Western District of Washington

WASHINGTON – Attorney General William P. Barr today launched a national strategy to address missing and murdered Native Americans.  The Missing and Murdered Indigenous Persons (MMIP) Initiative places MMIP coordinators in 11 U.S. Attorney’s offices, including in Washington State, who will develop protocols for a more coordinated law enforcement response to missing cases.  The plan also calls for the deployment of the FBI’s most advanced response capabilities when needed, improved data collection and analysis, and training to support local response efforts.

“American Indian and Alaska Native people suffer from unacceptable and disproportionately high levels of violence, which can have lasting impacts on families and communities.  Native American women face particularly high rates of violence, with at least half suffering sexual or intimate-partner violence in their lifetime.  Too many of these families have experienced the loss of loved ones who went missing or were murdered,” said Attorney General William P. Barr.  “This important initiative will further strengthen the federal, state, and tribal law enforcement response to these continuing problems.” 

“The FBI recognizes the violence that tribal communities face and is fully committed to working with our federal, state, local, and tribal law enforcement partners to provide support to those impacted by these crimes,” said FBI Director Christopher Wray. “We are dedicated to delivering justice and to the FBI’s mission to protect all the people we serve.  We reaffirm our focus on allocating resources to serve Native American needs.”

“The Western and Eastern Districts of Washington are joining together to make sure we advance this important mission in all 29 tribal communities in our state,” said U.S. Attorney Brian T. Moran.  “The MMIP coordinator will work not only to improve data and information on murdered and missing indigenous people, but to make sure each tribe is connected with important law enforcement services to improve safety in our native communities.”

“Ending the violence that disproportionately affects Native American communities is a top priority,” said U.S. Attorney William D. Hyslop.  “The United States Attorney’s Office for the Eastern District of Washington is committed to working collaboratively with federal, state, local and tribal law enforcement to recover the Native American women who have gone missing, and to find justice for those who have been murdered.”

“For too long, violence against Indian people, particularly Indian women, has been invisible.  In my own family, the murder of my grandmother was never properly investigated,” said Swinomish Indian Tribal Community Chairman Brian Cladoosby.  “I am grateful to Attorney General Barr and the Department of Justice for taking action to address this injustice.  I look forward to working with them to make Indian Country safe for all Indian families.”

The strategy has three parts.

Establish MMIP coordinators:  The Department of Justice is investing an initial $1.5 million to hire 11 MMIP coordinators in 11 states to serve with all U.S. Attorney’s offices in those states, and others who request assistance.  The states are Alaska, Arizona, Montana, Oklahoma, Michigan, Utah, Nevada, Minnesota, Oregon, New Mexico, and Washington state.  MMIP coordinators will work closely with federal, tribal, state, and local agencies to develop common protocols and procedure for responding to reports of missing or murdered indigenous people.  The first MMIP coordinator is already on board in Montana. 

Specialized FBI Rapid Deployment Teams:  The strategy will bring needed tools and resources to law enforcement.  Upon request by a tribal, state, or local law enforcement agency the FBI will provide expert assistance based upon the circumstances of a missing indigenous persons case.  FBI resources and personnel which may be activated to assist with cases include:  Child Abduction Rapid Deployment (CARD) teams, Cellular Analysis Support Teams, Evidence Response Teams, Cyber Agents for timely analysis of digital evidence/social media, Victim Services Division Response Teams, and others.  MMIP coordinators will assist in developing protocols.

Comprehensive Data Analysis:  The department will perform in-depth analysis of federally supported databases and analyze data collection practices to identify opportunities to improve missing persons data and share the results of this analysis with our partners in this effort.

More broadly, the MMIP Initiative will involve a coordinated effort by more than 50 U.S. Attorneys on the Attorney General’s Native American Issues Subcommittee (NAIS), the FBI, and the Office of Tribal Justice, with support from the Office of Justice Programs (OJP) and the Office on Violence Against Women (OVW).  

Today’s announcement follows the August NAIS meeting in New Mexico and OVW listening session in Michigan, where Missing and Murdered Indigenous Persons and violence against women in Indian country were prevalent topics of discussion by U.S. Attorneys, OVW officials, and tribal representatives.

Seattle—An Edmonds, Washington, business owner was arrested today on an indictment charging her with arson and wire fraud related to the April 30, 2018, fire at her business, announced U.S. Attorney Brian T. Moran.  CONNIE L. BIGELOW, 52, will make her initial appearance on the indictment at 2:00 today. 

The indictment alleges that BIGELOW set fire to her business to collect insurance money as the store was struggling to make enough money to pay the rent.  BIGELOW moved her business, CJN Miniatures LLC, into the building at 23030 Highway 99, in Edmonds in September 2017.  The store maintained an inventory of miniatures and collectables for sale, consigned items on behalf of other individuals, and rented out space to other vendors.  Between October 2017 and April 2018, the business fell behind in rental payments and payments to consigners.  BIGELOW bounced checks as she over drafted her bank account.

BIGELOW carried an insurance policy with State Farm Fire and Casualty Company that covered up to $100,000 in loss of business personal property, as well as loss of income.  The policy did not cover loss arising from arson.

The indictment alleges that BIGELOW set the fire underneath three Thomas Kinkade paintings worth thousands of dollars.  On or about May 1, 2018, BIGELOW initiated a claim to State Farm for the losses arising from the fire.  On May 3, 2018, BIGELOW communicated with the insurance agent via email as part of the wire fraud scheme.  BIGELOW made false statements to law enforcement, as well as representatives of State Farm as part of the scheme to defraud.

Following the fire, BIGELOW reopened the store as “Miniatures & More” on 5th Avenue in Edmonds.

Arson is punishable by a mandatory minimum five years in prison and up to 20 years in prison.  Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.

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 Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), along with the Snohomish County Fire Marshals Office.  The case is being prosecuted by Assistant United States Attorney Amy Jaquette.

 

Seattle – Three Seattle area residents have been indicted by a grand jury following a federal investigation of illegal firearms purchases, announced U.S. Attorney Brian T. Moran.  The arrests highlight the Department of Justice focus on combatting gun crime under “Project Guardian.”  One core emphasis of Project Guardian is to increase prosecution of so-called “lie and buy” or “lie and try” cases where the purchaser is obtaining a firearm for a prohibited person.

“Project Guardian furthers our efforts to stop gun violence in Western Washington, by enhancing coordination between federal, state, local and tribal law enforcement,” said U.S. Attorney Brian T. Moran.  “This ATF-led operation arrested three people on indictments charging them with lying on federal forms to purchase guns that were destined for felons, individuals associated with violent street gangs, and others who simply should not have a firearm.”

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

On November 7, 2019, a grand jury returned a ten-count indictment charging SHANNON McCALL, 40, of Seattle and her son, LEONTAI BERRY, 20, of Federal Way, Washington, with a conspiracy to purchase firearms in violation of federal law.  Between August 2017 and January 2019, McCALL repeatedly lied on firearms purchasing forms claiming that five different firearms were for her personal use.  In fact, McCALL purchased the firearms on behalf of BERRY, who was under the legal age to purchase a firearm.

According to records filed in the case, BERRY converted some of the guns to machine guns, and some of the illegally purchased firearms are linked to gang-related shootings and possession by felons.  In addition to conspiracy, BERRY and McCALL are charged with making false statements in connection with purchasing firearms.  BERRY is also charged with possessing a machine gun, and McCALL is charged with making a false statement to federal officers.

The grand jury returned a second indictment against CARL DEANDRE KEMP, 26, of Seattle charging him with making a false statement in acquisition of a firearm.  The indictment alleges that KEMP falsely claimed that he was the actual buyer of a firearm that he purchased.

The charges contained in the indictments are punishable by up to 10 years in prison and a $250,000 fine.

The charges in the indictments are only allegations.  A person is presumed innocent unless and until he or she is convicted in a court of law.

The cases are being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and are being prosecuted by Assistant United States Attorney Jessica Manca who serves as the Project Guardian coordinator for the U.S. Attorney’s Office.

Additional Information on Project Guardian:

Project Guardian’s implementation is based on five principles:

1) Coordinated Prosecution.  Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.

2) Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
 
Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.

3) Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.

4) Coordinated Response to Mental Health Denials.  Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS.  ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to assure better public safety. 

Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm.  United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health.

5) Crime Gun Intelligence Coordination.  Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology.  These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.

 

A former Seattle area resident who defrauded dozens of investors of at least $6.1 million was sentenced today in U.S. District Court in Seattle to 180 months  (15 years) in prison for wire fraud and money laundering, announced U.S. Attorney Brian T. Moran.  KEENAN A. GRACEY, 28, formerly of Newcastle, Washington, defrauded Seattle-area investors and others out of millions of dollars by pretending to sell them stock that GRACEY did not own and had no right to sell.  At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez told GRACEY:  “You stole much more than money.  You stole their trust.  You stole their futures.  You changed forever their children’s futures.  All for what?  To feed an outsized ego.”

“This defendant is a financial predator who singlehandedly destroyed the lives of honest, hardworking people who did nothing wrong.” said U.S. Attorney Brian T. Moran.  “Gracey callously looted their retirement funds, forced some into bankruptcy, and destroyed the dreams of people who had saved to buy a house or fund their children’s educations.  This sentence will protect the public from his penchant for fraud.”

According to records in the case, between 2016 and 2018, GRACEY posed as a British billionaire with degrees from the London School of Economics and Oxford University.  He rented expensive cars such as Bentleys and Ferraris and rented expensive homes in Clyde Hill, Mercer Island, and Newcastle, Washington, as well as in Beverly Hills and San Diego, California.  GRACEY told prospective investors that he owned all of these cars and houses.  GRACEY also used falsified bank statements to make it appear he had hundreds of millions of dollars of cash on hand.  The investigation revealed that GRACEY is Canadian, not British, and rented expensive homes and cars to make it appear he was wealthy.

GRACEY told potential investors he had special access to millions of shares of “pre IPO” stock that would produce returns of as much as 60 times the initial investment.  Some investors gave GRACEY as much as $745,000, believing that they were purchasing stock.  In fact, GRACEY did not own any of the stock he was pretending to sell and simply stole the victims’ money.  In all, GRACEY collected $5,894,676 from dozens of investors.

The Securities and Exchange Commission filed a civil suit against GRACEY in May 2018 and obtained a temporary restraining order barring him from selling securities.  In September 2018, the order was made permanent, and GRACEY was ordered to disgorge $4.4 million in cash and wire transfers that he had fraudulently obtained from investors.  However, even after the SEC order, GRACEY continued to try to defraud investors by claiming he owned shares in a gene editing company.  Between June 2018 and December 2018, GRACEY collected $2.2 million for shares of stock he did not own.

GRACEY’s fraud ended when he was arrested by the FBI on December 20, 2018.  A federal grand jury charged him with wire fraud on January 3, 2019.  On July 25, 2019, the grand jury returned a superseding indictment asserting additional charges, including money laundering charges.  GRACEY pleaded guilty on August 15, 2019.

On March 29, 2019, the United States seized $603,840 of fraud proceeds that GRACEY had paid to rent a luxury mansion in Beverly Hills, California.    According to court pleadings, the government intends to forfeit this money and request it be used to compensate GRACEY’s victims. 

The case was investigated by the FBI and prosecuted by Assistant United States Attorneys Seth Wilkinson, Lyndsie Schmalz, and Michelle Jensen. 

Tacoma – A Vancouver, Washington, man who allegedly ran a drug trafficking operation out of his mobile home and storage facilities throughout the South Sound region was arrested November 7, 2019, on a complaint charging him with two counts of possession of alpha-Pyrrolodinopentiophenone with intent to distribute.  HARLEY SKYBERG, 40, of Vancouver, Washington, will make his initial appearance in U.S. District Court in Tacoma at 2:30 PM today.  The controlled substance is known as alpha-PVP or ‘bath salts’.  The arrest and charges follow a lengthy investigation by the U.S. Postal Inspection service that traced packages from Chehalis, Washington, to addresses throughout the U.S.

According to the criminal complaint, SKYBERG operated a website ‘wickedherbals.guru’ that offered a variety of bath salt substances for sale with names such as “White Water Rapid,” “White Lightening,” “High Octane,” “Snowman,” “Wicked Yeti,” “Scooby Snax,” “Klimax,” “White Tiger,” “Kush Extra,” and “Supergirl.”  The U.S. Postal Inspection Service (USPIS) intercepted a variety of packages allegedly mailed by SKYBERG that contained white powdery substances with those names.  The substances contained various levels of chemicals known as ‘bath salts.’  Law enforcement also determined that SKYBERG was obtaining his chemicals from China and intercepted at least one package destined for his post office box in Chehalis.  Investigators searched three storage lockers SKYBERG appears to have rented in connection with his drug trafficking activities.  The storage facilities were in Lacey, Kelso, and Vancouver, Washington.

At the time of the arrest, law enforcement seized four 27-gallon tubs of substances consistent with ‘bath salts,’ as well as a capsule-filling device and empty packaging from shipments from China.

Possession of alpha-Pyrrolidinopentiophenone with intent to distribute is punishable by up to 20 years in prison and $1,000,000 fine.

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 U.S. Postal Inspection Service (USPIS) and is being prosecuted by Assistant United States Attorney Seungjae Lee.

skyberg_complaint.pdf

 

Tacoma – A 39-year-old Vancouver, Washington, man was charged today in U.S. District Court in Tacoma with nine federal sex crimes for his scheme to entice and pressure young teens into sending him sexually explicit photos.  JOSHUA HENRY PUNT is charged with four counts of production of child pornography and five counts of enticement of a minor for his six-month criminal scheme.  PUNT used the messaging app ‘Kik’ and Snapchat to connect with young teens across the U.S.  Victims in this case have been identified in New York, Arkansas, California, Texas, and West Virginia. 

“This defendant is the ‘dangerous stranger’ we all hope our kids never meet,” said U.S. Attorney Brian T. Moran.  “He is alleged to have trolled the internet, posing as a teen, and probing for vulnerabilities in those looking for friendship.  What followed were threats, blackmail, and the horror of possibly having private moments put on display.”

