug overdose.  The pills are presumed to have been tainted with deadly fentanyl. 

The investigation began April 18, 2020, when a Navy sailor was found dead in his workspace aboard a Navy ship.  In his pocket were two counterfeit pills presumed to be laced with fentanyl.  The Naval Criminal Investigative Services (NCIS) were able to identify the sailor who provided the pills to the victim and identified FRIEDRICH as his supplier.  A search of FRIEDRICH’s apartment revealed cocaine, a handgun, and a bag of approximately 100 counterfeit pills.

Investigators were able to trace the pills and cocaine to NORMANDIA.  He was arrested a few blocks from his home.  In the vehicle was cocaine.  During a court‑authorized search of NORMANDIA’s residence, law enforcement recovered firearms, ammunition, body armor, narcotics, and various signs of the drug trade, including scales, baggies, heat sealers, Moneygram receipts, and twenty cell phones.

Both men made their initial appearances and are being held on a federal charge of possession of controlled substances with intent to distribute.

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by NCIS and the Kitsap County Sheriff’s Office as a part of the West Sound Narcotics Enforcement Team (WestNET) and is being prosecuted by Assistant United States Attorney Lyndsie Schmalz.

Seattle— In honor of National Police Week, U.S. Attorney Brian T. Moran is recognizing the service and sacrifice of federal, state, local, and tribal law enforcement.  The week will be observed Sunday, May 10 through Saturday, May 16, 2020.

“There is no more noble profession than serving as a police officer,” said Attorney General William P. Barr.  “The men and women who protect our communities each day have not just devoted their lives to public service, they’ve taken an oath to give their lives in order to ensure our safety. And they do so not only in the face of hostility from those who reject our nation’s commitment to the rule of law, but also in the face of evolving adversity – such as an unprecedented global health pandemic.  This week, I ask all Americans to join me in saying ‘thank you’ to our nation’s federal, state, local, and tribal law enforcement officers.  Their devotion and sacrifice to our peace and security will not be taken for granted.”

“During these turbulent times, I hope we will all pause and reflect for a moment on the dedication and sacrifice of our law enforcement officers who risk danger every day – not just from bad actors, but now from an invisible virus,” said U.S. Attorney Moran.  “In 2019, four Washington State law enforcement officers were killed in the line of duty: Kittitas County Sheriff’s Deputy Ryan Shane Thompson; Cowlitz County Sheriff’s Deputy Justin Richard DeRosier; Lynden Police Chief Michael Knapp, and Pierce County Deputy Sheriff Cooper Andrew Dyson.  We remember them and their families who made the ultimate sacrifice to keep the rest of us safe.”

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices.  Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.  

Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty, and commitment to keeping our communities safe.  This year, the COVID-19 pandemic has underscored law enforcement officers’ courage and unwavering devotion to the communities they swore to serve.

Based on data collected and analyzed by the FBI’s Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 89 law enforcement officers died nationwide in the line of duty in 2019, including the 4 (for consistency with the use of numerals “89”) officers here in Washington State.

Deputy Ryan Shane Thompson (Kittitas County) was killed in a shootout on March 19, 2019.  Deputy Justin Richard DeRosier (Cowlitz County) was shot and killed April 14, 2019;  Lynden Police Chief Michael Knapp was struck and killed by a car on November 16, 2019, while crossing the street heading to a City Council meeting.  Deputy Cooper Andrew Dyson (Pierce County) was killed in a car accident December 21, 2019, while answering an emergency call.

Comprehensive data tables about these incidents and brief narratives describing most of the fatal attacks are included in the sections of Law Enforcement Officers Killed and Assaulted, 2019.

The names of the fallen officers who have been added in 2020 to the wall at the National Law Enforcement Memorial will be read on Wednesday, May 13, 2020, during a Virtual Annual Candlelight Vigil.  Because public events have been suspended as a result of COVID-19, the vigil will be livestreamed to the public at 8  p.m. (EDT).  To register to view this free online event, please visit www.LawMemorial.org/webcast.

To learn more about National Police Week and the virtual candlelight vigil, please visit www.policeweek.org.

Seattle - The U.S. Department of Justice and the Washington State Attorney General today settled a False Claims Act investigation involving Seattle Pain Center, Northwest Analytics, and owner/physician Dr. Frank Danger Li, announced First Assistant U.S. Attorney Tessa M. Gorman.  Dr. Li agreed to pay $2.85 million to state and federal authorities to settle allegations his companies billed government entities for medically unnecessary urine drug tests.  Dr. Li’s seven pain clinics closed in July 2016 when the Washington State Medical Quality Assurance Commission suspended his medical license for improperly monitoring prescriptions of powerful opioids.  Today’s settlement is a civil resolution unrelated to any criminal investigation or any action by state health regulators.

