Western District of Washington

          Highline Medical Center, in Burien, Washington, a division of CHI Franciscan Health, reached a settlement today to resolve alleged violations of the Americans with Disabilities Act (“ADA”), announced U.S. Attorney Annette L. Hayes. The U.S. Attorney’s Office for the Western District of Washington began the investigation after a complainant, who is deaf, alleged that the hospital failed to provide him and his wife, who is also deaf, with sign-language interpreters so that both could understand the information provided by medical professionals following the complainant’s spinal surgery. Highline Hospital has agreed to pay the patient $25,000, and his wife $10,000. In addition, Highline will pay $10,000 to the United States in lieu of a civil penalty, and will implement a compliance plan to ensure full compliance with ADA requirements in the future.

 

          “There is very little as important in the hospital than being able to communicate effectively with treatment providers,” said U.S. Attorney Annette L. Hayes. “The Americans with Disability Act ensures that at critical junctures in medical care those who need it – including those who are deaf or hard of hearing – have access to services such as ASL translators. The agreed compliance plan that is part of this settlement ensures that the U. S. Attorney’s Office can monitor continued compliance by Highline Medical Center for an extended period of time.”

 

          According to the settlement, the patient uses American Sign Language (ASL) as his primary means of communication. He was a patient at Highline for a surgical procedure known as a cervical laminectomy between January 28, 2014, and January 31, 2014. The patient had requested that the hospital provide an ASL interpreter in advance of the surgery. However, at critical junctures in his care, such as the period immediately following surgery, and when medical staff provided discharge instructions, no interpreter was provided. The patient’s wife is also deaf and the lack of an interpreter meant she too was not able to effectively communicate with medical staff about her husband’s condition, including the extent of spinal damage that was discovered during surgery, the patient’s level of pain, information about post-operative care, and potential side effects from medication.

 

          Under the terms of the settlement, and pursuant to the agreed compliance plan, Highline Medical Center will appoint an Assistive Device Point Person to ensure that appropriate aids, including Qualified ASL Interpreters, are provided free of charge to patients who need them. The medical center will maintain a log of all patients requesting interpretive services. There will be a grievance resolution system for disputes over services to patients who are deaf or hard of hearing. The hospital will also take steps to publicize its commitment to providing ASL interpreters for deaf and hard of hearing patients. Under the terms of the settlement, the U.S. Attorney’s Office is authorized to review Highline Medical Center’s compliance with the plan for three years.

 

          This case is part of the Department of Justice’s Barrier-Free Health Care Initiative, which seeks to enforce the ADA’s prohibition of discrimination against disabled individuals by health care providers, including hospitals. Through the Barrier-Free Health Care Initiative, U.S. Attorneys’ offices across the nation and the Department of Justice’s Civil Rights Division target their enforcement efforts on this critical area for individuals with disabilities—access to medical services and facilities. The Barrier-Free Health Care Initiative is a multi-phase initiative that includes effective communication for people who are deaf or have hearing loss, physical access to medical care for people with mobility disabilities, and equal access to treatment for people who have HIV/AIDS.

 

          The Department of Justice has a number of publications available to assist entities in complying with the ADA, including a Business Brief on Communicating with People Who Are Deaf or Hard of Hearing in Hospital Settings, at www.ada.gov/hospcombr.htm. For more information on the ADA and to access these publications, visit www.ada.gov or call the Justice Department’s toll-free ADA information Line at 800-514-0301 or 800-514-0383 (TTY). ADA complaints may be filed by email to ada.complaint@usdoj.gov .

 

          The case was handled by Assistant United States Attorney Christina Fogg in collaboration with Disability Rights Section of the Civil Rights Division of the United States Department of Justice.

          A former enlisted soldier at Joint Base Lewis McChord was sentenced today in U.S. District Court in Tacoma to 20 years in prison and lifetime supervised release for production of child pornography, announced U.S. Attorney Annette L. Hayes. LUIS ALBERTO MORALES, 42, was arrested in August 2016 after his estranged wife found images on his cell phone of MORALES raping a 2-year-old autistic child. At the sentencing hearing U.S. District Judge Robert J. Bryan ordered Morales to be on lifetime supervised release and register as a sex offender following his prison term.

 

          “This is a horrific crime – words are inadequate to describe the harm done by this defendant,” said U.S. Attorney Annette L. Hayes. “I commend the dedicated law enforcement officers from the U.S. Army Criminal Investigation Command and the FBI who moved quickly to protect the victim and worked closely with our office to ensure the defendant was locked up and held to account.”

 

          According to records filed in the case, MORALES’ estranged wife discovered videos showing the rape of the two-year-old and contacted Army Military Police. The rape occurred on JBLM giving federal authorities jurisdiction. MORALES was taken into federal custody August 9, 2016, and indicted for aggravated sexual abuse of a minor and production of child pornography. MORALES has been in federal custody since his arrest. In May 2017, MORALES pleaded guilty to production of child pornography which carries a mandatory minimum term of 15-years in prison.

 

          The case was investigated by the U.S. Army Criminal Investigation Command (Army CID) and the FBI. The case is being prosecuted by Assistant United States Attorneys Grady Leupold and Matthew Hampton.

          A long-time Bellevue investment advisor was sentenced today in U.S. District Court in Seattle to nine years in prison, three years supervised release, and $3,660,216 in restitution for wire fraud and making false statements, announced U.S. Attorney Annette L. Hayes. CHRIS YOUNG YOO, 44, pleaded guilty in March 2017, admitting he raised millions of dollars in investments by promising to invest his clients’ money in funds he managed. However, YOO never actually invested the money of certain clients, and instead used their money to pay his own living and business expenses, resulting in a loss of over $3.6 million to those clients. To conceal his fraud YOO provided false information to Securities and Exchange Commission (SEC) regulators in connection with an SEC investigation. At the sentencing hearing, U.S. District Judge Thomas S. Zilly said, “you’ve destroyed (the victims) lives, financially, emotionally and physically . . . your scheme went on for nine years. I think a nine-year sentence is appropriate.”

 

          “This defendant thought he could lie, steal, and live the good life off his clients’ life savings,” said U. S. Attorney Annette L. Hayes. “Instead, he will be spending nine years in prison and many more years working to pay his clients back. Sadly, no matter what he does, he will never be able to make up for the betrayal and loss of peace of mind that he caused those who trusted him.”

 

          According to records filed in the case, between 2006, and 2015, YOO was the majority owner and operator of Summit Asset Strategies, a Bellevue investment company. The company operated two funds that invested primarily in South Korea. After opening Summit, YOO realized that the management fees he was permitted to charge investors would not support his company or lifestyle, so he began funneling some investors’ money into a separate bank account, rather than into the Summit investment funds as promised. YOO misused the investments of 17 investors in this manner. YOO sent those investors fake account statements making it appear they were invested in the funds as he promised. Instead their money went to pay for luxury cars, and the rental of a $4 million Bellevue home.

 

          YOO identified those investors he thought he could manipulate, and encouraged them to invest their life savings with him. Some sold their homes and invested the proceeds, while others drained their retirement accounts, trusting YOO with their futures. One of the victims wrote to Judge Zilly saying, “I have lost everything I worked for, including money gifted to me by my grandparents and parents. I have lost my future. I worked an honest job, packing my lunch to work each day to save. I thought I was making sound financial decisions, and trusting Yoo cost me everything. . . . My life savings. Gone.”

 

          In 2014, YOO was required to disclose all of his bank accounts to the SEC as part of an SEC investigation into YOO’s management of two investment funds. YOO submitted misleading documents to the SEC to conceal the bank account he was using to commit his fraud. In 2015, YOO reached a settlement with the SEC in which he was ordered to pay restitution to Summit Asset Management investors because he had fraudulently inflated the fees he charged the funds. YOO has not paid the restitution, and even after this settlement YOO continued to fraudulently solicit investments and use the funds for his own purposes. In all, some 17 investors were defrauded of $3,660,216.