According to the criminal complaint filed in the case, law enforcement has identified five victims who reported similar details of how PUNT contacted them on the ‘Kik’ messaging app or by Snapchat pretending to be a teen-age boy.  The incidents charged in the case began in approximately October 2018 and continued until May 2019.  After convincing the teens to send sexually explicit photos, PUNT demanded additional photos and videos of sex acts.  PUNT threatened to send the photos he already had to the victims’ peers at their schools or in their community if they did not provide more images.

After a victim in New York went to police, authorities traced the contact to PUNT and seized his electronic devices from his home in Vancouver.  The phone contained hundreds of sexually explicit images and videos, and authorities are working to identify additional victims.

PUNT was arrested on May 21, 2019, and was originally charged in Clark County Superior Court.  Clark County Prosecutors are working closely with federal prosecutors and determined the case was best pursued in federal court.

Production of Child Pornography is punishable by a mandatory minimum 15 years and up to 30 years in prison.  Enticement of a minor is punishable by up to life in prison.  If convicted, the ultimate sentence will be determined by the Court based on the advisory Sentencing Guidelines and other statutory factors.

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 Vancouver Police Department’s Digital Evidence Cybercrime Unit, in conjunction with Homeland Security Investigations.  Law enforcement agencies in other jurisdictions are also assisting this investigation.  The case is being prosecuted by Assistant United States Attorney Angelica Williams.

punt_complaint.pdf

Seattle – One defendant has pleaded guilty, and three others and a physician- owned testing lab have been indicted following the investigation of kickbacks in connection with laboratory testing services.  The grand jury returned indictments on November 6, 2019, against JAE LEE, 48, of Bellevue, RICHARD REID, 50, of Astoria, Oregon, KEVIN PULS, 54, of Bellevue, and Northwest Physicians Laboratory of Bellevue, Washington.  Both the company and the individual defendants are scheduled to make their first appearance in U.S. District Court in Seattle on December 5, 2019.

Northwest Physicians Laboratory (NWPL) and its relationship to Molecular Testing Labs (MTL) of Vancouver, Washington, are described in the plea agreement of STEVEN P. VERSCHOOR, 52, of Boise, Idaho, a co-founder of MTL.  VERSCHOOR pleaded guilty on October 30, 2019, admitting that he paid kickbacks to NWPL for referring urine tests to be performed at MTL.  According to the plea statements, starting in 2014, MTL agreed to pay NWPL as much as $100,000 per month to send patient urine tests to the Vancouver lab.  NWPL is physician-owned, and for that reason could not test urine samples for patients covered by government health programs such as Medicare, Medicaid, and TRICARE.  In order to conceal the payment of the kickbacks, MTL and NWPL described the fees as being for marketing services; however, VERSCHOOR was not aware of any marketing services being performed.  In all, MTL paid NWPL $450,000.  In exchange, MTL was able to bill the government more than $2,000,000 for urine testing services.

In December 2018, MTL agreed to pay $1,777,738 to settle allegations that it violated the False Claims Act by paying illegal kickbacks to obtain referrals for government healthcare insurance programs.  According to the settlement, between August 2014 and July 2015, the government claimed that MTL made payments to local laboratories in exchange for referrals of Medicare and TRICARE program business, in violation of 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 indictment charges NWPL and the three executives with conspiracy to both solicit kickbacks and pay kickbacks.  The indictment charges four additional counts of receipt of kickbacks.

Conspiracy to pay kickbacks involving federal healthcare programs is punishable by up to five years in prison.  Receipt of kickbacks involving federal healthcare programs is punishable by up to 10 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.

VERSCHOOR is scheduled to be sentenced by U.S. District Judge James L. Robart on January 21, 2020. VERSCHOOR has agreed to pay $461,752 in restitution.  Some of that amount may be paid by the MTL in its settlement with DOJ.

The case is being investigated by the FBI, Health and Human Services Office of Inspector General (HHS-OIG), and the Defense Criminal Investigative Service (DCIS).

The case is being prosecuted by Assistant United States Attorneys Brian Werner and Matthew Diggs.

nwpl_indictment.pdf

Seattle – A 40-year-old Seattle man was sentenced today in U.S. District Court in Seattle to ten years in prison and fifteen years of supervised release for possession of child pornography, announced U.S. Attorney Brian T. Moran.  NOLAN PAUL CYRE, was on probation for a state sex crime in April 2018, when hundreds of images of child pornography were discovered on his electronic devices.  At the sentencing hearing, U.S. District Judge Robert S. Lasnik told CYRE, “You have an addiction, an attraction to using young children as sexual objects…. You have a lot of work to do.”

According to records filed in the case, in February 2016, CYRE was sentenced in King County Superior court to 34 months in prison for attempted commercial sexual abuse of a minor.  In that case, CYRE attempted to pay a 15-year-old for sex acts.   As part of his probation following the prison term, CYRE was prohibited from possessing electronic devices that could access the internet.  On a visit to his residence, probation officers noticed a laptop and other prohibited devices.  The devices were seized and forensically analyzed by Homeland Security Investigations (HSI) and were found to contain hundreds of images and movies of child sexual abuse.  The investigation revealed that the laptop contained 113 image files and 48 video files of known victims of child pornography. 

CYRE also has a 2011 arrest and military court conviction for possession of child pornography.

Judge Lasnik ordered him to pay $12,000 in restitution to the six victims identified in the child pornography on the laptop.

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 Investigation (HSI) and the Washington State Department of Corrections (DOC). 

The case was prosecuted by Special Assistant United States Attorney Cecelia Gregson.  Ms. Gregson is a Senior Deputy King County Prosecutor specially designated to prosecute child exploitation cases in federal court.

 

Seattle – A former lawyer, who was disbarred following a 2003 fraudulent check scheme, and a federal fraud conviction, was sentenced today in U.S. District Court in Seattle to five years in prison and three years of supervised release for wire fraud and aggravated identity theft.  JOHN WILLIAM ALDERSON, 47, pleaded guilty in July 2019 following a three-year scheme to defraud a romantic partner and family members.  ALDERSON has a 2003 federal conviction for wire fraud and Social Security fraud, which resulted in a 41-month prison term.   At his sentencing hearing U.S. District Judge Richard A. Jones said, “You have not demonstrated any respect for the law.  You do this over and over and over.”

According to records filed in the case, in 2014 ALDERSON met his victim through an online dating website, and falsified much of the information he told the victim about his background.  ALDERSON lied about his age, his educational background, his family’s wealth and failed to disclose his prior federal conviction for fraud.   ALDERSON moved into his victim’s home in 2015 and gained access to the victim’s personally identifying information.  Using that information, ALDERSON opened the credit card accounts and pretended to be the victim to dispute charges on the credit cards.  One of the charges incurred on the cards was for ALDERSON to have plastic surgery at a Bellevue clinic.  Those charges traveled interstate, constituting wire fraud.  ALDERSON induced the victim to write him checks that were to be deposited in a joint investment account but instead were used by ALDERSON for his own expenses.  ALDERSON forged letters and emails from various attorneys representing that ALDERSON was to receive a large financial settlement.  Those representations were false.  ALDERSON also used the identity of relatives living in Enumclaw to open an additional credit card account resulting in more than $38,000 in fraud.  ALDERSON admits to a total fraud loss of more than $262,712.

Calling him a “financial predator,” prosecutors asked for a sentence at the high end of the guidelines range saying, “The fraud he admitted to in this case was elaborate, involving layer upon layer of deception…. Fraud is nothing new to Alderson. His conduct in this case is part of a pattern of fraud and criminality that stretches back over fifteen years.”

ALDERSON’s victims told the court that he is a “vindictive and unrepentant predator” who treated his crimes as “a thrilling game of fraud and deception,” and wielding his legal knowledge as a weapon to harm others.  One called him a “charming chameleon who wants to derail the lives of others.”

Judge Jones agreed that the harm in this case went beyond the financial impact noting “the wrecking-ball effect” of what ALDERSON did, “betraying trust, integrity, compassion and love, with greed, lies, fraud and deceit.”

Judge Jones ordered ALDERSON to pay $141,482 in restitution to his victims.

The case was investigated by the FBI.

The case was prosecuted by Assistant United States Attorney Michael Dion.

Tacoma, Washington – A Spanaway, Washington man who made sexually explicit images of an 11-year-old child and traded the child’s underwear for more images of child rape, was convicted today in U.S. District Court in Tacoma of three federal charges.  DONNIE BARNES, SR, 52, was convicted of production of child pornography, distribution of child pornography and possession of child pornography following a two-day jury trial.  BARNES faces a mandatory minimum 15-year prison term when sentenced by U.S. District Judge Benjamin H. Settle on February 3, 2020.

According to records filed in the case and testimony at trial, in February 2018, BARNES came to the attention of law enforcement when a police detective in Queensland, Australia noticed a suspicious file on a public photo-sharing website.  The album showed close-up photos of a child’s genitals.  In an undercover persona, the officer commented on the photos, and received emails the next day from BARNES describing the child in sexual terms, and revealing BARNES relationship to the child.

In early March 2018, agents with Homeland Security Investigations searched  BARNES residence in Spanaway.  When interviewed by law enforcement, BARNES admitted photographing the child while the child was asleep, and uploading the images to the internet.  Additionally, BARNES told officers he had traded soiled underwear from the child for additional images of child rape to someone seeking such items via Craigslist.  Those images were located on an electronic storage device in BARNES’ home.

Production of child pornography is punishable by a mandatory minimum 15-year prison term, and up to thirty years in prison.  Possession and distribution of child pornography are both punishable by up to twenty years in prison. 

The case was investigated by Homeland Security Investigations with assistance from the Queensland Police Service (QPS).

The case is being prosecuted by Assistant United States Attorneys Matthew Hampton and Lyndsie Schmalz.

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.

Seattle – A repeat offender who was identified by Seattle police in a 2017 drug trafficking investigation was convicted today in U.S. District Court in Seattle of three federal felonies, announced U.S. Attorney Brian T. Moran.  JONATHAN RUSHING, 40, was convicted  following a three-day trial of possession of crack cocaine and MDMA with intent to distribute, being a felon in possession of a firearm, and carrying a firearm during and in relation to a drug trafficking crime.   This is RUSHING’s fourth conviction for being a felon in possession of a firearm.  RUSHING is scheduled for sentencing by U.S. District Judge Thomas S. Zilly on January 23, 2020.

RUSHING was identified during an investigation into a drug distribution ring operating in downtown Seattle on the evening of November 8, 2017.  RUSHING was observed meeting with known members of the drug distribution group and then returning to the passenger side of a car he had parked near Pioneer Square.  After sitting on the passenger side of the sedan near the glove box for about 20 minutes, RUSHING went to a bar in Pioneer Square.  When RUSHING left the bar, uniformed Seattle Police officers approached RUSHING in order to identify him.  RUSHING took off running, but was arrested a few blocks away.  RUSHING had a Glock firearm in a holster inside his waistband.  The Glock had a laser sight and flashlight attached.  When authorities searched the car RUSHING was driving, they found dealer amounts of crack cocaine and MDMA hidden in a sock in the glove box.

After RUSHING was arrested that November night, he left the Seattle area and was a fugitive when the drug trafficking organization was indicted on February 13, 2018.  RUSHING was ultimately arrested in February 2019, in Moreno Valley, California on a warrant from the U.S. Marshal Service.  RUSHING fought with local officers who subdued him following a traffic stop.

RUSHING has an extensive criminal history, including a 1997 conviction in King County Superior Court for second-degree murder, when he shot and killed an individual in downtown Seattle during a drug transaction.  He has King County convictions for illegally possessing firearms in 1996 and1997, and a federal conviction for being a felon in possession of a firearm from 2012.  Rushing was arrested in this case only two months after completing his term of supervision from his 2012 federal conviction for firearm possession. 

Because of the conviction for carrying of a firearm in connection with a drug trafficking offense, RUSHING faces a mandatory five-year term to run consecutive to the sentence handed down for the drug and felon in possession conviction.

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

The case is being investigated by the Seattle Police Department and the Drug Enforcement Administration (DEA).

The case is being prosecuted by Assistant United States Attorneys Kate Vaughan, Tobias Tobler and Vince Lombardi.

SEATTLE - On Thursday, in accordance with the Court-approved plan for demonstrating sustained compliance for two years, the City of Seattle filed its report from a comprehensive self-review of the Seattle Police Department’s (SPD) uses of force, which includes a verification review of cases by the Department of Justice (DOJ) and the Monitoring Team to determine whether the force used was reasonable, necessary and proportionate.  The City also filed a report on its review of SPD’s use of Terry stops and detentions, also with verification by the DOJ and Monitoring Team, and a review of their stops and detention policies an “outcome report” on SPD’s crisis intervention program, providing statistics on encounters with people in crisis. 

Together, these filings in U.S. District Court demonstrate that SPD’s reformed practices relating to use of force, crisis intervention, and stops and detentions have allowed it to sustain compliance with the consent decree.

“Use of force was central to the initial DOJ investigation and the subsequent reforms required by the consent decree,” said Brian Moran, U.S. Attorney for the Western District of Washington. “SPD continues to demonstrate that it remains in compliance with one of the core issues addressed in the consent decree, including very low uses of force.  A clear indicator of the success of SPD’s new approach is the use of de-escalation training and tactics by officers in their encounters with people experiencing crisis.  The goal of the consent decree was to fundamentally change the policies, training, and internal supervision and accountability around uses of force, and it is evident that those changes have taken root and are being sustained.  SPD has the structures and systems in place to critically look at individual incidents and overall data to ensure continued constitutional policing once the consent decree is complete.” 

In its 2011 investigation, DOJ found that there were at least 1,230 incidents involving a serious use of force in the 28-month period from January 2009 to April 2011.  DOJ determined that SPD used unconstitutional force in 20 percent of incidents involving a serious use of force (now known at Type II and III uses of force).  Around 70 percent of all uses of force were against people experiencing crisis. 