“Prescribing massive quantities of addictive opioids fed a crisis that continues to grip our community,” said First Assistant U.S. Attorney Gorman.  “This billing for unnecessary urine tests is a way Dr. Li and his clinics profited on the pain of others.  It is appropriate that we return these dollars to the government entities that were defrauded.”

“Our investigation helped stop Dr. Li and the providers he supervised from continuing to prescribe dangerous and excessive amounts of opioids,” Ferguson said.  “Now we’re reclaiming more than one million Medicaid dollars for the unnecessary drug tests he ordered for his opioid prescription practice. These recouped dollars will cover medical costs for vulnerable Washingtonians, as it was intended.”

According to the settlement agreement, in addition to his pain clinics, Dr. Li owned drug-testing labs in Seattle and Everett.  Northwest Analytics did urine drug testing for Li’s clinics.  In July 2013, Li instituted a policy that, in nearly every instance, each patient being treated at Seattle Pain Centers had to have a full urine drug test panel every time they were seen by a provider.  This policy resulted in thousands of medically unnecessary tests.  The testing protocol did not follow state standards which recommended random testing of up to four times per year.

“Physicians have a responsibility to provide appropriate medical care and to bill federal health care programs properly.  When Dr. Li – who our agency excluded from participating in Medicare and Medicaid programs – billed for medically unnecessary lab tests, our investigators acted decisively to hold him accountable,” said Special Agent in Charge Steven J. Ryan of HHS-OIG.  “Physicians tempted to engage in such fraudulent activities should remind themselves of their professional obligations and the consequences of flouting them.”

“Performing needless medical services, especially those motivated by financial gain and not medical necessity, drains resources from legitimate patient care,” said Bryan Denny, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Western Field Office.  “DCIS and our investigative partners will fully investigate and bring to justice those who deprive the Department of Defense of limited resources needed for the healthcare of our military, veterans, and their families.”

The settlement funds are divided as follows: restitution to Medicare of $1,590,265; restitution to TriCare of $123,000; restitution to the Railroad Retirement Board of $2,672, and restitution to Medicaid of $1,134,151 ($453,796 federal funds and $680,354 state funds).  The settlement agreement details how the funds are to be paid over five years and various ways that the government claims are secured.  The settlement amounts are based in part on Dr. Li’s ability to pay.

Dr. Li does not admit any wrongdoing as part of this settlement.

The investigation was coordinated by the Health and Human Services Office of Inspector General (HHS-OIG).

The matter was handled by Assistant United States Attorney Kayla Stahman as part of the U.S. Attorney’s Office’ Affirmative Civil Enforcement Unit.  The Washington State Attorney General’s Medicaid Fraud Unit participated in the investigation and was represented in the settlement by Senior Counsel Carrie L. Bashaw.

2020.04.06_final_dr_li_settlement_agreement_-_signed_by_all_parties.pdf

Tacoma - A former Port Angeles, Washington, naturopathic physician was charged today with a federal felony related to his attempts to promote a misbranded drug as a prevention for COVID-19, announced U.S. Attorney Brian T. Moran.  RICHARD MARSCHALL, 67, is scheduled to make his initial appearance via teleconference in U.S. District Court in Tacoma on May 12, 2020, on a charge of Introduction of Misbranded Drugs into Interstate Commerce.  

“At a time when scientists are scrambling to identify COVID-19 treatments and vaccines, it is unconscionable and cruel to take people’s money for false hope and promises of a cure,” said U.S. Attorney Brian T. Moran.  “This defendant knew better than to be peddling misbranded drugs.  Fortunately, the community quickly notified law enforcement when they saw he had launched this scheme with a COVID-19 twist.”

According to the criminal complaint, on March 26, 2020, Food and Drug Administration criminal investigators began reviewing complaints from the public regarding postings on Facebook and a website linked to MARSCHALL that claimed the “Dynamic Duo” of substances could kill viruses, including the coronavirus.  MARSCHALL billed himself as a “Health Coach” and retired naturopath.  Various posts promote two substances that can “stop” coronavirus.

On March 30, 2020, an FDA investigator spoke to MARSCHALL on the telephone in an undercover capacity.  MARSCHALL represented to the investigator that one of the substances “doesn’t boost the immune system, it just kills the virus.”  MARSCHALL represented that the second substance would boost the production of white blood cells that attack infections.  The undercover agent ultimately ordered the “Dynamic Duo” for $140 plus shipping. 