 

          The case was investigated by the FBI, the Washington State Department of Financial Institutions, and the Bellevue Police Department. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

          A 47-year-old Chicago man was sentenced today in U.S. District Court in Seattle to six years in prison for distributing a controlled substance, announced U.S. Attorney Annette L. Hayes. KEVIN C. CAMPBELL marketed and sold various drugs, such as ecstasy, marijuana, steroids, and prescription drugs, such as Xanax and valium, using the dark web. In August 2013, CAMPBELL sold heroin and prescription medications to a 27-year-old Bellevue, Washington, man who died after shooting up with heroin. U.S. District Judge John C. Coughenour ordered CAMPBELL to serve three years of supervised release following prison.

 

          According to records filed in the case, emergency crews were called to a home in Bellevue in August 2013, when a house guest found the 27-year-old man unconscious in his bedroom, surrounded by evidence of recent heroin use. On the computer in front of him was the ‘Silk Road’ website, an online black market where illegal goods and services were anonymously marketed and sold. On the screen were messages from a vendor, later determined to be CAMPBELL’s online identity. The investigation revealed that CAMPBELL was a drug dealer on the dark web site, sending prescription drugs and other illegal substances to customers across the country who ordered online and paid via Bitcoin. CAMPBELL concealed and delivered the drugs in altered DVD cases sent via the U.S. mail. One DVD case recovered near the deceased man’s body was found to have CAMPBELL’s fingerprint on it. Even after the Silk Road website was shut down by law enforcement, CAMPBELL continued to sell drugs to customers, in one instance sending Xanax pills to a customer in Colorado who was working with law enforcement. In May 2014, law enforcement obtained a warrant to search CAMPBELL’s Chicago home and found evidence of his drug trafficking, including a small amount of drugs, digital scales, notes, empty DVD cases, and shipping materials. The investigation revealed that CAMPBELL did not typically distribute heroin before selling to the Bellevue man and ceased selling heroin after the death.

 

          The case was investigated by the U.S. Postal Inspection Service, the Bellevue Police Department, and the Eastside Narcotics Task Force. The case was prosecuted by Assistant United States Attorney Steven Masada.

          A 25-year-old member of the Makah Indian Tribe was sentenced today in U.S. District Court in Tacoma to 30 months in prison and ten years of supervised release for sexual abuse of a minor, announced U.S. Attorney Annette L. Hayes. MITCHEL CANAS pleaded guilty in May 2017, admitting he sexually molested a 13-year-old child. At the sentencing hearing, U.S. District Judge Benjamin H. Settle ordered CANAS to register as a sex offender.

 

          According to records in the case, CANAS was indicted by the grand jury in November 2016. The indictment charged that, between November 2015 and October 2016, CANAS sexually abused a person that was 13 years old. At the time of the offense CANAS was 23 years old. The federal court has jurisdiction in this case because the abuse occurred on Makah Tribal trust land.

 

          The case was investigated by the Makah Tribal Police Department and the FBI. The case was prosecuted by Assistant United States Attorney J. Tate London. Mr. London serves as a Tribal Liaison for the U.S. Attorney’s Office.

          The owner of a now defunct real estate escrow firm was indicted last month by a federal grand jury on ten counts of bank fraud, and one count each of mail and wire fraud, announced U.S. Attorney Annette L. Hayes. LORI LYNN ANDREW, 48, of Cashmere, Washington, the owner of Hartman Escrow, Inc., was arrested and arraigned on the indictment August 3, 2017. The Washington State Department of Financial Institutions arranged for a receiver to take over the Tukwila, Washington escrow company in 2012 after finding evidence of fraud. ANDREW had her license to act as an escrow agent suspended in 2013 and her license has since been revoked.

 

          According to the indictment, beginning in about January 2011, and continuing until July 2012, ANDREW used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions. ANDREW made, or had others make, false settlement statements on the transactions listing false or inflated fees and charges to hide the fact that she was embezzling money. ANDREW forged signatures on various statements and created false invoices, statements and bills; she altered and deposited checks to her company account that should have gone to others; she took funds from her trust account and transferred them to her personal account for her own use. ANDREW used the money for casino payments, credit card bills and other personal expenses. ANDREW defrauded individual customers as well as Bank of America, Wells Fargo, Citi Bank, Chase and GMAC.

 

          In all the indictment alleges ANDREW defrauded the financial institutions and other customers of approximately $2 million.

 

          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.

 

          Each count of bank, mail or wire fraud is punishable by up to 30 years in prison and a fine of up to $1 million.

 

          The case was investigated by the Washington State Department of Financial Institutions, the FBI, the Postal Inspection Service (USPIS) and the Housing and Urban Development Office of Inspector General (HUD-OIG).

 

          The case is being prosecuted by Special Assistant United States Attorney Hugo Torres and Assistant United States Attorney Norman Barbosa. Mr. Torres is a Senior King County Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.

          A 28-year-old enrolled member of the Port Gamble S’Klallam Tribe was sentenced today in U.S. District Court in Tacoma to eight years in prison and twenty years of supervised release for molesting a young child, announced U.S. Attorney Annette L. Hayes. GARY CLYDE WELLMAN, JR., of Kingston, Washington pleaded guilty to abusive sexual contact in May 2017. U.S. District Judge Robert J. Bryan ordered WELLMAN JR. to register as a sex offender upon his release from prison.

 

          According to records filed in the case, both the victim and WELLMAN JR. are members of the Port Gamble S’Klallam Tribe. WELLMAN JR. was a close friend of the victim’s parents and was viewed by the family as an uncle to their children. In October 2016, the victim disclosed to a trusted relative that WELLMAN JR. had molested the child while he was a guest in the family’s home. The abuse began when the child was as young as 6 or 7, and some sexual abuse occurred on Port Gamble S’Klallam Tribal Trust land.

 

          WELLMAN JR. has been in custody since his arrest in October 2016. He was charged in Kitsap County Superior Court in connection with the molestation that occurred off Tribal lands. Those charges were resolved with the federal charges for which he was sentenced today.

 

           The case was investigated by the FBI and the Port Gamble S'Klallam Department of Public Safety. The case was prosecuted by Assistant United States Attorney Rebecca Cohen. Ms. Cohen serves as a Tribal Liaison for the United States Attorney’s Office.

          A Bellevue developer who fraudulently obtained over $235 million dollars during his real estate investment scheme, including over $140 million from immigrant investors, was sentenced today in U.S. District Court in Seattle to four years in prison, announced U.S. Attorney Annette L. Hayes. LOBSANG DARGEY, 43, entered guilty pleas in January 2017 to two federal felonies, admitting that he defrauded immigrant investors, federal regulators, and institutional investors. DARGEY promised to use the immigrant investors’ investment funds in compliance with a federal immigration program designed to stimulate growth and create jobs. Instead, he secretly diverted tens of millions of dollars of investor funds to unauthorized uses and used falsified financial records in an attempt to obtain additional funding to make up the shortfall. At the sentencing hearing, U. S. District Judge Robert S. Lasnik said DARGEY engaged in “reckless behavior . . . putting these people in jeopardy of never achieving their immigration dreams.”

          “This defendant stole not just money but something that he knew from personal experience was much more valuable – the right to come to the United States and live the American dream,” said U. S. Attorney Annette L. Hayes. “Many of the investors that the defendant defrauded sold everything they had in China in reliance on his promises. They now live in limbo – with their money tied up in litigation and no idea of whether their dream to live in this country will come true.”