After the implementation of significant reforms required by the consent decree, the Federal Monitor found that there was a sixty 60 percent reduction in serious use of force, to 487 incidents, in the 28-month period from July 2014 to October 2016.  Since that time, SPD has sustained this reduction.  From January 2017 to April 2019, there were even fewer serious force incidents (454) in a comparable 28-month period. Moreover, the vast majority (83 percent) of all force used during the most recent 28-month period involved no greater than the lowest level of reportable force.  Further, out of all 2,252 uses of force, only 12 (or 0.5 percent) were determined to be out of policy.

Use of force against those experiencing behavioral crisis remains low and resolutions that result in a connection to services remain high.  And, as indicated in the report filed today, SPD reported that a Crisis Intervention Training-certified officer was on the scene for 82 percent of the 16,574 crisis contacts from January 2018 to April 2019. 

With respect to stops and detentions, the DOJ investigation revealed that SPD lacked a reliable way to track social contacts versus Terry stops.  One of DOJ’s requirements was better data collection and revised policies to mandate Terry stop reporting by SPD officers.  In mid-2015, SPD introduced its new Terry template, which allowed the department to better track this metric.  SPD is now able to track and determine whether stops and frisks had adequate reasonable suspicion, and, in the most recent review, SPD has sustained compliance with the requirements of the consent decree and maintained the high level of constitutionality in its stops found to be in place by the Monitoring Team and DOJ during Phase I of the consent decree period.  

 

Seattle – A 34-year-old Auburn, Washington man with a lengthy and violent criminal history was sentenced today to 17.5 years in prison for the June 28, 2016 shooting and wounding a law enforcement officer trying to arrest him.  RANDY LEE HALL shot a Department of Corrections officer who was working on a federal task force that linked HALL to a dangerous drive-by shooting in Seattle’s Capitol Hill neighborhood.  At the sentencing hearing, Chief U.S. District Judge Ricardo S. Martinez said, “there is no doubt in the court’s mind that he has shown no hesitation to use firearms on the streets of Seattle.”

“This defendant proved himself a menace – not only to the public, but to law enforcement officers working to keep all of us safe,” said U.S. Attorney Brian T. Moran.  “Strikingly, in this case, the officer switched from his firearm to a Taser to try to safely arrest Hall without bloodshed – and for that measured response, he was shot twice in the leg requiring surgery and a lengthy recovery period.”

According to records filed in the case, HALL was linked to a drive by shooting on April 23, 2016 at 14th Avenue and East Madison on Capitol Hill.  The shooting, just after 1:00 AM on a busy Saturday night, scattered pedestrians and broke windows at a Seattle University building and a nearby apartment.  Seattle Police officers recovered 46 shell casings at the scene.  The investigation revealed HALL had been driving the maroon SUV used in the shooting – it was HALL’s car, later found abandoned in West Seattle with two guns inside.  One of the guns used in the shooting was linked to nine other shootings – one of them a homicide.

HALL learned from a coconspirator that law enforcement was investigating him for the shooting.  As the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) was working on an arrest plan for HALL, he was tipped-off by an associate that police were looking for him.  On June 28, 2016, the arrest team made up of federal officers and deputized officers from the Washington State Department of Corrections (DOC), went to HALL’s apartment complex and waited for him to leave the apartment.  At about 3:00 PM, HALL was spotted walking to his car and the arrest team moved in with guns drawn.  Despite multiple instructions from police to get on the ground and show his hands, HALL got into his car and started the ignition.  As the arrest team moved in, a DOC officer holstered his gun and prepared his Taser.  Just as he fired his Taser at HALL, HALL raised his gun and fired twice at the officer and the agents behind him – striking the DOC officer in the leg twice.  The officers returned fire -- striking HALL in the shoulder – both men were hospitalized.

Chief Judge Martinez commended the officer who “tried to use less than lethal force.”  The judge ordered HALL to pay $86,803 in restitution for the officer’s medical bills.  Following prison HALL will be on supervised release for five years.

On March 25, 2019, HALL pleaded guilty to Assault on a person assisting federal officers, assault of federal officers and using a firearm during a crime of violence.

At the sentencing hearing, Assistant United States Attorney Todd Greenberg noted that, “By his own admission, HALL has been at the center of gang related violence in Seattle for years… He is a leader in the community of violence that he was participating in.”

HALL has prior convictions for robbery, felony domestic violence and possession of methamphetamine.

“The sentence handed down to Mr. Hall is a reflection of his blatant disregard for the rule of law and the lives of law enforcement officers,” said ATF Seattle Special Agent in Charge Darek Pleasants. “Sentences such as this one removes a violent offender from our streets and will hopefully serve as a deterrent to others.”

The case was investigated by the ATF Puget Sound Regional Gun Crime Task Force which includes officers from the Seattle Police Department and the Department of Corrections Community Response Unit.  The Auburn and Kent Police Departments assisted in the shooting investigation.  The case was prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.

Seattle – A Seattle man trafficking large amounts of cocaine in the Seattle area as a leader of a violent street gang was sentenced today in U.S. District Court in Seattle to 150 months in prison, announced U.S. Attorney Brian T. Moran. MICHAEL SCOTT MORGAN, 43, was arrested June 6, 2018, as part of a joint federal and state law enforcement effort targeting violent drug trafficking organizations.  At the sentencing hearing, U.S. District Judge Richard A. Jones said trafficking drugs is not a victimless crime. “Every time you put drugs in the community, that could begin a lifetime of addiction, a lifetime prison sentence or overdose and death,” Judge Jones said.

“Not only did this defendant lead a drug dealing organization moving huge amounts of cocaine, he and his gang members are linked to violence throughout the region,” said U.S. Attorney Moran. “One look at his personal arsenal, which included assault weapons, high capacity magazines and even a weapon designed to pierce ballistic vests, and you know he needs to be off the streets for a significant period of time.” 

According to records filed in the case, MORGAN is a leader of the East Union Street Hustlers street gang, a subset of the Black Gangster Disciples (BGDs).  During various surveillance activities in 2017 and 2018, law enforcement identified MORGAN as the leader of a group trafficking large amounts of cocaine, heroin, methamphetamine and other drugs.  The group was linked to violence, including shootings and an assault at a casino. 

Much of the drug proceeds were laundered through area casinos, with MORGAN depositing more than $750,000 between January 2017 and January 2018.

On the date of the drug takedown, in June 2018, law enforcement seized six firearms at MORGAN’s residence: a loaded Glock pistol with loaded spare magazines: a Smith and Wesson “Bodyguard” .380 semiautomatic pistol; a .38 caliber revolver; a combat shotgun; a loaded AK-47-style assault pistol and a PS-90 PDW (personal defense weapon) which fires rounds designed to puncture body armor.  Also at the residence, law enforcement seized 41 cell phones, $66,000 in cash, and jewelry valued at more than $265,000.

MORGAN has a lengthy criminal history, including firearms offenses as a juvenile and adult, drug offenses, forgery, eluding and assault.

On June 26, 2019, MORGAN pleaded guilty to conspiracy to distribute controlled substances, being a felon in possession of a firearm and money laundering.

In all, 42 defendants have pleaded guilty in connection with the drug trafficking conspiracy.  The most significant sentences in the case to date range from five years in prison to 11.5 years in prison.

This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.  This investigation was led by the Seattle Police Department Gang and Narcotics Units, FBI Seattle Safe Streets Task Force, and the Drug Enforcement Administration (DEA).  Other agencies providing investigative assistance include ATF, USMS, and the U.S Bureau of Prisons.

The case is being prosecuted by Assistant United States Attorneys Vince Lombardi, Erin Becker and Nicholas Manheim.

A sentencing exhibit with photos from the June 6, 2018 operation is attached to this release.

morgan_exhibit.pdf

 

Seattle – The U.S. Department of Justice and CH2M Hill have reached a $6.4 million settlement to resolve allegations that CH2M Hill overbilled the U.S. Air Force for environmental consulting work and then continued to overbill despite an audit highlighting the problem, announced U.S. Attorney Brian T. Moran.  At issue is the use of consulting staff who did not meet the minimum educational requirements of two Air Force contracts.

“We rely on those who apply for, and receive, government contracts to fulfill their end of the deal -- and that includes making sure that the personnel on the job are qualified for the job,” said U.S. Attorney Brian T. Moran. “As stewards of American's tax dollars, we need to make sure we get what we paid for.”

According to the settlement agreement, in 2017, CH2M Hill headquartered in Englewood, Colorado and with offices in Bellevue, Washington, reported an overpayment from the Air Force and paid the government $10,529,707.  The sum represents $8,323,179 in overbilling and $2,206,528 in interest between 2003 and 2014.   In connection with that agreement, CH2M Hill admits that it billed under the government contract for employees who did not meet the educational and work experience qualifications in the contract. 

The government contends that CH2M Hill knew of the overpayment as early as 2011, but attempted to keep the information secret by claiming that an audit of its labor practices was privileged information.  Under the law, the government is allowed to collect double damages, but due to statute of limitations constraints, that amount is capped at $6,400,000.

“This investigation highlights the patience and perseverance of the Air Force Office of Special Investigations’ Office of Procurement Fraud Investigations and our Department of Defense and Department of Justice partners, who work diligently day in and day out to identify and neutralize fraudulent activity affecting the DoD and our U.S. Government,” said Special Agent Anthony Walker, AFOSI Office of Procurement Fraud Investigations, Detachment 2. “No company or person who defrauds the U.S. Government is outside of the reach of justice.”

CH2M Hill is not admitting any wrongdoing with the settlement, which resolves all claims.

The case was investigated by the Defense Contract Audit Agency (DCAA) and the settlement was negotiated by Assistant United States Attorneys Kayla Stahman and Pooja Davé.

Seattle – Federal, state and local law enforcement fanned-out across the Puget Sound region today arresting 17 people in connection with multiple counts of drug trafficking, announced U.S. Attorney Brian T. Moran.  The drug trafficking organization brought large loads of heroin and methamphetamine into the Seattle area – in one instance law enforcement seized 33 pounds of meth and 14 pounds of heroin.

“Federal law enforcement continues to target those who seek to poison our communities and to line their pockets on the misery of others,” said U.S. Attorney Moran.  “I commend the men and women of law enforcement who put their lives on the line to stem those who traffic in violence, addiction and death.”

“At the height of the opioid epidemic, the Pacific Northwest is also drowning in methamphetamine,” said DEA Special Agent in Charge Keith Weis. “Today’s enforcement operation is another example of the focused effort by law enforcement against those transnational distribution cells most responsible for opening the floodgates.” He further added, “In the last year, DEA working with other federal, state and local law enforcement, have seized 3,400 pounds of methamphetamine, representing a record amount for the region.” 

The investigation into this criminal group began in September 2018 and utilized undercover purchases as well as various types of surveillance. 

Of those arrested, fourteen are indicted for conspiracy to distribute controlled substances.  Various individuals are indicted for specific instances of distributing methamphetamine, heroin or both. Three additional people were arrested and one of those people is charged by criminal complaint following today’s searches. Those indicted by the grand jury include:

Daniel Hernandez-Hernandez, 35, Seattle

Doriam German Moreno-Rocha, 29, SeaTac, Washington

Adrian Alberto Sanchez-Esparza, 30, Madera, California

Fernando Bautista-Sanchez, 43, Auburn, Washington

Angela Davina Encinas, 38, Auburn, Washington

Norberto Flores-Lopez, 22, Pacific, Washington

Faustino Islas-Estrada, 52, SeaTac, Washington

Omar Salazar, 32, Federal Way, Washington

Manuela Gabriele Zahn, 56, Olympia, Washington

Adam Mark Bishop, 35, Tacoma

Mitchell Eugene Vaughan, 33, Puyallup, Washington

Ryan Lee Isaksen, 28, Spanaway, Washington

Karissa Jean Mason, 36, Seattle

Anthony Jacques McKinney, 38, Lakewood, Washington

Luis Manuel Rivera-Leriget, 44, San Diego

Karina Rodriguez, 39, Newman, California

During today’s arrest operation law enforcement seized 4.5 pounds of meth and 13 pounds of heroin, $10,000 cash and six firearms. Over the course of the investigation, law enforcement seized 37.5 pounds of methamphetamine, 27 pounds of heroin and $40,000 in drug proceeds.

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 led by the Drug Enforcement Administration’s (DEA) Tacoma Resident Office and the Tahoma Narcotics Enforcement Team (TNET) and the Burien Police Department (BPD) Street Team. TNET is comprised of the Tacoma, Lakewood, Auburn, Bonney Lake, and Puyallup Police Departments, the Pierce County Sheriff’s Office and the Washington State Department of Corrections (DOC).  Other assisting agencies include the Kent Police Department and the King County Sheriff’s Office SeaTac Police Department Street Team.  The investigation was supported by North West High Intensity Drug Trafficking Area (NW HIDTA).

In addition to the agencies listed above, these law enforcement agencies assisted with the arrests and search warrants executed today: King County SWAT, Valley SWAT, Pierce County SWAT, Washington State Patrol SWAT, Lakewood Police Tactical Team, Valley Narcotics Enforcement Team (VNET), Joint Narcotics Enforcement Team (VNET), West Sound Narcotics Enforcement Team (WestNet), Lewis County Sheriff’s Office, Grays Harbor Sheriff’s Office, Hoquiam Police Department and Aberdeen Police Department.

The case is being prosecuted by Assistant United States Attorneys Andrew Colasurdo and Marci Ellsworth.

DEA Drug and cash seized in investigation

 

Seattle – U.S. Attorney Brian T. Moran announced today that the Washington State Patrol and the State Attorney General’s Office received four grants totaling nearly $5.3 million to reduce the backlog of untested rape kits and improve the scientific capacity of the state crime labs.