The substances were received by FDA investigators in early April, along with documents.  A review showed they were manufactured in facilities in Illinois and Texas.  The original labeling for the substances does not claim to kill viruses, but still MARSCHALL included documents that stated the substances can “crush …. viral infections including those in the Corona family, like in China Corona-19.”

“Making claims that unproven drugs can prevent or treat COVID-19 causes more harm than good. Fraudulent products making false claims can be dangerous,” said Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office. “We will investigate and bring to justice those who try to profit from the pandemic by offering unproven and illegally marketed coronavirus drugs.”

The charges contained in the complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

In 2011 and again in 2017, MARSCHALL was convicted and sentenced in federal court for distributing misbranded drugs.  Due to these prior convictions, MARSCHALL faces increased penalties for introducing misbranded drugs into interstate commerce -- up to three years in prison and a $10,000 fine.  In 2018, the Washington State Department of Health permanently revoked his credential to practice as a naturopath. 

The case is being investigated by the FDA Office of Criminal Investigation (FDA-OCI).  The case is being prosecuted by Assistant United States Attorney Brian Werner who serves as the COVID-19 Fraud Coordinator for the U.S. Attorney’s Office.

marschall_complaint_4-29-20.pdf

 

Seattle-April is Sexual Assault Awareness month, and as part of this week’s focus on National Crime Victims’ Rights, U.S. Attorney Brian T. Moran highlighted the important work his office is doing to support and protect victims of sexual assault.  Over the past year, the office has prosecuted cases of assaults on tribal lands, military installations, national parks, and on board aircraft.  In each case, specially trained members of the Victim Witness Unit work closely with victims to ensure their rights are protected and their voices are heard.

“Throughout my career as a prosecutor at the county, state, and now federal level, I have never forgotten that we do this work for the victims–many of whom have suffered unimaginable trauma,” said U.S. Attorney Moran.  “In a system designed to protect the rights of the accused, I commend those who do the critically important work of guiding and assisting victims through the criminal justice system, working to ensure they are not further traumatized by the legal process and that they are heard and given a voice.”

Federal law enforcement has a unique responsibility in tribal communities to investigate and prosecute sexual assault and domestic violence.  The U.S. Attorney’s Office works closely with the federally recognized tribes in the Western District of Washington to ensure such cases are investigated and prosecuted in tribal, state, or federal court depending on the jurisdictional complexities unique to each tribal nation. 

Similarly, on military installations and federal lands, the U.S. Attorney’s Office works with federal law enforcement to investigate and prosecute cases of sexual assault, child molestation, enticement, and exploitation.

The U.S. Attorney’s Office for the Western District of Washington was one of the first to identify and actively pursue cases of sexual assault aboard aircraft.  In an awareness campaign with the FBI and Port of Seattle, the U.S. Attorney’s Office highlighted the importance of the public awareness.

Autumn, a young woman who was sexually assaulted on a flight from Alaska to Seattle, said intervention from others was key.  “If it hadn’t been for the woman who helped me up and told me to report you, the flight attendant who could tell something was wrong, and the airport staff she contacted, I wouldn’t have reported.  I was too scared that no one would care.  I was scared that people would judge me for not reacting better.  Our youth shouldn’t have to grow up with those fears,” Autumn told the defendant in court at sentencing.

Now as she looks back on her experience with the criminal justice system, Autumn is grateful for the victim advocate, FBI agent and federal prosecutor who guided her through the process.  “I was terrified, but I was pleasantly surprised by the process and the people I got to work with…  If we don’t report these (assaults) there isn’t going to be any justice.  I hadn’t wanted to speak at sentencing, but doing that helped me get some closure.”

Court-ordered restitution is paying for counseling and self-defense training which Autumn says has been valuable so that she can respond differently in the future.

Sadly, sexual assault is vastly underreported–The National Sexual Violence Resource Center cites a statistic that in 2018 only 25% of rapes and other sexual assaults were reported to police.  For more information, visit King County Sexual Assault Resource Center at www.kcsarc.org or call 888-99-VOICE.

For more information on National Crime Victims’ Rights Week Call 855–4–VICTIM or visit VictimConnect.org to learn about victims’ rights and options.

Tacoma – A 23-year-old Renton, Washington, man made his first appearance today in U.S. District Court in Tacoma on a charge of second degree murder for the February beating death of a 21-year-old woman, announced U.S. Attorney Brian T. Moran.  The victim, a resident of California, had traveled to the Seattle area to meet up with ALEJANDRO J. AGUILERA ROJAS.  The two traveled to the Sequim, Washington, area on February 10, 2020. 