 

          According to records filed in the case, between 2012 and 2015, DARGEY recruited overseas investors, primarily in China, to fund two development projects – one in Everett, Washington known as the “Path American Farmer’s Market” and one in Seattle’s Belltown neighborhood known as the “Potala Tower.” DARGEY promoted the projects under the federal “EB-5” program, which allows immigrant investors to qualify for permanent residency if they create American jobs by investing $500,000 in a qualifying American business project. DARGEY represented to the immigrant investors and to the U.S. Department of Homeland Security that he was investing all of investors’ funds in the Everett and Seattle projects in compliance with program requirements.

          Contrary to his promises, DARGEY used tens of millions of investor dollars for uses not allowed under the federal program and not disclosed to investors. This included approximately $11.5 million of investor funds that DARGEY secretly used to pay unauthorized sales expenses, including sales commissions to Asian brokers. The money also went for lavish meals, expensive gifts, and cash withdrawals at casinos, and the purchase of a $1.4 million Bellevue home for a DARGEY business associate. DARGEY withdrew over $10 million in investor funds from the project as developer fees to fund his lavish lifestyle, including his purchase of a $2.5 million home in Bellevue.

          In addition, DARGEY told investors and the United States government that DARGEY would contribute $32.5 million of his own money toward the projects. In fact, DARGEY admitted that he did not contribute any funds to the projects. DARGEY’s fraud resulted in tens of millions of dollars in funding shortfalls for the EB-5 approved projects. DARGEY attempted to fill these shortfalls by using a falsified bank statement to obtain a $25 million construction loan, and by using altered financial statements to obtain $60 million in additional funding from a private institutional investor.

          Of the 281 foreign investors defrauded by DARGEY, none has received permanent resident status in the United States. A majority of the investors have had their applications denied because of DARGEY’s fraud, and are appealing the denials. Some wrote to the court explaining the damage DARGEY’s conduct caused:

• Investor Y.Y. wrote: In order to provide our children with better lives and study environments, we sold our one and only real estate so as to accumulate money for the American EB-5 investment immigration [program]…. Lobsang’s illegal behavior has destroyed our immigration dream.

• Investor Y.W. wrote: Many younger investors like me had to dramatically alter their life path. Some adults were forced to return to China without finishing their college degree.

• Investor Z.C. wrote: “…because of defendant’s illegal behavior, it led us to live in fear and suffer huge mental damage because our lives can be cancelled at any moment…. My wife is so afraid that she dares not pick up the mail for fear of receiving a deportation notification.”

          “Mr. Dargey’s selfish greed twice robbed his investors as he seized both their funds and jeopardized their dreams for a future life in the United States,” said Acting Director of U.S. Citizenship and Immigration Services James McCament. “We are grateful to our many law enforcement partners who helped to deliver justice in this case and uphold the integrity of the EB-5 Program.”

 

          U.S. Citizenship and Immigration Services administers the EB-5 Program. Under this program, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for permanent residence if they make the required investment in a commercial enterprise in the United States and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.

  

          DARGEY’s fraudulent conduct came to an end in August 2015, when the Securities and Exchange Commission filed a civil suit and won a court order freezing his assets. The FBI simultaneously executed search warrants at DARGEY’s offices in Bellevue and Everett.

 

          As part of his plea agreement in this case, DARGEY agreed to provide restitution of more than $24 million to the investors.
 

          The case was investigated by the FBI and is being prosecuted by Assistant United States Attorneys Justin Arnold and Seth Wilkinson. The Department of Justice appreciates the assistance of the Securities and Exchange Commission and U.S. Citizenship and Immigration Services in connection with this matter.

          A resident of New Zealand, who traveled to Seattle in April 2016 to take possession of export-restricted parts designed for missile and space applications, was sentenced today in U.S. District Court in Seattle to two years in prison for conspiring to violate the Arms Export Control Act, announced U.S. Attorney Annette L. Hayes. WILLIAM ALI, 38, has been in federal custody since his arrest on April 11, 2016. At sentencing U.S. District Judge Thomas S. Zilly said, “You knew that if you did it you could go to jail and you proceeded to do it. . . you laughed and you were undeterred in your decision to come here.”

          “Protecting national security is job one for United States Attorneys,” said U.S. Attorney Annette L. Hayes. “This defendant tried to evade our export control laws to transfer highly sensitive products to China. We will continue to work closely with U.S. Immigration and Customs Enforcement and our other law enforcement partners to ensure our national assets do not end up in the wrong hands.”

 

           According to records in the case and testimony presented at trial, ALI emailed several companies and distributors in April 2015 about purchasing certain accelerometers that are designed for use in spacecraft and missile navigation. These accelerometers cannot be exported from the United States without a license from the U.S. State Department, which Ali did not have. Homeland Security Investigations learned of Ali’s inquiries and began an investigation.

          Over the next year, ALI communicated by phone and email with a Homeland Security Investigations undercover agent, and with a person in China known in his emails as “Michael.” Michael was the person seeking the accelerometers, as well as certain gyroscopes that are designed for military use. ALI was working to find a way to purchase the devices and transport them secretly to Michael in China. In multiple emails, ALI made clear that he was aware that export of the accelerometers and gyroscopes was illegal. ALI sent the undercover agent nearly $25,000 for the devices – money he got from Michael. ALI traveled to Seattle and met with the undercover agent on April 11, 2016, at a downtown hotel. Shortly after ALI took possession of the devices he was arrested. ALI had with him an airline ticket to Hong Kong and a visa to travel to China.

          “U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation's enemies,” said Brad Bench, special agent in charge of Homeland Security Investigations in Seattle. “One of HSI’s highest priorities is to prevent illicit procurement networks, terrorist groups, and hostile nations from illegally obtaining military items and controlled dual-use technology.”

          The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and was prosecuted by Assistant United States Attorneys Thomas Woods and Rebecca Cohen.

          The Canadian organizer of a 2005 attempt to smuggle 41 kilos of cocaine into Canada was sentenced today in U.S. District Court in Seattle to 13 years in prison for conspiracy to distribute cocaine and ecstasy, announced U.S. Attorney Annette L. Hayes. KEVIN DONALD KERFOOT, 53, of Surrey, British Columbia, Canada was indicted in July 2006, nine months after his co-conspirators were arrested in the Bellingham area as they tried to move 41 kilos of cocaine up I-5 and onto a boat for transit to Canada. The person who was going to ferry the cocaine to Canada, brought more than seven kilos of the drug MDMA or ‘ecstasy’ into the U.S. for distribution via KERFOOT’s drug network. KERFOOT fought extradition from Canada for years. After exhausting the extradition process in the Canadian court system, he was transferred to the Western District of Washington and pleaded guilty in April 2017. At the sentencing hearing U.S. District Judge Thomas S. Zilly said KERFOOT, “was involved with a tremendous amount of drugs.”

 

          “This defendant tried to avoid facing the music by getting people to lie during his Canadian extradition proceedings,” said U.S. Attorney Annette L. Hayes. “Perhaps he thought he could fight a war of attrition – but this office and our law enforcement partners are committed to holding leaders of drug trafficking organizations responsible for the poison they spread both here and in Canada.”

 

          According to records filed in the case, a confidential source alerted agents that a large load of cocaine was traveling towards the border in October 2005. Acting on the information, a Washington State Trooper identified a suspicious vehicle driving erratically. After stopping the vehicle, a narcotics K-9 alerted to the presence of cocaine in the vehicle and officers discovered the 41 kilos of cocaine. Agents worked to arrest other members of the smuggling ring, including the captain of a boat waiting at the Bellingham marina, and two other men who were waiting to pick up and distribute the ecstasy the boat had brought down from Canada. KERFOOT was the person in charge of the smuggling operation.

 

          The other members of the smuggling ring were sentenced to prison terms ranging from six-and-a-half years to just over three years. All have since been released after serving their sentences.