“In my long career as a prosecutor, I saw first-hand the value of DNA evidence to solve crimes and get violent predators off the street,” said U.S. Attorney Moran.  “DOJ understands that we cannot leave untested evidence languishing in storage.  These funds will help Washington keep up with the scientific advances in DNA that can both identify the guilty and exonerate the innocent.”

The Washington State Attorney General’s Office was awarded two grants: $1.5 million is directed at inventorying, testing and tracking unsubmitted rape kits and an additional $1 million was awarded to expand the collection of DNA from offenders and its submission to the Combined DNA Index System (CODIS).

The Washington State Patrol was awarded two grants totaling more than $2.7 million.  The largest grant, $1,857,667 is to increase the capacity of all the WSP crime labs, including equipping a new DNA section in the Vancouver, Washington crime lab.  One goal of the grant is to reduce the backlog of cases.  The second WSP lab grant for $920,951 is aimed at digitizing and storing some 480,000 case records currently archived in off-site storage so that they can more easily be accessed for investigation.

The grants were awarded by the Bureau of Justice Assistance and the National Institute of Justice.

For additional information on individual grants, please contact the recipient organizations.

Seattle – About $2 million in U.S. Department of Justice grant funding will flow into Washington State to bolster youth safety, combat gang activity and reduce racial disparities in the juvenile criminal justice system, announced U.S. Attorney Brian T. Moran. 

“These grants support efforts to intervene early and stop youth crime and violence before it damages our community,” said U.S. Attorney Moran.  “The grant to Seattle Public Schools may even save lives by stopping school violence before a tragedy happens.”

Seattle Public Schools was awarded $496,945 as part of the STOP School Violence Prevention and Mental Health Training Program.  The funding will provide students and teachers with training to recognize and respond quickly to violence and to prevent acts of violence.  The district will develop threat assessments and crisis intervention teams and an anonymous reporting system for threats, including those from people with mental health issues.

The Washington State Department of Social and Health Services received $872,897 for its work to reduce racial and ethnic disparities in the Washington State juvenile justice system.  DSHS’ Office of Juvenile Justice is partnering with the Center for Study and Advancement of Justice Effectiveness (a joint operation of the University of Washington and Washington State University) and the Washington State Center for Court research.  One goal is to build more culturally responsive and effective services into pre-court diversion.

The Children and Youth Justice Center received a $500,000 grant for its program to reduce gang related criminal activity.  The grant monies will be used to expand and enhance gang prevention, gang resistance and intervention programs, and to expand community awareness about gang violence and its negative effects.

Finally, King County received $171,026 in funding for the newly constructed Children and Family Justice Center.  The funding will focus on recruiting quality juvenile detention officers for the new facility.

For additional information on individual grants, please contact the recipient organizations.  A fact sheet from DOJ is attached to this release.

department_of_justice_invests_about_85.pdf

Seattle – A 27-year-old Kent, Washington, man was sentenced today in U.S. District Court in Seattle to five years in prison and three years of supervised release for two counts of making interstate threats.  CHASE BLISS COLASURDO made multiple online posts threatening members of President Trump’s family and media figures in Southern California and made threats to bomb synagogues.  COLASURDO, was arrested May 1, 2019 after he attempted to purchase a firearm. At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez said, “Mental illness may explain the intensity, but it does not excuse the actions that he took or the threats that he made instilling fear in his victims.”

“This case shines a spotlight on the frightening intersection of mental illness and weapons,” said U.S. Attorney Moran.  “I commend law enforcement who closely monitored this defendant so that he was arrested before he could commit any violent acts.  Supervision following prison is designed to stop him from such frightening threats and behavior in the future.”    

According to records in the case, in March 2019, a member of the public reported to the FBI concerns about Instagram and other social media posts where COLASURDO threatened to execute members of President Donald Trump’s family.  Additionally, COLASURDO sent messages to five different media organizations that he was going to execute the family member.  COLASURDO posted a photo on Instagram showing a hand with a firearm pointed at the photo of a Trump family member.  When initially contacted by law enforcement in March, COLASURDO claimed his social media accounts had been hacked.

Despite his statements that he was not responsible for the posts, COLASURDO continued to make threatening comments, specifically threats to members of the Jewish community.  In one post, he wrote it was time to start “bombing synagogues.”  Throughout April 2019, COLASURDO sent threatening email messages and online posts to media figures in Southern California using anti-Semitic slurs and threats to kill.  As law enforcement continued to track his activity, it became clear he was purchasing various items related to firearms, such as a holster, bulletproof vest, and ammunition.  COLASURDO attempted to purchase a firearm but was denied.

When law enforcement served search warrants at COLASURDO’s apartment, they recovered Nazi and Adolph Hitler related items, as well as ammunition, night vision goggles, and a gas mask.    

“People need to understand that such threats will be taken seriously,” Chief Judge Martinez said.  “It makes no difference to the victims that the person was mentally ill.”       

The case was investigated by the FBI and U.S. Secret Service, in conjunction with an investigation by the Los Angeles Police Department. Significant assistance was provided by the Sound Regional Violent Crimes Task Force. The case was prosecuted by Assistant United States Attorney Todd Greenberg

Seattle – Seven Seas Fish Company, Ltd of Richmond, BC Canada, and a company owner JOHN HERAS, 78, of Delta, B.C, pleaded guilty today in U.S. District Court in Seattle to importation of previously refused food.  The company and HERAS admit that between October 2014 and August 2015, they imported more than 9,000 pounds of potentially adulterated fish into the U.S.  The fish had previously been refused entry into the U.S., because the FDA judged samples of the fish too decomposed and putrid.  Seven Seas has agreed to pay a $150,000 fine.  HERAS could face to up to a year in prison when sentenced by U.S. Magistrate Judge Mary Alice Theiler on February 7, 2020.

According to records filed in the case, in June 2014, Seven Seas purchased 12,100 pounds of frozen corvina, a white fish similar to sea bass.  The fish was purchased for $36,375 from a seafood company in Mexico.  Seven Seas attempted to have the fish imported into the U.S. at the Otay Mesa Port of Entry.  However, when Food and Drug Administration (FDA) Consumer Safety Officers examined the fish, they determined that one third of the samples from the shipment were more than 20 percent spoiled.  The shipment was refused entry to the U.S. However, Seven Seas arranged for the fish to be lawfully shipped through the U.S. to its plant in Richmond, BC, claiming that the product would be distributed in Canada.

After the fish arrived in B.C., HERAS cooked and ate some of the fish and claimed he found nothing wrong with it.  Despite his knowledge that the fish had been refused entry to the U.S., HERAS encouraged others within Seven Seas to sell the fish to customers in Washington State and elsewhere.  Some 9,020 pounds of the fish was imported into the U.S. without the required notice to the Secretary of Health and Human services.

The FDA has not found any illness linked to those who consumed the fish.

Importation of previously refused food is punishable by up to a year in prison.  Prosecutors have agreed to recommend a probationary sentence for HERAS, but the ultimate sentence will be determined by Magistrate Judge Theiler based on the sentencing guidelines and other statutory factors.

The case was investigated by the FDA Office of Criminal Investigation, Customs and Border Protection (CBP) and Homeland Security Investigations.  The case was prosecuted by Assistant United States Attorney Matthew Diggs.

Seattle – U.S. Attorney Brian T. Moran announced Department of Justice grants for four organizations in Western Washington who are working to rescue and support victims of human trafficking.  The organizations work with young people and one has a special focus on Native American victims.

“I’m pleased that the Seattle Indian Health Board received funding under DOJ’s Project Beacon – designed to increase services for Native Americans living in urban areas,” said U.S. Attorney Moran.  “As we work to address the problem of Murdered and Missing Indigenous Women, developing services and informing the community about the scourge of sex trafficking is critically important.”

The Seattle Indian Health Board received a $450,000 grant to build a referral network for sex trafficking victims, to educate the public and to train providers about culturally appropriate treatment for Native victims of sex trafficking.

YouthCare in Seattle received a $571,307 grant to support victims of human trafficking.   YouthCare works with homeless, street-involved and sexually exploited youth ages 12-24. These funds are to provide case management, training and coordination among a variety of organizations serving young people.

Real Escape from the Sex Trade in Seattle’s Rainier Valley will receive a $500,000 grant to launch the Economic Leadership and Empowerment Academy to provide training in a job readiness program.  The program will be designed specifically for victims of sex trafficking, providing internships and employment placement as well as monthly leadership development workshops.

In Everett, Cocoon House received a $500,000 grant.  The grant will expand services for Snohomish County trafficking victims under age 18.  The organization plans to add a Human Trafficking Advocate and Program Coordinator so that it can provide services to at least 100 trafficked or at-risk youth.

For additional information on individual grants, please contact the recipient organizations.

Seattle – U.S. Attorney Brian T. Moran today announced significant grants to Western Washington counties and health departments to battle the opioid epidemic.  The Washington State Health Department, King County, Whatcom County, Skagit County and Pacific County were all awarded U.S. Department of Justice grant funding.

“Many of these grants are aimed at providing treatment and support to those who are reentering society after prison sentences,” said U.S. Attorney Moran. “With these funds DOJ is making a commitment to breaking the harmful cycle of substance abuse and incarceration.”

Pacific County in Southwest Washington was awarded two grants totaling $1,250,000 to focus on substance abuse and reentry from prison.  The bulk of the grant funds support the Pacific County Second Chance Reentry Program that works to reduce recidivism of individuals with substance abuse and mental disorders.

Whatcom County received a $900,000 grant to implement a Law Enforcement Assisted Diversion (LEAD) program to expand access to treatment and recovery support services in the criminal justice system.  The Whatcom County Prosecutor’s Office will partner with law enforcement, public defenders, the local health department and health care providers on diversion to treatment and supportive housing options. 

The Seattle King County Health Department was awarded $1.2 million to focus on treatment within the corrections system and the transition to community based substance abuse treatment options.  The support will assist those with substance abuse disorder as they leave prison and connect to community treatment providers.

Skagit County was awarded $997,407 to support innovative work in reentry from prison to the community.  The Jail to Community Transitions Program aims to reduce recidivism with data driven programs that focus on public safety.  The program is expected to serve 200 participants.

The Washington State Department of Health was awarded nearly $2 million to support its prescription monitoring program. The $1,996,316 grant will improve the monitoring of opioid prescriptions for educational and law enforcement purposes.

The Washington State Health Care Authority was awarded two grants totaling $222,637 to provide residential drug treatment in jails and prisons.

For additional information on individual grants, please contact the recipient organizations. 

Seattle – U.S. Attorney Brian T. Moran today announced more than $6 million in federal grant funds to support law enforcement officers and community safety in Washington.  Speaking at Microsoft for the 2019 Regional Conference for the Internet Crimes Against Children (ICAC) Task Forces, U.S. Attorney Moran congratulated the Seattle Police based ICAC  for successfully competing for a $606,404 grant to support ICAC investigations in 25 of Washington’s 39 counties.

“More than 100 partner law enforcement agencies are working with the Seattle based ICAC to investigate predators who are using the internet to lure children and steal their innocence,” said Moran.  “These grant monies are a tangible indication of how important our ICAC task forces are – they are literally saving children from predation and exploitation, and we owe the men and women who have devoted their professional lives to preventing these crimes a debt of gratitude.”             

The ICAC grant is just one of a number of grant awards to law enforcement at the state and local level to enhance public safety.  Just over $3.3 million was awarded to Washington State as part of the Edward Byrne Memorial Justice Assistance Grant program.  The monies will be funneled to state and local organizations supporting a variety of initiatives including anti-gang and drug task forces, crime prevention, and officer safety.

Other Byrne grants include: $672,410 to the City of Seattle; $290,738 to Tacoma; $96,127 to Clark County; $51,888 to Snohomish County; $35,915 to Kitsap County; $20,200 to Bremerton; $36,076 to Bellingham; $41,723 to Lakewood; $13,585 to Marysville; and $12,972 to Longview.

The Washington Association of Sheriffs and Police Chiefs were awarded two grants totaling $368,667 under the Project Safe Neighborhood program.  The grant monies are used to support gang task forces working to reduce violent crime, firearms offenses, human trafficking and drug trafficking.

Finally, under the National Officer Safety Initiatives Program, Polis Solutions of Seattle was awarded $750,000 to evaluate and update defensive training for state, local, tribal and territorial law enforcement agencies.  The grant is to develop a model defensive tactics training program that law enforcement agencies and academies can implement.

The Byrne Grants are named in honor of New York City Police Officer Edward R. Byrne, who was killed in the line of duty on February 26, 1988.  Officer Byrne was just 22-years-old.

For additional information on individual grants, please contact the recipient organizations. 

Seattle - A 14-count indictment was unsealed today charging a citizen of Singapore, HO JUN JIA, a/k/a Matthew Ho, 29, with federal crimes related to his scheme to mine cryptocurrencies using stolen computing power and services, obtained with the stolen identity and credit card account information of California and Texas residents, announced U.S. Attorney Brian T. Moran. HO was taken into custody by the Singapore Police Force on September 26, 2019, and is being investigated for various alleged offenses committed under Singapore law.

According to the indictment, between October 2017 and February 2018, following the surge in popularity, and value, of cryptocurrencies, HO ran a large-scale cryptocurrency mining operation, propelled predominantly, if not exclusively, through fraud and identity theft.  HO, allegedly used stolen identity and credit card information of a prominent California video-game developer to open cloud computing accounts at multiple U.S. cloud service providers, which he used to mine various cryptocurrencies, such as Bitcoin and Ethereum. HO created a web of phony email accounts and used social engineering techniques to trick cloud computing providers to approve heightened account privileges, increased computer processing power and storage, and deferred billing. 

HO used the fraudulently obtained computing power to mine cryptocurrency – a resource-intensive process by which “miners” essentially compete to verify blockchain transactions and receive an amount of cryptocurrency in return.  HO then used the cryptocurrency or exchanged it for traditional funds on various marketplace websites.  In the few months his scheme remained active, HO consumed more than $5 million in unpaid cloud computing services with his mining operation and, for a brief period, was one of Amazon Web Services (AWS) largest consumers of data usage by volume.  Some of the bills were paid by the California game developer’s financial staff before the fraud was detected.  HO also used the identities of a Texas resident and the founder of a tech company in India and, in addition to AWS, opened cloud services accounts with Google Cloud Services, which he similarly used as part of his cryptocurrency mining operation.