“I commend the Clallam County Sheriff’s Office and the FBI for their quick and thorough work on this case,” said U.S. Attorney Brian T. Moran.  “The victim’s family has lost their loved one forever, and we will work hard to ensure that the defendant is held accountable for taking her life.”   

According to the criminal complaint, AGUILERA ROJAS was having a relationship with the victim–a relationship hidden from his wife and family.  The victim had traveled to Seattle to visit AGUILERA ROJAS.  The victim’s friends and family members reached out to AGUILERA ROJAS, who gave them conflicting information about the victim’s whereabouts.  A friend of the victim reported her missing to law enforcement when she did not contact them after February 10, 2020.  The victim’s body was found off a logging road in Olympic National Forest on February 14, 2020.  There were signs she had been beaten and stabbed.  A broken and bloody tequila bottle, box cutter, and knife were located near where the victim’s body was discovered.  There was no identification on the body.

Law enforcement reviewed surveillance video at a Sequim convenience store and determined a woman and a man, later identified as AGUILERA ROJAS, had visited the store.  Law enforcement was able to determine that AGUILERA ROJAS’ cell phone and the victim’s phone had been in the area of the murder on February 10 and 11 and that both phones had then travelled back to the area of AGUILERA ROJAS’ residence, after the victim had been killed and left in the Olympic National Forest.

The autopsy of the victim by the King County Medical Examiner’s Office ruled the manner of death as a homicide and the cause of death by multiple blunt and sharp force injuries.

AGUILERA ROJAS was interviewed by law enforcement on February 19, 2020.  He made a number of different statements about his relationship with the victim and what had happened.  AGUILERA ROJAS was booked into Clallam County Corrections where he remained until being taken into federal custody.  Because the murder occurred on federal land in the Olympic National Forest, the case is being prosecuted in federal court.

The case is being investigated by the FBI and the Clallam County Sheriff’s Office, with significant assistance from the Washington State Patrol.

The case is being prosecuted by Assistant United States Attorneys Ye-Ting Woo and Rebecca S. Cohen. 

aguilera_rojas_complaint.pdf

Seattle - U.S. Attorney Brian T. Moran today recognized the important role of victims and victim advocates in the criminal justice system, as part of National Crime Victims’ Rights Week.  The first victims’ rights week was declared in Philadelphia in 1975 and became a nationally recognized week with a declaration by President Ronald Reagan in 1981.  This year April 19-25 is National Crime Victims’ Rights Week.

“The evolution of the rights of crime victims in the criminal justice system is a relatively recent development, and one that is critically important,” said U.S. Attorney Moran.  “This week allows us to highlight important messages: Victims will be informed, heard, consulted and respected at all phases of criminal prosecutions.  We encourage reporting crimes to law enforcement so that we can provide services and protect victims’ rights.”

In the Western District of Washington, a dedicated team of victim advocates makes sure crime victims are consulted, connected to resources, are notified of each hearing, and are able to participate as much as they want in the criminal process.  Whether it is a crime of fraud or a crime of violence, victims can suffer major life disruptions and ongoing trauma.  Some fear they will not be believed or may even be blamed for falling victim to a crime. 

For victims of financial fraud, such as those who fell prey to Keenan Gracey, being a crime victim was a new experience.  “I had never been a victim of a crime.  It was scary, I felt violated…  But I felt (the victim witness specialist) was going to fight for me.  I felt like I knew what to expect,” Laurie said. 

Laurie’s son Jason adds, “I got a lot out of it, learning what was happening with the case.  I felt like I was actually part of it….  I was able to have my voice heard and I was able to positively contribute to the justice system…  By showing up and voicing my opinion it allowed the judge to see the true impact of this crime on the community.”

Both say that by being involved in the justice system and speaking up, they gained closure.  “It can happen to you and if it does, speak up and fight back to help the next person who could be victimized by the scheme,” Laurie said.  Jason adds “You will feel supported and you will reclaim your strength.  It allows you to heal and do so safely.”

The focus on victims’ rights began in the late 1970’s, and the protections were codified federally in the Victim and Witness Protection Act of 1982.  Over the years, there have been other important milestones such as the establishment of DOJ’s Office of Victims of Crime (OVC) in 1983, passage of the Violence Against Women Act in 1994, the creation of the FBI’s internet crime site Ic3 in 2000, DOJ’s StopFraud.gov in 2010.  As recently as 2019, victim rights were key considerations in the establishment of the Presidential Task Force on Missing and Murdered Native Americans and Alaska Natives, and the Debbie Smith DNA Backlog Grant Program.

The Office for Victims of Crime, part of the Justice Department’s Office of Justice Programs, supports more than 7,000 local victim assistance programs and victim compensation programs in every state and U.S. territory.  Funds for these programs come from the Crime Victims Fund, which is made up of federal criminal fines, penalties, and bond forfeitures.