 

          As KERFOOT fought extradition from Canada, he convinced at least one member of the crime ring to change his statement to law enforcement. Last August, just as his appeals were running out, one of the members of the ring was attacked in a brazen daylight shooting and suffered seven to eight gunshot wounds as he sat in his car. The witness survived and reported to Canadian law enforcement that KERFOOT was behind the targeted attack. The shooter is currently awaiting trial in Canada.

 

          The case was investigated by the Drug Enforcement Administration (DEA) with assistance from the Washington State Patrol, U.S. Immigration and Customs Enforcement (ICE), U.S. Border Patrol, the U.S. Coast Guard and the Royal Canadian Mounted Police (RCMP).

 

          The case was prosecuted by Assistant United States Attorney Vince Lombardi, with assistance from the Department of Justice Office of International Affairs (OIA).

          The former manager of a JPM Chase bank branch in West Seattle was sentenced today in U.S. District Court in Seattle to 54 months in prison for embezzling more than half a million dollars from the accounts of elderly customers, announced U.S. Attorney Annette L. Hayes. ROBERTA CASTILLO, 43, acted as a trusted friend and financial helper to various elderly customers of first Washington Mutual and later Chase after WAMU was sold. These elderly clients trusted CASTILLO to assist them with their financial affairs. Instead, she stole their funds by manipulating the electronic records at the bank, committing identity theft with their personal information and using innocent subordinates to make it difficult to track the disappearing funds. Chase has agreed to restore the funds to the customer accounts. At sentencing U.S. District Judge John C. Coughenour said CASTILLO had preyed on “vulnerable victims,” and asked to be updated that Chase had made the victims whole.

 

          “This defendant stole from her elderly victims when they were most vulnerable – after the loss of a spouse, while battling illness or dealing with the challenges that sometimes come with age,” said U.S. Attorney Annette L. Hayes. “In one instance, she stole more than $350,000 from the estate of a deceased customer. This defendant’s shameful behavior deserves substantial punishment.”

 

          According to records filed in the case, CASTILLO began working for what was then Washington Mutual in the late 1990s. She started as a teller and worked her way up to being a branch manager in West Seattle. Along the way CASTILLO worked with many customers who, as they aged, came to rely on her for their financial services. With access to their accounts, CASTILLO drained resources from at least three different sets of clients. CASTILLO was embezzling as much as $20,000 per month. She drained $364,000 from an overlooked CD in the account of a deceased client; she made 37 unauthorized transfers totaling more than $140,000 from the accounts of an elderly brother and sister; and she committed identity theft against another client opening and using a credit card in his name and getting cash from his line of credit. CASTILLO used the money to pay her bank loans, routine expenses such as manicures and gas, hotel rooms, airplane tickets, a cruise, and for bail money for a boyfriend in trouble with the law. In the wake of the thefts some of the victims have struggled to pay bills or make necessary home repairs.

 

          In addition to the prison sentence, CASTILLO will serve five years on supervised release and is ordered to pay restitution of more than $500,000 to Chase.

 

          The case was investigated by the Seattle Police Department and the FBI. The case is being prosecuted by Assistant United States Attorney Susan Roe.

          A federal grand jury in Seattle returned a five count indictment yesterday charging 23-year-old JOSEPH DANIEL HUDEK, IV for the July 6, 2017, incident aboard a Delta Airlines flight to Beijing, China, announced U.S. Attorney Annette L. Hayes. HUDEK remains detained at the Federal Detention Center at SeaTac, and will be arraigned on Thursday, July 27, 2017, at 9:00 AM.

 

          The indictment charges HUDEK with Interference with Flight Crew and Attendants and four counts of Assault within the Special Aircraft Jurisdiction of the United States. Some of the assault counts carry higher penalties because of the use of a dangerous weapon or the infliction of serious bodily harm. One passenger and one flight attendant had to be taken from the plane for medical attention immediately after the assaults.

 

          According to records filed in the case, HUDEK was seated in first class on the Delta flight. The aircraft had just passed over Vancouver Island and was over the Pacific Ocean when HUDEK came out of the first class bathroom and in an agitated state attempted to open the exit door of the aircraft. Two flight attendants attempted to stop HUDEK and he threw one to the floor and punched the other. When a passenger attempted to assist the flight attendants, HUDEK hit him over the head with a wine bottle. Ultimately, multiple passengers were required to restrain HUDEK, and one had to re-lock the exit door as the aircraft returned to Seattle.

 

          Interference with a flight crew is punishable by up to 20 years in prison. Three of the assault counts carry statutory maximum penalties of up to ten years in prison. One of the assault counts is a misdemeanor with a maximum penalty of one year 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 and is being prosecuted by Assistant United States Attorney Stephen Hobbs.

          A former resident of Eastsound, Orcas Island, Washington was sentenced today in U.S. District Court in Seattle to 33 months in prison and three years of supervised release for wire fraud in connection with her scheme to steal from her employers, announced U.S. Attorney Annette L. Hayes. SARAH ELIZABETH COFFELT, 42, who now resides in Seattle, worked for a retired couple and their business and non-profit entities as a bookkeeper from 2003 until she was terminated for theft in 2016. COFFELT stole more than $755,000 from the couple’s accounts by transferring money from their accounts to her own, by forging checks and by using business credit cards for her family’s personal expenses. At the sentencing hearing U.S. District Judge Thomas S. Zilly ordered her to pay $788,886 in restitution. In imposing the sentence, Judge Zilly noted that COFFELT “spent 90% of her time addressing the Court feeling sorry for herself and her family, and expressed too little concern for the real victims of her crime.”

 

          According to records in the case, in 2003, COFFELT was hired to handle bookkeeping duties for the couple, and various entities they owned including Apogee Flight Incorporated, L.L.C. (Apogee) which owned aircraft and hangars, and the non-profit Heritage Flight Museum (HFM). COFFELT’s duties included handling the payroll for the couples’ house, Apogee and HFM employees as well as the bills for Apogee, HFM and other entities. Even as she worked as a bookkeeper, COFFELT and her husband owned Moon Glow Arts and Crafts, a store in Eastsound. COFFELT admits that she used money from her employers’ accounts to pay the expenses of the business, as well as other expenses such as trips for her family, her mortgage, her taxes and more than $30,000 in fuel charges.

 

          COFFELT was able to hide her embezzlement by having the couple’s bank and business credit card statements sent to her home so that she was the only person reviewing them. She used a company credit card to charge more than $30,000 for her family’s expenses, and allowed a maintenance worker to charge a similar amount.

 

          The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Susan Roe.

          The Department of Justice and Safeway (a division of Albertson’s Companies, Inc.) have reached a civil settlement of allegations the company failed to timely report controlled substances that were missing from pharmacies, announced U.S. Attorney Annette L. Hayes. Safeway will pay the United States $3 million and implement a compliance agreement reached with the Drug Enforcement Administration (DEA) to ensure such notification lapses do not happen again.

 

          “As our community struggles with an epidemic of opioid abuse, we call on all participants in drug distribution to carefully monitor their practices to stem the flow of narcotics to those who should not have them,” said U.S. Attorney Annette L. Hayes. “Pharmacies have a key role to play in making sure only those with legitimate prescriptions receive these powerful and potentially addictive drugs, including by timely reporting losses of those drugs. Failure to do so hamstrings DEA’s investigative abilities and frustrates some of our best methods at curbing abuse.”

 

          According to the settlement agreement, the investigation began in April 2014, when the DEA learned that Safeway pharmacies in North Bend, Washington and Wasilla, Alaska did not notify DEA of losses of tens of thousands of hydrocodone tablets until months after Safeway discovered the pills were pilfered by employees. DOJ’s investigation was later widened to review practices at all Safeway pharmacies nationwide between 2009 and 2014. The investigation revealed a widespread practice of Safeway pharmacies failing to timely report missing or stolen controlled substances. Today’s settlement resolves the allegations with Safeway acknowledging and accepting responsibility for failing to report the missing medications in a timely fashion.