Wire fraud is punishable by up to 20 years in prison.  Access device fraud is punishable by up to ten years in prison.  Aggravated identity theft is punishable by a mandatory two years in prison to run consecutive to any other sentence imposed in the case.

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 Unit, with assistance from the Singapore Police Force - Technology Crime Investigation Branch, the Attorney General’s Chambers of Singapore, the U.S. Department of Justice’s Criminal Division’s Office of International Affairs, and the FBI Legal Attaché Office.

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

ho_indictment.pdf

Ten Indian Tribes in Western Washington have been awarded nearly $13 million in U.S. Department of Justice grant funding to enhance criminal justice and safety in their communities, announced U.S. Attorney Brian T. Moran.  One notable grant will fund a Special Assistant U.S. Attorney to work with the FBI’s Northwestern Washington Safe Trails Task Force to prosecute crime in tribal communities. The $482,419 three-year grant was awarded to the Swinomish Tribal Community, though the attorney will prosecute cases for a consortium of tribes located in northwest Washington.

“These grants provide a wide range of services in our tribal communities – everything from services for crime victims, to sex offender monitoring, to reducing alcohol and drug related crime,” said U.S. Attorney Moran.  “It is a competitive process to obtain these grants, and I congratulate our tribal partners on their successful applications.”

The Lummi Indian Nation in Bellingham was awarded four grants totaling $2.5 million.  The funded programs include: $748,608 to enhance tribal justice programs and reduce Alcohol and substance abuse related crime; $720,000 to support crime victims; $374,994 to support programs to reduce Elder Abuse; and $720,000 to hire a tribal attorney and advocate to assist crime victims with civil litigation.

The Swinomish Tribal Community in La Conner was awarded four grants totaling $1.4 million.  In addition to the $482,419 for a designated attorney, the Tribe was awarded two additional grants totaling  $802,205 to support services for crime victims.  An additional grant of $134,267 will pay for personnel to enter 10 years of historical data into the nationwide National Criminal Background Check System.

Tulalip Tribes of Washington was awarded three grants totaling $1.5 million.  A $643,871 grant will enhance the tribes family drug court program working to get parents into treatment and reunite families. Two additional grants totaling $926,845 will got to support services for victims of crime.

Port Gamble S’Klallam Tribe in Kingston was awarded three grants totaling nearly $1.5 million:  An $898,000 grant to enhance the tribal justice system; $491,542 to support victims of crime; and $108,750 to enhance sex offender monitoring.

Puyallup Tribe of Indians were awarded two grants: $783,873 to improve the Tribal justice system and $717,292 to support victims of crime.

The Makah Tribe in Neah Bay was awarded $498,796 to support their drug court and $719,528 to support victims of crime.

The Confederated Tribes of Chehalis Reservation in Oakville were awarded $750,000 to strengthen their tribal justice system and $369,213 to support services for crime victims.

The Skokomish Indian Tribe was awarded $374,633 to improve their sex offender monitoring program and $488,978 to improve services for crime victims.

The Hoh Indian Tribe in Forks was awarded $514,778 to expand victim services with a special focus on educating the community on human trafficking and Missing and Murdered Indigenous Women and Girls.

The Quinault Indian Nation in Taholah was awarded $480,187 to enhance victim services.

The grants were awarded by a variety of DOJ agencies including the Office of Victims of Crime, the Bureau of Justice Assistance and the Office of Juvenile Justice and Delinquency Prevention.

For additional information on individual grants, please contact the recipient organizations. 

The U.S. Department of Justice has awarded grants totaling more than $9.8 million to support victims of domestic violence and sexual assault in Western Washington, announced U.S. Attorney Brian T. Moran.  The grants run for the next one to three years, and some are supporting services in Tribal and Latino communities, as well as in rural areas.

“October is domestic violence awareness month, and an appropriate time to highlight the good work being done in our state to assist victims of domestic and sexual violence,” said U.S. Attorney Brian T. Moran.  “In successfully competing for these grant dollars, these programs are demonstrating leadership on making a difference in their communities.”

The grants awarded over the last month include:

• $500,000 to the City of Longview, Wash., to improve criminal justice services to victims of domestic violence and sexual assault.  The funding will pay for a domestic violence detective for Longview Police, as well as a domestic violence advocate and special training for prosecutors on domestic violence cases;
• $285,500 for Consejo Counseling and Referral Services of Seattle to provide culturally appropriate services to the Latino community;
• $285,500 to the Seattle Indian Health Board to provide culturally appropriate services to Urban Native survivors of violence and sexual assault;
• $450,000 to the Crisis Support Network in Raymond, Wash., to provide 30 housing units to survivors of domestic violence and sexual assault; and
• $437,192 to Turning Pointe Survivor Advocacy Center in Shelton, Wash., to work with the Shelton Police Department and Mason County Prosecutor’s Office to provide assistance to children exposed to domestic violence.

Five Indian Tribes received grants to strengthen their criminal justice programs for dealing with domestic violence and for providing support and resources for victims.  Two tribal coalitions based in Western Washington also received grants.  These include:

• $826,017 to the Confederated Tribes of the Chehalis Reservation;
• $450,000 to the Lummi Indian Nation;
• $302,979 to the Suquamish Indian Tribe of the Port Madison Reservation;
• $450,000 for the Nooksack Indian Tribe;
• $900,000 for the Cowlitz Indian Tribe;
• $323,007 to Washington State Native American Coalition Against Domestic Violence in Silverdale, Wash.; and
• $500,000 to Alliance of Tribal Coalitions to End Violence in Silverdale, Wash.

Finally, a number of local organizations will be supported with grant money that is funneled through the state and coalitions of nonprofit organizations:

• $90,975 to Washington State Coalition Against Domestic Violence;
• $151,242 to Washington Coalition of Sexual Assault programs; and
• $3.9 million be distributed through the Washington Department of Commerce to programs that encourage cooperation between law enforcement, prosecutors, courts and victim services to support victims of domestic violence and sexual assault.  Some of these funds also support rape crisis centers and non-profits working with victims.

All of the grants were awarded by DOJ’s Office of Violence Against Women.  For additional information on individual grants, please contact the recipient organizations. 

Seattle – A former Washington State football player who had brief stints with two NFL teams was sentenced today to one year in prison for his kickback scheme that defrauded his employer of $1.5 million.  AUGUSTINE OLOBIA, 49, of Hurst, Texas, pleaded guilty in April 2019 to wire fraud, admitting he took kickbacks for falsifying data on account referrals while he was employed at ShareBuilder.  At the sentencing hearing, U.S. District Judge Robert S. Lasnik told him, “You made a severe mistake… You were taking too much pride in things that didn’t matter.”

According to records filed in the case, OLOBIA worked at ShareBuilder in Seattle from 1999 to 2013.  OLOBIA was responsible for managing the third-party vendors who advertised ShareBuilder’s services.  Those vendors were paid on a “bounty system.”  For example, ShareBuilder paid Tega Creative $40-$55 per account that was opened after a customer opened a brokerage account at ShareBuilder as a result of Tega Creative’s marketing efforts.  OLOBIA manipulated data in ShareBuilder’s computer system to vastly inflate the number of account openings attributable to Tega Creative’s marketing.  Then he approved invoices issued by Tega Creative that were based on the inflated numbers.  For example in 2007, Tega Creative was credited with about 2,000 account openings.  In 2008, as a result of the fraud, Tega Creative was credited with 10,000 account openings.  OLOBIA was secretly paid about one-third of the gross monthly payment from ShareBuilder to Tega Creative.  The loss to ShareBuilder’s owner, Capital One, is estimated at more than $1.5 million.

The scheme was uncovered when OLOBIA left ShareBuilder and other employees tried to reconcile the number of accounts attributed to Tega Creative.  

In asking for the prison sentence, prosecutors noted that OLOBIA had a fortunate upbringing as a child in Nigeria, and later as a member of the Nigerian Olympic team.  He was a recruited athlete at a university in Houston and later as a football player at WSU.  He graduated with a degree in business administration and held a number of good jobs.  Despite those advantages, OLOBIA engaged in a fraud that lasted about five years and cost his employer $1.5 million.

In addition to the prison term, Judge Lasnik ordered OLOBIA to forfeit $500,000 – the amount he gained from the scheme.  Restitution will be determined at a hearing on December 6, 2019.

The case was investigated by the FBI.  The case is being prosecuted by Assistant United States Attorney Michael Dion.

Tacoma – An Olalla, Washington man is under arrest on a criminal complaint charging him with aggravated identity theft and access device fraud for his scheme to steal the identity and income of his missing brother.  CHRIS HARVEY SAYLER, 72, allegedly began fraudulently collecting his missing brother’s Social Security Disability benefits by at least 1998.  Over the last twenty years, those benefits total more than $400,000.  SAYLER made his initial appearance on the criminal complaint in U.S. District Court in Tacoma today. He remains detained pending a further hearing on Friday October 4, 2019.

According to the complaint, CHRIS SAYLER’s brother, Jarvis L. Sayler, traveled from his home in Missouri to the Vancouver, Washington area in 1988.  He told relatives that he planned to visit CHRIS SAYLER, then return to Missouri to build a home on property there.  Jarvis Sayler was born with partial eyesight, and had been receiving Social Security disability benefits since 1977.  Jarvis Sayler wrote a few letters to Missouri between June and September 1988, but that was the last anyone heard from him.  A third brother in Missouri reported Jarvis Sayler missing in March of 1989.  The Clark County Sheriff’s Office interviewed CHRIS SAYLER about his brother’s whereabouts.  SAYLER claimed his brother moved from his home after the two had an argument. That was the last reported sighting of Jarvis Sayler.

In 2013, a person claiming to be Jarvis Sayler attempted to renew a Washington State ID card, but the renewal was denied because facial recognition software indicated the person in the ID photo was the same as in a drivers license photo of  CHRIS SAYLER. When SAYLER went to a Department of Licensing Office to renew a license (in the SAYLER name) years later, he claimed that he and Jarvis were twins and that was the reason for the facial recognition report.  The clerk pointed out that the two men’s birthdates were four years apart, but SAYLER said it is a “rare twin situation” that does occur.  The investigation has revealed that SAYLER and Jarvis Sayler are not biologically related. 

In 2019, the Department of Licensing referred the matter to the Social Security Office of Inspector General (SSA-OIG) for investigation.  The investigation revealed that as early as 1998, SAYLER’s photo appears on Jarvis Sayler’s identification card and that the addresses on Jarvis’ cards and other identifying documents are associated with SAYLER. 

Since at least 1998, Jarvis Sayler’s Social Security benefits went to a bank account opened with an address in Vancouver, Washington.  When SAYLER moved to Olalla, the address on the account was updated to the new address as well. ATM withdrawal records and debit card records from retailers such as Costco and Fred Meyer show SAYLER withdrawing money or making purchases with the debit card associated with Jarvis Sayler’s account.

Access device fraud is punishable by up to ten years in prison.  Aggravated identity theft is punishable by a mandatory minimum two-year sentence to run consecutive to any other sentencing in the case.

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 Clark County Sheriff’s Office is interested in hearing from anyone who has information on Jarvis Sayler and his disappearance.  Contact Detective Jon Shields at 564-397-2120. 

The case is being investigated by the Social Security Office of Inspector General (SSA-OIG), Health and Human Services Office of Inspector General (HHS-OIG), and Homeland Security Investigations (HSI) as part of the Document and Benefit Fraud Task Force in Seattle. Investigative assistance was also provided by the FBI and Sheriff’s Offices for Clark County, Cowlitz County, and Kitsap County.

The case is being prosecuted by Special Assistant United States Attorney Benjamin Diggs.  Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.

sayler_complaint_0.pdf

 

A Bellingham, WA man was charged in federal court today with two drug crimes related to cocaine and heroin found in his apartment, announced U.S. Attorney Brian T. Moran.  TONY LEE WILLIAMS, 33, was arrested this morning following an investigation by the Lummi Tribal Police and the FBI.  The investigation began late yesterday, when medics responded to a home on the Lummi reservation where a woman was unresponsive.  The woman could not be revived with NARCAN and is deceased.  Pills ingested by the woman are linked to those sold by WILLIAMS.  Lab analysis of the pills is underway to determine whether they are tainted with a substance such as fentanyl.

“It is critically important that the word go out about these potentially deadly pills,” said U.S. Attorney Brian T. Moran. “Right now we don’t know whether the pills are directly connected to the death.  However, anyone buying street pills that appear to be oxycodone 30s – like those described in this case -- could be risking his or her life by ingesting them.”

The pills were sold to those associated with nightclubs in Bellingham, as well as on the Lummi Reservation.

WILLIAMS is charged with possession of cocaine with intent to distribute and possession of heroin with intent to distribute.  According to the criminal complaint, WILLIAMS sold the pills to a brother and sister who distributed them to others.  When law enforcement searched WILLIAMS’ apartment, they recovered cocaine, heroin, and 30 additional pills that appear to be oxycodone.

The drug crimes are 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 prosecuted by Assistant United States Attorneys Rebecca Cohen, Chantelle Dial, and J. Tate London.

williams_complaint.pdf

Seattle – Two former Hood Canal area residents are under arrest on an indictment charging eight federal felonies related to their scheme to steal the wood of big leaf maple trees from Olympic National Forest, announced U.S. Attorney Brian T. Moran.  The indictment alleges that between April and August 2018, JUSTIN ANDREW WILKE and SHAWN EDWARD WILLIAMS felled and sold publicly-owned maple trees.  The indictment alleges that, in August 2018, the defendants started a forest fire when they set fire to a bee’s nest in a tree they were trying to unlawfully harvest from the National Forest land.  The resulting fire – known as “The Maple Fire” – burned more than 3,300 acres between August and November 2018 and cost approximately $4.5 million to contain. 