During National Crime Victims’ Rights Week, victim advocacy organizations, community groups and state, local, and tribal agencies traditionally host rallies, candlelight vigils, and other events to raise awareness of victims’ rights and services.  This year, due to COVID-19, many communities are organizing virtual gatherings and online public awareness campaigns.

To learn about victims’ rights and options call 855–4–VICTIM or visit VictimConnect.org.

Seattle – U.S. Attorney Brian T. Moran of the Western District of Washington and William D. Hyslop of the Eastern District of Washington today announced that the state of Washington received almost $11 million in Department of Justice grants to respond to the public safety challenges posed by the outbreak of COVID-19.

The grants, to the Washington Department of Commerce and the city of Olympia, are available under the Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump. An additional $5.7 million has been allocated for other local jurisdictions in Washington. Those jurisdictions can find out if they are eligible and apply immediately by visiting this website. The Justice Department is moving quickly, awarding grants on a rolling basis and aiming to have funds available for drawdown as soon as possible after receiving applications.

“Our first responders continue to answer the call every single day, to keep our communities safe, while risking exposure to this dangerous virus,” said U.S. Attorney Moran.  “The Department of Justice provides this funding with significant flexibility, so that state and local departments can use it in the ways that best benefit their officers and their community.”

“The outbreak of COVID-19 and the public health emergency it created are sobering    reminders that even the most routine duties performed by our nation’s public safety officials carry potentially grave risks,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “These funds will provide hard-hit communities with critical resources to help mitigate the impact of this crisis and give added protection to the brave professionals charged with keeping citizens safe.”

The law gives jurisdictions considerable latitude in the use of these funds for dealing with COVID-19. Potential uses include hiring personnel, paying overtime, purchasing protective equipment, distributing resources to hard-hit areas and addressing inmates’ medical needs.

Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for the emergency funding. Local units of government and tribes will receive direct awards separately according to their jurisdictions’ allocations.

The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.

Tacoma – Two men who schemed to fake a suicide so one could go AWOL from the U.S. Army were charged today in U.S. District Court in Tacoma with making a false distress message to the U.S. Coast Guard, announced U.S. Attorney Brian T. Moran.  DEVIN MITCHELL SCHMIDT, 20, a former soldier from Joint Base Lewis-McChord, and his cousin, RYEN ETHAN BELL, 21, of Bonney Lake, Washington will appear in U.S. District Court in Tacoma on June 4, 2020.

According to the criminal complaint, in December 2019, SCHMIDT schemed with BELL to fake his death by suicide so that SCHMIDT could end his military service and live in Mexico.  The two men set their scheme in motion on December 18, 2019, when SCHMIDT filmed a fake suicide video saying goodbye to his family and friends.  BELL reported to Port Townsend, Washington Police that his cousin had sent him the video indicating that he had committed suicide in Fort Warden Historical State Park.  BELL and a friend drove to the park after he received the video via text message.  BELL “found” SCHMIDT’s dog tags, unlocked phone and other belongings at the top of the cliff, 150 feet above the beach at Fort Warden.

As part of the scheme, BELL made the missing person report, knowing that his cousin was alive and in hiding.  The report triggered a search first by the Jefferson County Sheriff’s Office and on December 19, 2019, a massive Coast Guard search of the waters below the cliffs in dangerous weather conditions.  The search, which lasted approximately 10 hours, cost in excess of $172,000.

The scheme fell apart at about 4:00 p.m. on December 19, 2019, when BELL’s mother revealed that information she received from law enforcement made her suspicious of the missing person report. BELL’s mother said that BELL had told her SCHMIDT was missing and suicidal some four hours before he had actually received the suicide video.  Law enforcement examined BELL’s phone and Facebook messages and determined the two planned to meet up at a Port Townsend McDonalds the evening of December 19, 2019 to begin the next step of their plan to go to Mexico.  Police were waiting and arrested both men.

SCHMIDT received an ‘Other than Honorable Discharge’ from the military on March 25, 2020.

Making a false distress call to the Coast Guard is punishable by up to six years confinement, three years of supervised release, up to $100,000 in civil penalties and up to $250,000 in fines, and financial liability for all costs incurred by the Coast Guard for the life-saving efforts.

The case is being investigated by the U.S. Coast Guard Investigative Service (CGIS), with assistance from the Port Townsend Police Department and Jefferson County Sheriff’s Office.

The case is being prosecuted by Assistant United States Attorney Hillary Stuart.

bell_and_schmidt_complaint.pdf