 

          DEA Special Agent in Charge Keith Weis was pleased with the settlement adding, “At this crucial juncture in our efforts to combat abuses of prescription drugs, it is imperative that pharmacies notify DEA immediately when drugs are stolen or missing. A quick response to such reports is one of the best tools DEA has in stopping prescription drug diversion.”

 

          By law, pharmacies and other drug providers are required to notify the appropriate Field Division of the DEA of the theft or significant loss of any controlled substance within one business day of the discovery of the theft or loss.

 

          This is the third DOJ settlement in the last year in the Western District of Washington involving lax pharmacy controls and inconsistent adherence to DEA requirements. In January 2017, DOJ reached an $11.75 million settlement with Costco and in July 2016 DOJ reached a settlement with Seattle Cancer Care Alliance over pharmacy control failures.

 

          The case was investigated by the DEA’s Seattle Field Office, DEA’s Drug Diversion and Regulatory Litigation Section and the U.S. Attorney’s Office for the Western District of Washington. The settlement agreement was negotiated by Assistant United States Attorney Christina Fogg.

WASHINGTON - The Department of Justice (DOJ) announced today that the Washington State Supreme Court and the Washington State Court Administrator published a Model Language Access Plan (LAP) and accompanying Deskbook to assist its state courts in ensuring access for all limited English proficient (LEP) individuals to court services and programs. The LAP and Deskbook are the culmination of several years of collaboration between Washington State Courts and DOJ, through its Civil Rights Division and United States Attorney’s Office for the Western District of Washington, which provided technical and resource development assistance to the State.

 

          Under Title VI of the Civil Rights Act of 1964 (Title VI), the Omnibus Crime Control and Safe Streets Act of 1968 (Safe Streets Act), and the regulations implementing these federal laws, all courts are required to provide language assistance services to all LEP individuals in civil and criminal court proceedings, and in all court-managed services and programs. The LAP and the Deskbook assist state courts in developing a written language access plan and creating or improving its language assistance services to meet federal civil rights obligations.

 

          “We applaud the Chief Justice and the many contributing stakeholders for working collaboratively with us to ensure compliance with applicable civil rights laws that ensure that everyone – regardless of their national origin – is able to participate meaningfully, fully and fairly in all state court proceedings,” said United States Attorney for the Western District of Washington, Annette L. Hayes. “Providing effective language assistance services is essential to safeguarding the civil rights of court users and ensuring the integrity of our justice system and the rule of law.”

 

          “Ensuring the integrity and fairness of court proceedings goes hand in hand with providing interpreters and other language assistance services,” said Acting Assistant Attorney General Thomas E. Wheeler II. “This joint effort demonstrates the Department of Justice and the Washington State Courts are committed to ensuring that court proceedings are administered as fairly and equitably as possible for individuals coming through the courthouse doors, regardless of national origin.”

 

          The Justice Department’s initial engagement with the Washington State Courts began as a review of the King County Superior Court’s (KCSC) language assistance services program. In 2011 and 2012, the Justice Department received complaints from LEP individuals who alleged they did not receive interpreter services in KCSC civil cases. In response, DOJ opened a civil rights review to determine whether KCSC’s actions constituted national origin discrimination pursuant to Title VI, the Safe Streets Act, and their implementing regulations.

 

          In early 2014, the KCSC agreed to provide language assistance services (including interpreter services) at no cost for LEP parties and persons in interest in court proceedings and operations, both civil and criminal. Until that time, KCSC had been providing these services without consideration of cost only in criminal cases. KCSC also agreed to provide DOJ information about the financial impact of extending its language services to civil cases. During that time, hundreds of additional LEP individuals received interpreter services in civil legal proceedings who otherwise may not have. In December 2015, KCSC agreed to continue to provide free language assistance services indefinitely. As a result, DOJ agreed to close its engagement with KCSC and, to replicate KCSC’s success, sought to work with the Washington State Administrative Office of the Courts, its Office of Court Innovation, and the Washington State Interpreter Commission, and its community partners, in developing the LAP and Deskbook for the Washington State Court system as a whole.

 

          DOJ, through the Civil Rights Division and U.S. Attorney’s Offices, is responsible for investigating complaints of alleged violations of Title VI, as well as other federal laws, made against recipients of federal financial assistance from the Justice Department. When the Justice Department is unable to secure voluntary compliance with Title VI by a recipient, the Department has the authority to suspend or terminate financial assistance to a recipient provided by the Justice Department or to bring a civil suit to enforce the rights of the United States under applicable federal, state, or local law. The Justice Department also may provide technical and resource development assistance to recipients of federal financial assistance, as occurred here.

 

          Both matters were handled by Assistant U.S. Attorneys J. Michael Diaz and Christina Fogg in the U.S. Attorney’s Office and Michael Mulé, Attorney in the Federal Coordination and Compliance Section (FCS) of the Civil Rights Division at the Justice Department.

 

          For more information about FCS’s State Courts Language Access Initiative, a multi-pronged initiative focused on enforcement, technical assistance, outreach, resource development and policy efforts to ensure meaningful access to state courts receiving federal financial assistance, visit http://www.lep.gov or view the recent DOJ publication, “Language Access in State Courts.” To learn more about the LEP communities in Washington State or other parts of the United States, go to the Language Map App, available here. Further information about Title VI is available here.

 

wa_courts-v5_spanish_002.pdf

          The final member of a drug distribution conspiracy was sentenced today in U.S. District Court in Tacoma to four years in prison, announced U.S. Attorney Annette L. Hayes. ALEX BREMMER ABELSON, 26, of Tacoma, was arrested in a home containing significant amounts of heroin and methamphetamine, as well as 11 firearms. ABELSON has a prior felony conviction that precludes him from possessing firearms, and was on Washington Department of Corrections supervision at the time of his arrest. At the sentencing hearing, U.S. District Judge Ronald B. Leighton focused on “the rapidity with which the defendant goes from event to event, crime scene to crime scene, without catching his breath … he’s a persistent criminal.”

 

          According to records filed in the case, ABELSON is the sixth and final defendant sentenced in this matter. The conspirators distributed heroin and methamphetamine throughout King and Pierce Counties. In 2014, local law enforcement began investigating the drug trafficking activities of Michael Duane Humburgs. The Drug Enforcement Administration joined the investigation in early 2016, as investigators learned that the organization was increasing the quantities of drugs it was spreading in the community.

 

          When law enforcement executed search warrants on the case on April 29, 2016, they seized large amounts of heroin, methamphetamine, fentanyl, Viagra, anabolic steroids, cocaine, oxycodone, and ecstasy. The search warrants resulted in the seizure of $137,000 in cash and 15 firearms.

 

          Earlier this month, Humburgs, a 42-year-old resident of Federal Way and leader of the conspiracy, was sentenced to six years in prison for being a felon in possession of a firearm. The other members of the drug trafficking organization were sentenced for drug-related offenses. Jim Marks, a 46-year-old resident of Kent, was sentenced to five years in prison; Diallo Redd, a 45-year-old resident of Tacoma, was sentenced to four years in prison; Rafael Lugo, a 42-year-old resident of Tacoma, was sentenced to three years in prison; and Charles Traylor, a 45-year-old resident of Seattle, was sentenced to two years in prison.

 

          The case was investigated by the Drug Enforcement Administration, the King County Sheriff’s Office, and the Federal Way Police Department. The case is being prosecuted by Assistant United States Attorneys Marci Ellsworth and Nicholas Manheim.