According to the indictment, as early as April 2018, the defendants traveled into areas of the Olympic National Forest to scout for big leaf maple trees that might contain ‘figured’ wood – wood that is highly prized for musical instruments.  The men looked for maple trees they could steal in areas around Elk Lake and Lena Lake.  The men then cut the maple trees, took blocks of wood from the trees to a property near Lilliwaup, Washington, and sold the blocks to a lumber mill in Tumwater, Washington.  The conspirators presented the mill owner with permits claiming the maple had been harvested on private land, when in fact it had been illegally cut and stolen from the National Forest.

In early August 2018, after selling thousands of dollars’ worth of maple to the mill, WILKE and WILLIAMS identified a big leaf maple they wanted to steal.  However, the large tree contained a bee’s nest, which made it difficult to fell.  After unsuccessfully attempting to get rid of the bees with wasp killer, the men decided to kill the bees by burning the nest.  WILKE poured gasoline on the nest and lit it on fire.  The men tried to put the fire out with water bottles but were unsuccessful.  The fire grew into a 3,300-acre forest fire, damaging public lands in Olympic National Forest and costing $4.5 million to extinguish.

WILKE is charged with eight federal felonies: Conspiracy; two counts of depredation of public property; theft of public property; trafficking in unlawfully harvested timber; attempted trafficking in unlawfully harvested timber; setting timber afire; and using fire in furtherance of a felony.  WILLIAMS is charged with conspiracy, depredation of government property, and attempted trafficking in unlawfully harvested timber.

WILKE will appear in U.S. District Court in Tacoma at 2:30 today.  WILLIAMS is in state custody in California.

Conspiracy, setting timber afire, and trafficking in unlawfully harvested timber are each punishable by up to five years in prison and a $250,000 fine.  Theft of public property and depredation of government property are punishable by up to ten years in prison and a $250,000 fine.  Using fire in furtherance of a felony is punishable by a mandatory ten-year sentence of imprisonment.

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 was investigated by the United States Forest Service.  The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson and Will Dreher.

wilke-williams_indictment.pdf

Seattle – A former Seattle resident who relocated to Laguna Niguel, California in the midst of his fraud scheme, was sentenced today in U.S. District Court in Seattle to 30 months in prison for mail fraud, announced U.S. Attorney Brian T. Moran.  Between 2011 and 2014, TROY CLINTON VAN SICKLE, 48, fraudulently operated an asset recovery business that defrauded unhappy investors who previously had lost money they had invested with a Bellevue investment company.  At sentencing, U.S. District Judge James L. Robart found that VAN SICKLE,  had been living a life of crime since he was 21, and had shown no respect for the law. 

According to records filed in the case, during May and June 2011, VAN SICKLE represented to the unhappy investors that he had a company, Troy C. Van Sickle Consulting and Collections, and that for a fee he could help them recover their lost funds.  VAN SICKLE falsely claimed that he had helped other investors recover large sums, and, in order to win investors’ trust, VAN SICKLE made various promises, including entering into a romantic relationship with one of the investors. 

In February of 2012, VAN SICKLE moved to California.  After he moved, VAN SICKLE’s agent told the investors that if they loaned him $75,000, he would (1) use the money in order to recover their lost investment, and (2) repay the $75,000 in 30 days.  In fact, VAN SICKLE planned to use the money for his own purposes, including paying his rent through the end of the year, and did not intend to repay the investors.  In July 2013, after one of the investors who loaned VAN SICKLE funds repeatedly sought the return of the money he loaned VAN SICKLE, VAN SICKLE sent the investor an invoice with false charges purporting to explain how VAN SICKLE had used the loaned funds in order to try to recover the investor’s funds.

Over the course of the scheme, VAN SICKLE fraudulently took in $75,000.  Under the terms of the Plea Agreement, in addition to repaying the investors that $75,000, VAN SICKLE has agreed to repay the investors an additional $175,000 in funds that he received from the investors. 

The case was investigated by the FBI and the Washington State Department of Financial Institutions.  The case is being prosecuted by Assistant United States Attorneys Arlen Storm and Andre Penalver

Seattle – An Enumclaw, Washington couple were charged in U.S. District Court in Seattle today in connection with their six-year scheme to divert more than $400,000 in local tax dollars to their own use, announced U.S. Attorney Brian T. Moran. ALLAN B. THOMAS and JOANN E. THOMAS are scheduled to appear on the federal charges in U.S. District Court in Seattle at 2:00 p.m. today.

According to the criminal complaint, ALLAN B. THOMAS served as Commissioner for Drainage District 5 in King County for more than 35 years.  As a commissioner, THOMAS was involved in estimating the costs of drainage maintenance for the district so that the county auditor could set and assess the appropriate taxes. The Commissioners then authorized payment to service providers who were supposed to do maintenance work on the drainage system.

As early as 2012, JOANN THOMAS set up a joint bank account with ALLAN THOMAS’ son from a previous marriage.  The account was a business account for a company called A C Services.  Over the next six years, ALLAN THOMAS had $413,323 of local tax dollars paid to A C Services claiming it was for drainage ditch maintenance.  However, THOMAS’ son said other than two small jobs performed in 2012, he did not perform any drainage ditch work.  Financial records indicate that over the six years, shortly after the tax dollars were deposited into A C  Services account, the money was quickly transferred to other accounts belonging to the THOMASES, or was used to pay their expenses for such things as hay, mortgage payments, or property taxes.  More than $70,000 was withdrawn as cash.

In 2018, after the couple became aware of an investigation into their conduct, they began funneling the tax dollars through another company: City Biz.  The couple submitted warrants for City Biz to be paid for drainage maintenance work and within days of the funds arriving in City Biz bank accounts, nearly all of the money was transferred directly to ALLAN THOMAS or the THOMASES’ dairy farm.  In all the criminal complaint alleges the THOMASES defrauded taxpayers of $468,165.

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.

Mail fraud is punishable by up to 20 years in prison and a $250,000 fine.

The FBI and IRS - Criminal Investigation are leading the investigation with assistance from the Enumclaw Police Department.  The Enumclaw City Attorney initiated the review of the district finances.   The Washington State Auditor’s Office also conducted an audit of the district in 2019.    The King County Prosecuting Attorney’s Office, in consultation with the U.S. Attorney’s Office, determined the case was appropriate for federal prosecution.

The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Andrew Friedman.

thomas_complaint.pdf

SEATTLE – One of two men who robbed a marijuana store at gunpoint was sentenced today in U.S. District Court to 138 months in prison and five years of supervised release for three federal felonies. ERIC HENRY WOODBERRY, 23, was convicted in June 2019, of robbery, possession of marijuana with intent to distribute and aiding and abetting possession of a firearm in furtherance of a crime of violence and a drug trafficking crime.  At the sentencing hearing U.S. District Judge Richard A. Jones said, the robbery was a “very aggressive, very violent action on your part… (the victims) were terrified.”

According to records in the case and testimony at trial, WOODBERRY and co-defendant Bradford M. Johnson robbed Rainier Cannabis in Mountlake Terrace, Washington on November 21, 2017.  The men entered the store carrying a stolen short-barreled rifle and a handgun.  Both wore masks.  They forced the employees onto the floor, took their phones and then ordered two of the employees to fill large bags with marijuana products and cash.  When they saw police arriving at the front of the store, they ran out the back and attempted to hide from police in the nearby neighborhood.  With the assistance of a police tracking dog, officers located WOODBERRY hiding in a boat trailered next to a house a few blocks from the store.  Johnson was located a short time later.

Court records detail two other robberies and a Seattle robbery/burglary linked in police reports and state charging documents to WOODBERRY.

Johnson is scheduled for sentencing on November 22, 2019.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Mountlake Terrace Police Department, with assistance from the Lynnwood Police Department, Edmonds Police Department, Everett Police Department, King County Sheriff’s Office, and Washington State Patrol.

The case is being prosecuted by Assistant United States Attorneys Erin H. Becker and Stephen P. Hobbs.

 

SEATTLE - A former project manager for Portland, Oregon-based shipbuilder Vigor Marine LLC, pleaded guilty today to wire fraud related to his scheme to defraud his employer out of approximately $1.5 million, announced U.S. Attorney Brian T. Moran.  SHELTON LAYNE SMITH, 50, of Portsmouth Virginia, is scheduled to be sentenced by U.S. District Judge Robert S. Lasnik on December 19, 2019.

According to records in the case, in 2016 and 2017, SMITH served as the project manager on the renovation of two U.S. Coast Guard cutters called the “Bertholf” and the “Waesche.”  The renovations took place at Vigor’s Seattle facility. SMITH was responsible for selecting vendors and approving payments to them for equipment and services related to the renovations.  In this role, SMITH fabricated invoices from a fictitious company called “Marine Service Solutions” (MSS).  The fraudulent invoices caused Vigor to pay out approximately $1.5 million for work that was never done and equipment that was never provided. 

SMITH’s scheme to defraud was an elaborate charade.  SMITH persuaded a legitimate Vigor vendor to serve as a “pass-through” entity that received invoices from MSS, marked up the cost of the services, and passed on the fraudulent expenses to Vigor.  The local vendor was not aware that Marine Service Solutions was not a real company.  SMITH also misled a long-time acquaintance in Mississippi into setting up a bank account for MSS, cashing the checks, and funneling most of the proceeds to SMITH.  In emails, SMITH posed as the Mississippi man, making it appear as if the Mississippi man was the owner of MSS. When questioned by the FBI, SMITH repeatedly lied about MSS and encouraged his acquaintance in Mississippi to stick to a false story about the company.

Vigor terminated SMITH in 2017 after discovering that SMITH had mishandled the Bertholf project.  SMITH’s successor discovered the fraud, and Vigor reported the crime to the FBI. 

SMITH has agreed to make restitution to Vigor of $1,483,802. As part of that restitution he will forfeit his right, title, and interest in any and all property, real or personal, that constitutes or is derived from proceeds traceable to the offense of Wire Fraud.

Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.  The ultimate sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

The case is being investigated by the FBI.  The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

 

          The former CEO of two Bellevue, Washington information-technology (IT) firms was sentenced today in U.S. District Court in Seattle to 87 months in prison for mail fraud and tax crimes related to a multi-year visa-fraud scheme, announced U.S. Attorney Brian T. Moran.  PRADYUMNA KUMAR SAMAL, 50, a citizen of India, was arrested in August 2018 when he arrived on an international flight at Sea-Tac Airport.  Prior to the arrest, SAMAL had fled the U.S. in the midst of the visa fraud investigation.  He has been in custody since his arrest last year.  At the sentencing hearing U.S. District Judge James L. Robart said “Based on your time in the U.S. you have basically defrauded everyone you could defraud…. It is clear you have not followed the law since you came to this country. You engaged in an extensive scheme…. This was driven by greed: nothing more, nothing less.” 

            “This was the largest and most sophisticated H-1B visa fraud scheme we have prosecuted in Western Washington,” said U.S. Attorney Brian Moran.  “The fraud harmed the workers who wound up far from home, essentially “benched” by the company, with no pay and no job.  It harmed foreign workers who legitimately sought, but could not get visas, and it harmed U.S. workers who were excluded from employment opportunities.”

          According to records filed in the case, two companies incorporated by SAMAL in 2010 and 2011, engaged in a scheme sometimes referred to as a “bench-and-switch” scheme, to exploit foreign-national workers, compete unlawfully in the market, and defraud the U.S. government.  According to the investigation that began in 2015, SAMAL served as the Chief Executive Officer of ‘Divensi’ and ‘Azimetry.’  Both companies were in the business of providing information-technology workers, such as Software Development Engineers, to major corporate clients.  SAMAL submitted, and directed his employees to submit, forged and false application materials to the United States government, making it appear as if foreign-national employees named in the petitions had been earmarked for projects contracted to SAMAL’s companies by end clients.  In fact, these project assignments were fictitious.  The forged documents included forged letters and fraudulent statements of work, which appeared as if they had been signed by senior executives at SAMAL’s clients.  After USCIS relied on the false representations and approved the applications, SAMAL’s companies “benched” the foreign nationals – i.e., the companies left those foreign nationals unpaid, and forced them to submit phony sick and annual leave requests – until and unless they were able to place those employees at actual end clients. 

          More than 250 workers were brought in under the phony applications.  The employees were forced to pay SAMAL’s companies a partially-refundable “security deposit” of as much as $5,000 for the visa filings, regardless of whether they were assigned to any projects that provided them with income.

                "This sentence punishes a sophisticated offender who fraudulently manipulated the U.S. visa process to exploit foreign-national workers, compete unlawfully in the market, and defraud the U.S. government,” said Matthew Perlman, Special Agent in Charge, U.S. Department of State’s Diplomatic Security Service, San Francisco Field Office.  “The Diplomatic Security Service is committed to ensuring the integrity of the visa process, securing the homeland, and protecting the American work force.”

          Not only did SAMAL’s companies fail to pay the clients, it failed to pay more than $1 million in employment taxes.  SAMAL has agreed to pay restitution of $1,119,867 for the tax loss.  In addition Judge Robart imposed a $10,000 fine.

            “Mr. Samal exploited foreign nationals for personal gain while also stealing $1.1 million from his employees' payroll withholdings to fund his luxury car, his mortgage, and his personal accounts in India,” said IRS-Criminal Investigation Special Agent in Charge Justin Campbell. “IRS-Criminal Investigation continues to prioritize employment tax fraud in order to protect hard-working employees and serve honest taxpayers.”

            The case was investigated by the U.S. State Department’s Diplomatic Security Service (DSS), Homeland Security Investigations (HSI) and the Internal Revenue Service Criminal Investigation (IRS-CI).  The case is being prosecuted by Assistant United States Attorneys Siddharth Velamoor and Michael Dion.

          A Bellingham, Washington woman who used her employee access to steal $200,000 from the Lummi Nation’s Silver Reef Casino was sentenced today in U.S. District Court in Seattle to time-served (approximately 10 months in prison) and two years of supervised release, announced U.S. Attorney Brian T. Moran.  SHANNON MARIE MORRIS is a Lummi Tribal member and was an employee of the casino on November 24, 2018, when she stole $200,000 from the vault at the casino.  Hours after the theft, MORRIS led law enforcement to where she had stashed the cash, but not before making a false report about a bomb in the casino that forced the evacuation of the casino and adjacent hotel.  At the sentencing hearing, U.S. District Judge Richard A. Jones noted that MORRIS placed her young son in harm’s way and adversely impacted the lives of a lot of people due to the bomb scare.

            According to records filed in the case, it was just before 3:00 AM on November 24, 2018 when MORRIS walked into the employee entrance at the rear of the casino and got another employee to let her into the cash vault.  MORRIS filled a bag with four bricks of cash totaling $200,000 and told the employee in the vault not to push the panic button.  MORRIS ran from the vault, got in her car and drove away.  MORRIS called 9-1-1 claiming that a man with a gun had forced her to rob the casino and that the man claimed to have placed a bomb at the casino which he would trigger if she did not steal the money.  MORRIS claimed the man had jumped out of her car with the money.

            Because of the report of a bomb, law enforcement from the Lummi Nation, Bellingham and Ferndale Police Departments, the FBI and the Whatcom County Sheriff’s Department evacuated the hotel and casino.  No bomb was located.

            While being questioned by law enforcement, MORRIS’ statement changed over time: initially she claimed that a strange man with a gun held her and her child hostage and forced her to steal the money from the casino.  Later she admitted she was alone in the vehicle with her child when she drove to the casino and stole the money.  MORRIS led the investigators to the location in Ferndale where she had hidden the money near a tree at the side of the road.

            While the money was recovered, the Lummi Nation still lost money due to the evacuation of the hotel and casino on a busy holiday weekend.  The funds generated by the hotel and casino are used to provide services to the tribal members and their families.

            On December 12, 2018, MORRIS was indicted for theft by an employee of a gaming establishment on Indian lands.  She pleaded guilty to that charge on June 12, 2019.

            The case was investigated by the Lummi Nation Police Department and the FBI, with assistance from the Whatcom County Sheriff’s Office.

            The case was prosecuted by Assistant United States Attorney J. Tate London

          The former owner of Johnny’s Bar and Grill in Puyallup, Washington, pleaded guilty today in U.S. District Court in Tacoma to possession of methamphetamine with intent to distribute, announced U.S. Attorney Brian T. Moran.  JOHN CHOE admits in his plea agreement that, in January 2018, he obtained methamphetamine, cocaine, and heroin from his sources and began selling them to customers at his bar.  Between January 2019 and April 2019, CHOE sold cocaine to a person working with law enforcement on four different occasions.  The Washington State Liquor and Cannabis Board suspended the bar’s liquor license on June 19, 2019.  Judge Benjamin H. Settle scheduled sentencing for December 16, 2019.

            According to the facts admitted in the plea agreement, the Drug Enforcement Administration (DEA) and state and local law enforcement began investigating CHOE after receiving information about drug sales at the bar.  After the confidential informant and an undercover DEA agent purchased a total of 45 grams of cocaine on four different occasions, law enforcement served a court-authorized search warrant for the bar and for CHOE’s vehicle.  Agents found methamphetamine, heroin, synthetic cannabinoids, and Percocet pills in a metal box at the bar.  When CHOE was arrested, he was carrying cocaine.  CHOE admits all the drugs were for distribution.

            Possession of methamphetamine with intent to distribute is punishable by up to 40 years in prison and a $5,000,000 fine.  Under some circumstances, the charge carries a mandatory minimum five-year prison term.  The ultimate sentence will be determined by the Court based on the advisory Sentencing Guidelines and other statutory factors.

            The case was investigated by the DEA’s Tacoma Narcotics Enforcement Task Force (TNET), in collaboration with the Puyallup Police Department.  The case is being prosecuted by Assistant United States Attorney Seungjae Lee.

WASHINGTON – A North Carolina man was sentenced today to two years in prison, to be followed by five years of supervised release, for abusive sexual contact with a minor, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Brian T. Moran of the Western District of Washington announced.

          Joseph Robertson, 38, of Sanford, North Carolina, pleaded guilty on June 6, to one count of abusive sexual contact before U.S. District Court Judge Ronald B. Leighton of the Western District of Washington, who sentenced him earlier today.

          According to facts admitted by the defendant during his guilty plea, Robertson was employed by the Department of Defense as a child and youth program assistant at Ramstein Air Force Base in Germany.  During the summer of 2016, while accompanying children from the Ramstein youth center to a swimming pool in a nearby town, Robertson engaged in abusive sexual contact with a minor who was 13-14 years old on multiple occasions, including touching the minors genitals over the minor’s clothing.

          The investigation of the case was conducted by U.S. Air Force Office of Special Investigations and the FBI, led by Seattle Division’s Tacoma Resident Agency Child Exploitation Task Force.

         This case is being prosecuted by Trial Attorney Kaylynn Foulon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Grady Leupold of the U.S. Attorney’s Office in the Western District of Washington.

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

A North Carolina man was sentenced today to two years in prison, to be followed by five years of supervised release, for abusive sexual contact with a minor, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Brian T. Moran of the Western District of Washington announced.

Joseph Robertson, 38, of Sanford, North Carolina, pleaded guilty on June 6, to one count of abusive sexual contact before U.S. District Court Judge Ronald B. Leighton of the Western District of Washington, who sentenced him earlier today.

According to facts admitted by the defendant during his guilty plea, Robertson was employed by the Department of Defense as a child and youth program assistant at Ramstein Air Force Base in Germany.  During the summer of 2016, while accompanying children from the Ramstein youth center to a swimming pool in a nearby town, Robertson engaged in abusive sexual contact with a minor who was 13-14 years old on multiple occasions, including touching the minor's genitals over the minor’s clothing.

The investigation of the case was conducted by U.S. Air Force Office of Special Investigations and the FBI, led by Seattle Division’s Tacoma Resident Agency Child Exploitation Task Force.

This case is being prosecuted by Trial Attorney Kaylynn Foulon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Grady Leupold of the U.S. Attorney’s Office in the Western District of Washington.

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

          A former Seattle technology company software engineer was indicted today by a federal grand jury on two counts related to her unauthorized intrusion into stored data of more than 30 different companies, announced U.S. Attorney Brian T. Moran.  PAIGE A. THOMPSON a/k/a erratic, 33, will be arraigned on the indictment in U.S. District Court in Seattle on September 5, 2019.   THOMPSON remains in custody.

          THOMPSON is charged with wire fraud and computer fraud and abuse for the intrusion into data of Capital One and more than 30 other entities.  Law enforcement has identified many of the victims whose data was accessed and is working to notify them.  The indictment describes some of the victims as a state agency outside the State of Washington; a telecommunications conglomerate outside the United States; and a public research university outside the State of Washington.

          According to the indictment, THOMPSON created scanning software that allowed her to identify customers of a cloud computing company who had misconfigured their firewalls, allowing outside commands to penetrate and access their servers.  THOMPSON used this access not only to steal data, but also used stolen computer power to “mine” cryptocurrency for her own benefit, a practice known as “cryptojacking.” 

           Law enforcement became aware of THOMPSON’s activity after she shared information with another user on the site GitHub relating to her theft of information from the servers storing Capital One data.  On July 17, 2019, the GitHub user alerted Capital One to the possibility it had suffered a data theft.  After determining on July 19, 2019, that there had been an intrusion into its data, Capital One contacted the FBI.  Cyber investigators confirmed THOMPSON was the person responsible for the data theft.   On July 29, 2019, agents executed a search warrant at THOMPSON’s residence and seized electronic storage devices containing a copy of the data.   Investigators have found no evidence that THOMPSON sold or disseminated any of the information she accessed.

            The charges in the indictment carry penalties of up to 25 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.  The case is being prosecuted by Assistant United States Attorneys Steven Masada and Andrew Friedman.

thompson_indictment.pdf

          Three doctors and one medical practice entered into settlements with the U.S. Department of Justice to resolve allegations that they referred patients for genetic testing in exchange for kickbacks from a Seattle-area testing company, announced U.S. Attorney Brian T. Moran.  The physicians, Dr. Gregory Sampognaro of Monroe, Louisiana, Dr. Warren Strickland and Dr. Isabella Strickland of Huntsville, Alabama and a cardiac center, Cardiology P.C. of Birmingham, Alabama, have agreed to pay a total of more than $1.1 million to resolve the allegations. 

            “Providers who line their pockets by ordering unnecessary tests increase medical costs for all of us and drain critical funds from Medicare and other government health programs,” said U.S. Attorney Brian T. Moran.  “The government will continue to hold accountable medical professionals who undermine our healthcare system by accepting illegal kickbacks.”

            According to the settlement agreements, between 2012 and 2013 the doctors and cardiac center were alleged to have accepted payments from now-defunct testing company Natural Molecular Testing Corporation (NMTC) in return for ordering genetic tests from NMTC, which NMTC then billed to Medicare.  The scheme was alleged to be in violation of the Anti-Kickback Statute and the civil False Claims Act.

            The providers have agreed to pay a total of more than $1.1 million.  Specifically, Dr. Gregory Sampognaro will pay $519,750, Dr. Warren Strickland will pay $95,053, Dr. Isabella Strickland will pay $107,900, and Cardiology P.C. will pay $411,300 to resolve the government’s allegations.  The claims resolved by the settlement are allegations only; there has been no determination of liability. 

            “Patients, taxpayers, and Federal health care programs are all victimized when providers work in exchange for kickbacks– as the government contended in this case,” 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 continue working with our law enforcement partners to hold such providers accountable.”    

            NMTC declared bankruptcy in 2013.  The Centers for Medicare and Medicaid Services has an unsecured claim against NMTC for $70 million, but has little chance of recovering those funds as there are few remaining assets.

            The matter was investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG).  The settlements were negotiated by Assistant United States Attorneys Kayla Stahman and Ashley Burns.

          A 52-year-old Federal Way, Washington resident was sentenced today in U.S. District Court in Seattle to one year in prison, one year of supervised release, and $13,141 in restitution for eight counts of aiding and assisting in preparing false income tax returns, announced U.S. Attorney Brian T. Moran.  LINA PASTARS ran a tax preparation business out of her home and collected higher fees from customers by falsely inflating their deductions, so that her clients received a bigger refund.  PASTARS was convicted February 28, 2019,  following a four–day jury trial.  At the sentencing hearing, Chief U.S. District Judge Ricardo S. Martinez said PASTARS’ clients were primarily immigrants with little knowledge of the tax system and limited language skills.  “That population is most vulnerable,” the Chief Judge said “They were left to flounder by themselves when the IRS came knocking at their door.”

          According to testimony at trial and records filed in the case, the investigation of PASTARS began in 2015, when the IRS audited one of her clients whose 2012 tax return claimed more than $30,000 in unreimbursed business expenses.  The clients claimed PASTARS had claimed the deductions without their knowledge.  The IRS Scheme Development Center then began a review of returns prepared by PASTARS between 2012 and 2014 and discovered the returns had unreimbursed employee business expenses that far exceeded the average claims in the Puget Sound region.  The statistical analysis revealed PASTARS claimed unreimbursed business expenses for clients that were three to four times the average claim.

          On two different occasions in March and April 2015, undercover IRS Criminal Investigation (IRS-CI) agents went to PASTARS posing as clients for tax preparation.  Both were very clear that they had no employee business expenses.  They told PASTARS that all their expenses were reimbursed by their employers.  Nevertheless, PASTARS claimed thousands of dollars in unreimbursed expenses so that the returns showed a refund.  She increased the fee that she charged each undercover agent saying “If I do deduction I charge more.”  Undercover audio and video of these exchanges were admitted into evidence and played for the jury.

          As PASTARS deductions and promised refunds grew, so did her business. Most of her customers paid in cash – making her profit from the scheme difficult to trace.  But based on those customers who paid by check or via an online payment system she went from 159 returns prepared in 2012 to 366 prepared in 2015.   Over those same years, her trackable income from tax prep increased ten-fold from $6,500 in 2012 to $65,470 in 2015.  Those figures do not account for clients who paid in cash.

          The case was investigated by Internal Revenue Service Criminal Investigation. 

          The case was prosecuted by Assistant United States Attorneys Seungjae Lee and Michael Dion.

          Two owners of the popular ‘Bai Tong’ restaurant chain pleaded guilty Wednesday, August 14 in U.S. District Court in Seattle to a multi-year scheme to hide cash sales and reduce the taxes owed at the restaurant chain, announced U.S. Attorney Brian T. Moran.  PORNCHAI CHAISEEHA, 41, and CHADILLADA LAPANGKURA, 40, both of Kent, Washington, pleaded guilty Wednesday to conspiracy to defraud the government by hiding more than $1 million in income.  The two are scheduled for sentencing by U.S. District Judge James L. Robart on November 4, 2019.

            According to records filed in the case, CHAISEEHA and LAPANGKURA were part owners of the chain that has Thai restaurants in Washington, Oregon, and Hawaii.  Some of the restaurants operated under the name ‘Bai Tong,’ and some were called ‘Noi.’  The restaurants used a point-of-sale computer system that included a “cash suppression” or “Zapper” software program that modifies the sales records by removing cash sales from the business records.  The two had the “Zapper” software operating at their Redmond and Tukwila, Washington, restaurants and at their Bend, Oregon, restaurant.  The restaurants earned $1,034,750 in cash income that was never reported on state or federal tax returns, resulting in an agreed tax loss of $299,806.  The pair also used the unreported cash to pay employees under the table, avoiding state and federal employment taxes.  Finally, some of the cash proceeds were siphoned off to bank accounts in Thailand, and the existence of the accounts was not reported on their income tax returns.