          A 33-year-old resident of Chehalis, Lewis County, Washington was sentenced late yesterday in U.S. District Court in Tacoma to a total of more than 20 years in prison and lifetime supervised release for production of child pornography, announced U.S. Attorney Annette L. Hayes. BRANDON K. PHELPS is already serving more than 15 years in prison on a state sentence for separate crimes of child molestation and rape. At the sentencing hearing U.S. District Judge Benjamin H. Settle imposed a 228-month federal sentence on top of an 18-month sentence PHELPS had already served in state custody, saying, “Deterrence is very important...word must be out there for others like you that, if you engage in these crimes (child sex offenses), you will receive very long sentences.”

          According to records filed in the case, in 2014, PHELPS babysat three minor children, one of whom was a 9-year-old girl. PHELPS forced the young girl to engage in sexually explicit conduct. PHELPS made photos of the abuse using his smart phone, and described the abuse to others in email communications. PHELPS made additional sexually explicit photos of another young child while she slept. In October 2014, law enforcement received a cyber-tip concerning the defendant’s online exchange of child pornography with others. PHELPS was arrested in January 2015.

          On February 22, 2017, PHELPS was sentenced to 185 months in prison for Child Molestation for an incident in 2009 when he pulled a 10-year-old’s bathing suit aside to view her bare vagina, watched her take a shower and offered to display his naked body to her. PHELPS was also convicted of raping his adult girlfriend while she was incapacitated.

          The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) and the Seattle Police Department in its role as operator of the Internet Crimes Against Children (ICAC) task force.

          The case was prosecuted by Assistant United States Attorney Grady Leupold in coordination with the Lewis County Prosecuting Attorney’s Office.

          A 50-year old Seattle man with previous convictions for sex offenses against children, was sentenced today in U.S. District Court in Seattle to 12 years in prison and 20 years of supervised release for attempted enticement of a minor, announced U.S. Attorney Annette L. Hayes. TODD DARREN RICKDAL, was arrested following a Seattle Police Department sting operation in November 2016. RICKDAL communicated by email, text and telephone believing he was making arrangements to have sex with the undercover’s 5-year-old daughter. At sentencing U.S. District Judge James L. Robart said he was “substantially concerned about protecting the public.”

 

          “A federal conviction – with its significant penalties and intensive supervision after release – is the right result in a case like this,” said U.S. Attorney Annette L. Hayes. “I commend law enforcement for working proactively to identify those who try to use the internet to commit their crimes. There is no question that their work prevented the exploitation of real children and the impact such horrific crimes have over a lifetime.”

 

          According to records filed in the case, the Seattle Police Department initiated an investigation into people using the website Craigslist to seek sex with children. The undercover officer posted an ad in the ‘Casual Encounters’ section referencing “family fun.” RICKDAL responded to the ad and over the next few days made statements regarding his intent to meet the undercover to have sex with the undercover’s fictitious 5-year-old child. RICKDAL was arrested when he arrived at the hotel and had products in his possession that he had described to the undercover as aids to assist in the planned sexual abuse.

 

          RICKDAL is a registered sex offender and at the time of the current offense was still on community corrections supervision for a 2012 conviction for Attempted Child Molestation in the Second Degree and Possession of Depictions of Minors Engaged in Sexually Explicit Conduct. RICKDAL served 34 months in prison for that conviction.

 

          This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse that was 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.projectsafechildhood.gov.

 

          The case was investigated by the Seattle Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI). 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 crimes in federal court.

            The former Chief Financial Officer (CFO) of Soundpath Health was sentenced today in U.S. District Court in Seattle to a year and a day in prison for embezzling more than $631,000 from his employer, announced U.S. Attorney Annette L. Hayes. The embezzlement was part of a complex wire fraud scheme that 58-year-old ZACHARY AUGUSTUS SMULSKI used in an attempt to fund his own start-up companies. When the Comptroller at Soundpath Health discovered that SMULSKI had hidden company funds, SMULSKI transferred the money to Soundpath and left the company. Today SMULSKI paid $29,514 in restitution. U.S. District Judge Robert S. Lasnik imposed three years of supervised release to follow prison and told SMULSKI, “it was a crime done for selfish reasons.”

 

            According to records filed in the case, SMULSKI was hired as the CFO of Soundpath Health in 2008. In 2011, in order to improve the company’s cash reserves, SMULSKI initiated a leaseback program which should have put cash on the company balance sheet. However, SMULSKI diverted funds received under the program to accounts he established for a start-up company he was developing. While he passed some of the funding back to Soundpath Health, he retained $631,500 for his personal business endeavors and used fake accounting documents to conceal the embezzlement. It was only after the Soundpath Health Comptroller started questioning some of the financial records in the midst of a state audit, that SMULSKI suddenly delivered a check from the start-up account to Soundpath Health to repay the $631,500. SMULSKI had used more than $20,000 of Soundpath Health’s money to pay business expenses of his start-up.

 

           The case was investigated by the U.S. Department of Health and Human Services -- Office of Inspector General and the FBI. The case is being prosecuted by Assistant United States Attorney Francis Franze-Nakamura.

          The 48-year-old former bookkeeper for two Windermere Real Estate franchises was convicted today in U.S. District Court in Tacoma of six counts of wire fraud related to her embezzlement scheme, announced U.S. Attorney Annette L. Hayes. CINDI ALLISON, now of Ben Wheeler, Texas, used her unfettered access to the bank accounts of Windermere Puyallup and Windermere South Sound to embezzle $478,398. ALLISON was remanded to custody following the jury verdict this morning. Sentencing is scheduled before U.S. District Judge Ronald B. Leighton on October 6, 2017.

 

          During a four-day jury trial, prosecutors presented evidence that ALLISON transferred money from Windermere accounts to her own bank accounts and those of her boyfriend, ex-husband, and service providers such as a roofer in Ben Wheeler, Texas. Between 2011 and 2015, ALLISON made 782 unauthorized transfers from the two real estate franchise accounts to sixteen different accounts that all had some connection to ALLISON. As the bookkeeper, ALLISON made various entries in the records to make the transfers appear legitimate. The fraud came to light in March 2015, when the owner of the two franchises decided to sell the South Sound Windermere franchise because the company was not generating enough income compared to expenses. The purchaser started investigating some of the transfers and could not get straight answers from ALLISON. ALLISON had been working remotely from Texas as the bookkeeper, and the company shut down the computer system to protect its accounts.

 

          The U.S. Secret Service began investigating the wire fraud in August 2015. When questioned, ALLISON claimed she had embezzled the money to support her boyfriend’s drug habit.

 

          The case was investigated by the U.S. Secret Service. The case is being prosecuted by Assistant United States Attorneys Andre Peñalver and Steven Masada.

           A 24 -year-old Seattle man was sentenced today in U.S. District Court in Seattle to five years in prison and five years of supervised release for three felony counts related to illegal gun possession and drug distribution, announced U.S. Attorney Annette L. Hayes. DION VINCENT HOOKS survived an August 2015, gun battle inside a car at a downtown Seattle Shell gas station. In the shooting, another young man was shot in the head and killed. The shooting occurred during a drug deal involving HOOKS and three others. Hooks pleaded guilty last March to being a felon in possession of a firearm, possession of marijuana with intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime. At sentencing U.S. District Judge Robert S. Lasnik said, “any number of people could have been shot and killed at that service station . . . with drunk felons with firearms.”

 

           “This case demonstrates yet again that guns and drugs don’t mix,” said U.S. Attorney Annette L. Hayes. “One person killed and bullets flying – with those who happened to be in the area very much at risk. My office is steadfastly committed to working with our state and local partners to prosecute federally those who risk the safety of our neighborhoods and communities without a second thought.”