            The defendants have agreed to pay $299,806 in state and federal taxes as part of the criminal case.  The IRS may also assess other taxes, penalties, and interest through its civil processes.

            Prosecutors have agreed to recommend sentences of no more than two years in prison for LAPANGKURA and no more than 18 months in prison for CHAISEEHA.  The Court is not bound by the recommendation.  The sentence will be determined by the Court based on the advisory Sentencing Guidelines and other statutory factors.

            The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and Homeland Security Investigations (HSI).  The case is being prosecuted by Assistant United States Attorney Matthew Diggs.

           A former Seattle area resident who defrauded dozens of investors of at least $5.8 million pleaded guilty today in U.S. District Court in Seattle to wire fraud and money laundering, announced U.S. Attorney Brian T. Moran.  KEENAN A. GRACEY, 28, formerly of Newcastle, Washington, defrauded Seattle-area investors and others out of millions of dollars by pretending to sell them stock that GRACEY did not own and had no right to sell.  Under the terms of the plea agreement, both the prosecution and the defense will recommend a prison term of 153 months in custody when GRACEY is sentenced by Chief U.S. District Judge Ricardo S. Martinez on November 15, 2019.

          According to records in the case, between 2016 and 2018, GRACEY posed as a British billionaire with degrees from the London School of Economics and Oxford University.  He drove expensive cars such as Bentleys and Ferraris and claimed to own expensive homes in Clyde Hill, Mercer Island, and Newcastle, Washington, as well as in Beverly Hills and San Diego, California.  GRACEY also used falsified bank statements to make it appear he had hundreds of millions of dollars of cash on hand.  The investigation revealed that GRACEY is Canadian, not British, and rented expensive homes and cars to make it appear he was wealthy.

          GRACEY told potential investors he had special access to millions of shares of “pre IPO” stock that would produce returns of as much as 60 times the initial investment.  Some investors gave GRACEY as much as $745,000, believing that they were purchasing stock.  In fact, GRACEY did not own any of the stock he was pretending to sell and simply stole the victims’ money.  In all, GRACEY collected $5,894,676 from dozens of investors.

          The Securities and Exchange Commission filed a civil suit against GRACEY in May 2018 and obtained a temporary restraining order barring him from selling securities.  In September 2018, the order was made permanent, and GRACEY was ordered to disgorge $4.4 million in cash and wire transfers that he had fraudulently obtained from investors.  However, even after the SEC order, GRACEY continued to try to defraud investors by claiming he owned shares in a gene editing company.  Between June 2018 and December 2018, GRACEY collected $2.2 million for shares of stock he did not own.

            GRACEY’s fraud ended when he was arrested by the FBI on December 20, 2018.  A federal grand jury charged him with wire fraud on January 3, 2019.  On July 25, 2019, the grand jury returned a superseding indictment asserting additional charges, including money laundering charges. 

          On March 29, 2019, the United States seized $603,840 of fraud proceeds that GRACEY had paid to rent a luxury mansion in Beverly Hills, California.    According to court pleadings, the government intends to forfeit this money and request it be used to compensate GRACEY’s victims. 

          Money Laundering and Wire Fraud are each punishable by up to 20 years in prison.

          The case is being investigated by the FBI.  The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson, Lyndsie Schmalz, and Michelle Jensen.

          A 66-year-old Seattle resident was indicted today by a grand jury for being a felon in possession of firearms, 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 two federal convictions and is prohibited from possessing firearms.  QUAN remains in federal custody and will be arraigned on the indictment on August 22, 2019.

                “Federal law enforcement makes it a priority to get weapons out of the hands of those who illegally possess them,” said U.S. Attorney Brian T. Moran.  “I commend the FBI agents who went into a potentially-dangerous situation and secured these weapons without any shots fired.  The U.S. Attorney’s office works every day with state, local, tribal and federal law enforcement to keep our communities safe.”

            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, eight rifles, six of them semi-automatic rifles including two AR-style assault rifles. 

            QUAN has a 1983 conviction in Washington for being a felon in possession of explosives and a 1991 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.

            Being a felon in possession of a firearm is punishable by up to ten years in prison and a $250,000 fine.

            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 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.

A 34-year-old citizen of Pakistan, who is alleged to have paid insiders at telecommunications giant AT&T to plant malware and otherwise misuse computer networks to unlock cellphones, was charged in a 14-count federal indictment unsealed yesterday following his extradition from Hong Kong to the Western District of Washington.

Muhammad Fahd was arrested in Hong Kong on Feb. 4, 2018, at the request of the United States, and was extradited to the United States on Aug. 2, 2019.  The second superseding indictment, filed in March 2018, alleges how Fahd recruited and paid AT&T insiders to use their computer credentials and access to disable AT&T’s proprietary locking software that prevented ineligible phones from being removed from AT&T’s network.  The scheme resulted in millions of phones being removed from AT&T service and/or payment plans, costing the company millions of dollars.  Fahd allegedly paid the insiders tens of thousands of dollars – paying one coconspirator $428,500 over the five-year scheme. 

Muhammad Fahd is charged with conspiracy to commit wire fraud, conspiracy to violate the Travel Act and the Computer Fraud and Abuse Act, four counts of wire fraud, two counts of accessing a protected computer in furtherance of fraud, two counts of intentional damage to a protected computer, and four counts of violating the Travel Act.

“This arrest illustrates what can be achieved when the victim of a cyber attack partners quickly and closely with law enforcement,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “When companies that fall prey to malware work with the Department of Justice, no cybercriminal—no matter how sophisticated their scheme—is beyond our reach.”

“This defendant thought he could safely run his bribery and hacking scheme from overseas, making millions of dollars while he induced young workers to choose greed over ethical conduct,” said U.S. Attorney Brian T. Moran for the Western District of Washington.  “Now he will be held accountable for the fraud and the lives he has derailed.”

According to the indictment, between 2012 and 2017, Fahd recruited various AT&T employees to the conspiracy.  Some early recruits were paid to identify other employees who could be bribed and convinced to join the scheme.  So far, three of those coconspirators have pleaded guilty, admitting they were paid thousands of dollars for facilitating Fahd’s fraudulent scheme. 

Initially, Fahd allegedly would send the employees batches of international mobile equipment identity (IMEI) numbers for cell phones that were not eligible to be removed from AT&T’s network.  The employees would then unlock the phones.  After some of the co-conspirators were terminated by AT&T, the remaining co-conspirator employees aided Fahd in developing and installing additional tools that would allow Fahd to use the AT&T computers to unlock cell phones from a remote location.  Fahd and a second co-conspirator, who is now deceased, allegedly delivered bribes to the AT&T employees both in person and via payment systems such as Western Union. 

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

The case is being investigated by the U.S. Secret Service Electronic Crimes Task Force.

The case is being prosecuted by Senior Counsel Anthony V. Teelucksingh of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Francis Franze-Nakamura, Andrew Friedman and Michelle Jensen of the Western District of Washington.  The Criminal Division’s Office of International Affairs was instrumental in the successful extradition.  The U.S. Marshals Service transported Fahd to the United States.

          A 62-year-old Port Townsend, Washington, man was arrested today on a complaint charging him with two counts of engaging in illicit sexual conduct in a foreign place, announced U.S. Attorney Brian T. Moran.  JOHN TIMOTHY WHICHER will make his initial appearance on the complaint in U.S. District Court in Tacoma at 2:30 today. 

            According to the criminal complaint, in August 2017 WHICHER took the 6-year-old child to Canada to stay at a family cabin in Ontario.  WHICHER allegedly planned the trip as a surprise and purchased the trip without informing the child’s custodial parent.  When the child returned from the trip the child disclosed to the parent the sexual molestation, saying WHICHER said to keep it a secret.  The parent confronted WHICHER and reported the conduct to the Port Townsend Police.

            Engaging in illicit sexual conduct in a foreign place is punishable by up to 30 years in prison and a $250,000 fine.

            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.

            The case is being investigated by Homeland Security Investigations (HSI). The case is being prosecuted by Assistant United States Attorney Matthew Hampton. 

            A 34-year-old citizen of Pakistan, who allegedly paid insiders at telecommunications giant AT&T to plant malware and otherwise misuse computer networks to unlock cellphones, made an initial appearance today on a 14-count federal indictment, announced U.S. Attorney Brian T. Moran.  MUHAMMAD FAHD was arrested in Hong Kong on February 4, 2018, at the request of the United States, and was extradited to the U.S. on Friday August 2, 2019.  The second superseding indictment, filed in March 2018, describes how FAHD recruited and paid AT&T insiders to use their computer credentials and access to disable AT&T’s proprietary locking software that prevented ineligible phones from being removed from AT&T’s network.  The scheme resulted in millions of phones being removed from AT&T service and/or payment plans, costing the company millions of dollars.  FAHD allegedly paid the insiders hundreds of thousands of dollars – paying one coconspirator $428,500 over the five-year scheme.

            MUHAMMAD FAHD is charged with conspiracy to commit wire fraud, conspiracy to violate the Travel Act and the Computer Fraud and Abuse Act, four counts of wire fraud, two counts of accessing a protected computer in furtherance of fraud, two counts of intentional damage to a protected computer, and four counts of violating the Travel Act.

            “This defendant thought he could safely run his bribery and hacking scheme from overseas, making millions of dollars while he induced young workers to choose greed over ethical conduct,” said U.S. Attorney Brian T. Moran.  “Now he will be held accountable for the fraud and the lives he has derailed.”

          "This arrest illustrates what can be achieved when the victim of a cyber attack partners quickly and closely with law enforcement,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “When companies that fall prey to malware work with the Department of Justice, no cybercriminal—no matter how sophisticated their scheme—is beyond our reach.”

            According to the indictment, between 2012 and 2017, FAHD recruited various AT&T employees to the conspiracy.  Some early recruits were paid to identify other employees who could be bribed and convinced to join the scheme.  So far, three of those coconspirators have pleaded guilty admitting they were paid thousands of dollars for facilitating FAHD’s fraudulent scheme. 

            Initially, FAHD allegedly would send the employees batches of international mobile equipment identity (IMEI) numbers for cell phones that were not eligible to be removed from AT&T’s network.  The employees would then unlock the phones.  After some of the co-conspirators were terminated by AT&T, the remaining co-conspirator employees aided FAHD in developing and installing additional tools that would allow FAHD to use the AT&T computers to unlock cell phones from a remote location.  FAHD and a second co-conspirator, who is now deceased, allegedly delivered bribes to the AT&T employees both in person and via payment systems such as Western Union.   

            The crimes charged are punishable by up to 20 years in prison.  If convicted, the ultimate sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

            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 U.S. Secret Service Electronic Crimes Task Force.

            The case is being prosecuted by Assistant United States Attorneys Francis Franze-Nakamura, Andrew Friedman, Michelle Jensen and Senior Counsel Anthony V. Teelucksingh of DOJ’s Computer Crime and Intellectual Property Section.  DOJ’s Office of International Affairs was instrumental in the successful extradition.  The U.S. Marshals Service transported FAHD to the United States.

fahd_second_superseding_indictment.pdf

          Two Kent, Washington dentists who conspired to avoid more than $460,000 in income taxes pleaded guilty today in U.S. District Court in Seattle to filing a false tax return, announced U.S. Attorney Brian T. Moran.  MIKE HSIEH, 48, of Bellevue, Washington, and CHRISTINE CHEN 45, of Renton, Washington, own Comfort Family Dentistry Inc.  Between 2007 and 2014, the two took steps to illegally hide their income from the IRS to reduce their tax obligation.  U.S. District Judge Richard A. Jones scheduled sentencing for November 22, 2019.

            According to records filed in the case, HSIEH and CHEN maintained two sets of financial statements for the business – one showing the actual expenses, and another showing inflated expenses.  The fraudulent expense statements were given to their accountant for tax preparation.  The pair also established a bank account that was not disclosed to the tax preparer.  Patient fees deposited into the account were not reported as income.  Finally, the pair took cash proceeds from the dental practice and never reported that income to the accountant or on their taxes.

            For tax year 2013, HSIEH admits he reported a taxable income of $232,753, when it was really more than $100,000 higher.  HSIEH should have paid taxes on income of $348,663.  For tax year 2013, CHEN reported income of $319,131 when her true income was $425,679.  For all the tax years between 2007 and 2014 they each admit failing to pay about $231,000 in taxes that they should have paid.

            HSIEH and CHEN have agreed to make restitution of slightly more than $231,000 each to the U.S. and pay any additional tax, penalties and interest.

            Filing a false tax return is punishable by up to three years in prison and a $250,000 fine.

            The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).  The case is being prosecuted by Assistant United States Attorney Matthew Diggs.

          A former Seattle technology company software engineer was arrested today on a criminal complaint charging computer fraud and abuse for an intrusion on the stored data of Capital One Financial Corporation, announced U.S. Attorney Brian T. Moran.  PAIGE A. THOMPSON a/k/a erratic, 33, made her initial appearance in U.S. District Court in Seattle today and was ordered detained pending a hearing on August 1, 2019.

            According to the criminal complaint, THOMPSON posted on the information sharing site GitHub about her theft of information from the servers storing Capital One data. The intrusion occurred through a misconfigured web application firewall that enabled access to the data.  On July 17, 2019, a GitHub user who saw the post alerted Capital One to the possibility it had suffered a data theft.  After determining on July 19, 2019, that there had been an intrusion into its data, Capital One contacted the FBI.  Cyber investigators were able to identify THOMPSON as the person who was posting about the data theft.  This morning agents executed a search warrant at THOMPSON’s residence and seized electronic storage devices containing a copy of the data. 

            “Capital One quickly alerted law enforcement to the data theft -- allowing the FBI to trace the intrusion,” said U.S. Attorney Moran.  “I commend our law enforcement partners who are doing all they can to determine the status of the data and secure it.”

            Computer fraud and abuse is punishable by up to five 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 FBI.  The case is being prosecuted by Assistant United States Attorneys Steven Masada and Andrew Friedman.

thompson_complaint.pdf