 

           According to records filed in the case, two men drove into the Shell station on Denny Way in Seattle intending to do a drug deal. Different witnesses have said the deal was for marijuana, or for prescription cough syrup, or Xanax. What is known is that after HOOKS and another man got into the back seat of the car, gunfire erupted and 22-year-old Wafi Kilaouy was shot in the head and killed. Frankie Miranda and HOOKS were both shot but survived. The car’s driver managed to get out of the car uninjured and fled the scene. Miranda was sentenced last month to ten years in prison. The forensic evidence indicates HOOKS did not fire his weapon.

 

          The shooting on Lower Queen Anne Hill was the latest in a string of convictions for HOOKS. As a juvenile he was convicted of unlawful possession of a firearm following a “shots fired” incident at Laurelhurst Park in Seattle. In 2010, HOOKS was convicted of robbery and second degree assault with a deadly weapon for robbing two school classmates at gunpoint. In 2011, HOOKS was sentenced to four years in prison for promoting prostitution. He was released from custody about a year before the shooting in this case.

 

           In imposing the sentence, Judge Lasnik noted that after he was shot, but before he was arrested in this case, HOOKS had turned his life around and abandoned his criminal lifestyle.

 

           The investigation revealed that three days before the shooting at the Shell station, HOOKS and Kilaouy burglarized a marijuana store in North Seattle while armed with at least one firearm.

 

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

 

           A former Oak Harbor Police Officer was sentenced today in U.S. District Court in Seattle to 42 months in prison and 10 years of supervised release for possession of child pornography, announced U.S. Attorney Annette L. Hayes. JOHN LITTLE, 55, pleaded guilty in March 2017. LITTLE came to the attention of law enforcement in the summer of 2016, when he was identified as someone who had exchanged sexually explicit messages with a 13-year-old girl in New Mexico. When confronted by FBI agents, LITTLE admitted using the Kik internet messaging app to engage in sexually explicit chats and image/video exchanges with several minors. At the sentencing hearing, Chief U.S. District Judge Ricardo S. Martinez ordered LITTLE to register as a sex offender and said, “the possession of child pornography creates and maintains the market for the sexual exploitation of children.”

 

           “Not only did this defendant betray the trust the community placed in him as a police officer, but the fact that he once served as a school resource officer makes his crimes all the more troubling,” said U.S. Attorney Annette L. Hayes. “Our children deserve better. The lengthy sentence imposed today will ensure this defendant can no longer victimize the most vulnerable in our communities.”

 

           According to records filed in the case, after law enforcement identified LITTLE as the person engaged in the sexually explicit chats with the New Mexico teen, agents served a search warrant on LITTLE’s home. A forensic examination of LITTLE’s phone revealed a number of sexually explicit chats and picture/video exchanges between LITTLE and minors. Law enforcement also identified several dozen videos of child pornography stored on his phone.

 

          LITTLE served for more than 27 years as an Oak Harbor Police Officer.

 

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

 

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

          The leader of a prescription forgery ring that distributed hundreds of thousands of pills of oxycodone was sentenced today in U.S. District Court in Tacoma to 76 months in prison and 5 years of supervised release, announced U.S. Attorney Annette L. Hayes. ANTHONY BALLENGER, 29, pleaded guilty in March 2017 to unauthorized access to a protected computer, aggravated identity theft, and conspiracy to distribute oxycodone. At the sentencing hearing U.S. District Judge Ronald B. Leighton said, “The greatest common denominator with criminal activity in this society is drugs…This is a serious offense—it has a corrosive effect on trust in our institutions and healthcare.”

 

          “This defendant is responsible for thousands of dangerous pills ending up in the wrong hands,” said U.S. Attorney Annette L. Hayes. “We are in the midst of an opioid crisis that is killing too many members of our community. I commend investigators who uncovered this defendant’s crimes and put him out of business.”

 

          According to records filed in the case, BALLENGER was the leader of a sophisticated ring that stole identity information of various medical professionals to forge prescriptions for powerful painkillers. The conspirators used stolen DEA registration numbers to create phony prescriptions while using various online tools to make it appear that the prescriptions had been issued by actual medical providers. In order to lull pharmacies into filling the prescriptions, BALLENGER illegally accessed various online databases, including government databases, and altered the contact information for the medical professionals to divert inquiries from pharmacies to himself. BALLENGER also posed as the medical professionals whose identities he stole when accessing online prescription-delivery systems, which he then used to send electronic prescriptions to pharmacies throughout Western Washington. After obtaining thousands of pills, the conspirators distributed them to users throughout the Puget Sound region.

 

          Co-defendant Lea Espy, 49, of Auburn, Washington, who used the fake identities to obtain the drugs at pharmacies is scheduled to be sentenced next month. Two other defendants are currently participating in the Drug Reentry Alternative Model (DREAM) court in the district. A fourth defendant, Stosh Satkowski, 24, of Tacoma is currently a fugitive.

          The case was investigated by the Drug Enforcement Administration’s Tactical Diversion Squad which contains task force officers from Tacoma and Seattle Police Departments and the Washington State Patrol.

          The case is being prosecuted by Assistant United States Attorney Siddharth Velamoor.

WASHINGTON - On World Elder Abuse Awareness Day, our nation joins the world in voicing our opposition to elder abuse, neglect, and financial exploitation. On this day, the Department of Justice extends its support to elder victims and their loved ones, recognizing with gratitude those who have committed their lives to protecting older Americans, and affirms its unwavering commitment to combatting elder mistreatment in all its forms.

 

          The U.S. Census Bureau projects that the population of Americans over 65 years of age will increase to 83.7 million in 2050, nearly double its estimated population of 43.1 million as of the most recent census. While many Americans are enjoying longer, healthier lives, far too many older Americans are suffering in the shadows. Some studies suggest that 10 percent of seniors may suffer some form of physical abuse, psychological or verbal abuse, sexual abuse, financial exploitation or neglect. Likewise, other studies suggest that older adults may suffer billions in losses as a result of financial fraud, and that being victimized by financial fraud could lead to higher rates of hospitalization and mortality.

 

           “On World Elder Abuse Awareness Day, the Department of Justice gives voice to those who have suffered from elder abuse, neglect, fraud and exploitation and commits to supporting those who combat elder mistreatment every day,” said Attorney General Jeff Sessions. “The department is dedicated to actively working with our federal agency partners as well as state, local and international law enforcement, prosecutors and civil attorneys, counselors and case workers, and healthcare professionals to address the growing problem of crime targeting the nation’s seniors.”

 

           “The U.S. Attorney’s Office in the Western District of Washington is working with its state, local and tribal partners to protect seniors from abuse, neglect, fraud and exploitation,” said U.S. Attorney Annette L. Hayes. “We recently posted a new complaint form on our website that allows those who have information about elder abuse in our community to get it to law enforcement authorities so that it can be properly addressed.”

 

          The Department of Justice, through its Elder Justice Initiative, which includes the work of many Department components, is working on multiple fronts to protect older Americans from elder mistreatment. The Department has aggressively prosecuted mass mailing fraud schemes, such as Jamaican lottery and psychic scams, many of which are international in nature and target seniors. The Department also launched 10 regional Elder Justice Task Forces across the country in California, Georgia, Kansas, Kentucky, Iowa, Maryland, Ohio, Pennsylvania, Tennessee, and Washington to enhance the ability of federal, state, and local authorities to work together to combat elder financial fraud and to pursue those nursing homes that provide grossly substandard care to their Medicare and Medicaid residents. Additionally, in 2016, the Department’s Office for Victims of Crime and the Elder Justice Initiative, in partnership with the Corporation for National and Community Service, established the two-year Elder Justice AmeriCorps program, which received $2 million in Justice Department grant funding to provide legal assistance and support services to victims of elder abuse, neglect and exploitation. Lastly, the Department actively supports state and local efforts to prevent and combat elder abuse in a variety of ways, including:

 

• Helping older victims and their families by connecting them to available resources, assistance and information on its Elder Justice website: www.elderjustice.gov;

   

• Advancing our collective understanding of elder abuse through projects like the Elder Abuse Prevention Demonstration Project: www.justice.gov/elderjustice/pr/national-institute-justice-awards-funding-study-elder-abuse;

   

• Enhancing state and local efforts to combat and prevent elder abuse through the development and dissemination of training materials and resources for prosecutors, law enforcement, civil legal aid workers, victim specialists, and clinicians; and

 

• Raising public awareness of elder abuse and financial exploitation through the Elder Justice website, webinars, and public meetings.

 

          While some progress has been made in stemming the tide of elder abuse and financial exploitation, there is so much that we still must accomplish.So, on this World Elder Abuse Awareness Day, we ask all Americans to join the Department of Justice in redoubling its efforts to prevent and combat all forms of elder abuse, neglect, and financial exploitation.

 

          More information about the Department of Justice’s elder justice efforts can be found on its Elder Justice Website at https://www.justice.gov/elderjustice.

          Two men who were involved in the delivery of a fatal dose of heroin to a young member of the Quileute Tribe were each sentenced June 12, 2017, to 42 months in prison, announced U.S. Attorney Annette L. Hayes. HUGH BROWN, 60 and EDWARD FOSTER, 56, and co-defendant Casey Marie Ward, 28, sold heroin to 28-year-old Felisha Jackson on September 5, 2015. Moments after that sale, Jackson was found unresponsive by her 9-year-old daughter. Paramedics tried to save Jackson, but she died a few days later at a hospital. Social media records reveal that WARD had reached out to Jackson, asking if she knew anyone interested in buying drugs. FOSTER obtained the heroin the three were selling, and BROWN provided the transportation, driving them onto Quileute Tribal land. Speaking of heroin at BROWN’s sentencing hearing, U.S. District Judge Benjamin H. Settle said, “This is a dangerous drug. People do die—and in increasing numbers—from it, and if you’re going to be involved in the distribution of this drug, you can expect lives will be lost . . . you can expect to go to prison.”

 

          “The heroin epidemic is taking a particularly heavy toll in Tribal communities so we are working closely with our Tribal partners to do our part to combat opioid abuse,” said U.S. Attorney Annette L. Hayes. “Cases involving small amounts of heroin are not routinely charged in federal court, but in appropriate cases where dealing on Tribal lands leads to death, we are committed to seeking just punishment. As Tribes work to provide treatment and wellness resources, law enforcement must do its part to deter those who target Tribal communities and cause tragedies like those in this case.”

 

          According to records filed in the case, Felisha Jackson had struggled to stay clean for her three small children. Another drug user said the heroin sold by Ward, BROWN, and FOSTER proved particularly powerful. After Jackson’s daughter found her mother unresponsive, she got her grandfather, and he called 911 and performed CPR in an ultimately futile effort to save his daughter.

 

          Members of the Quileute Tribal Council attended the sentencing hearings. In a written statement to the Court, the Tribe said “[t]he Quileute Tribe is attempting to stem the tide of substance abuse in several ways, including coordinating with local, state, and federal law enforcement agencies . . . providing chemical dependency treatment, and working on several initiatives to promote wellness and prevent addiction.”

 

          Ward was sentenced to 42 months in prison on June 5, 2017.

 

          The case was investigated by the FBI and the Quileute Tribal Police. The case is being prosecuted by Assistant United States Attorney Nicholas Manheim.

         

           If you, or someone you know, would like information about resources for those suffering from a heroin or other substance abuse addiction, you can call the 24 hour Washington Recovery Helpline at 1 866-789-1511, or go to the University of Washington Alcohol and Drug Institute website. If you are between 13 and 20 years old you can also call Teen Link at 1866TEENLINK (1 866 833 6546) to talk to a teen volunteer.

 

          A member of the Muckleshoot Indian Tribe who sold a fatal dose of heroin to a young Quileute Tribal member was sentenced today to 42 months in prison, announced U.S. Attorney Annette L. Hayes. CASEY MARIE WARD, 28, and two co-defendants sold heroin to 28-year-old Felisha Jackson on September 5, 2015. Moments after that sale, Jackson was found unresponsive by her 9-year-old daughter. Paramedics tried to save Jackson, but she died a few days later at a hospital. Social media records reveal that WARD had reached out to Jackson, asking if she knew anyone interested in buying drugs -- it was that contact that led to WARD delivering the fatal dose. At the sentencing hearing U.S. District Judge Benjamin H. Settle said, “it is important that the message go out that if you are going to engage in this type of activity and someone dies as a result, you will receive a significant prison term…. A person lost their life…. Those who are addicted and using are playing a game of Russian roulette. There will be a bullet in the chamber and somebody is going to die.”

 

          “The heroin epidemic is taking a particularly heavy toll in Tribal communities so we are working closely with our Tribal partners to do our part to combat opioid abuse,” said U.S. Attorney Annette L. Hayes. “Cases involving small amounts of heroin are not routinely charged in federal court, but in appropriate cases where dealing on Tribal lands leads to death, we are committed to seeking just punishment. As Tribes work to provide treatment and wellness resources, law enforcement must do its part to deter those who target Tribal communities and cause tragedies like those in this case.”

 

          According to records filed in the case, Felisha Jackson had struggled to stay clean for her three small children. Another drug user said the heroin sold by WARD and her co-defendants proved particularly powerful. After Jackson’s daughter found her mother unresponsive, she got her grandfather, and he performed CPR in an ultimately futile effort to save his daughter.

 

          WARD too has a history of substance abuse. Judge Settle recommended that she receive drug treatment both in prison and as part of her supervised release following incarceration.

 

          Members of the Quileute Tribal Council submitted a statement to the Court and attended the sentencing hearing. “Our community was devastated by the death of Felisha Jackson, a 28 year old mother of three,” the Tribal Council wrote. It further explained that “[t]he Quileute Tribe is attempting to stem the tide of substance abuse in several ways, including coordinating with local, state, and federal law enforcement agencies . . ., providing chemical dependency treatment, and working on several initiatives to promote wellness and prevent addiction.”

 

          Co-defendants Hugh Brown and Edward Foster are scheduled for sentencing later this month.

 

          The case was investigated by the FBI and the Quileute Tribal Police. The case is being prosecuted by Assistant United States Attorney Nicholas Manheim.

 

          If you, or someone you know, would like information about resources for those suffering from a heroin or other substance abuse addiction, you can call the 24 hour Washington Recovery Helpline at 1 866-789-1511, or go to the University of Washington Alcohol and Drug Institute website (link is external). If you are between 13 and 20 years old you can also call Teen Link at 1866TEENLINK (1 866 833 6546) to talk to a teen volunteer.

          SUNG HONG, 45, and HYUN JOO HONG, 41, a Clyde Hill, Washington couple were arrested this morning on federal charges they defrauded multiple clients out of hundreds of thousands of dollars, announced U.S. Attorney Annette L. Hayes. SUNG HONG, aka LAURENCE HONG or LAWRENCE HONG, and his wife, HYUN JOO HONG, aka GRACE HONG, held themselves out as experienced investment advisors with a track record of performance in order to solicit investor funds for their hedge fund, Pishon Holdings, and for management through separately managed accounts. Authorities are still assessing the total amount of fraud in the case, but since 2011, the HONGs have solicited several million dollars in investor funds from numerous clients, and the losses to just three victims exceed $500,000. The HONGs will make their initial appearance in U.S. District Court in Seattle at 2:00 today.

 

          According to records filed in the case, the HONGs recruited investors using religious organizations and shared religious beliefs. The couple claimed that LAURENCE HONG privately invests money for wealthy Korean families and that GRACE HONG holds a Series 65 securities license and previously worked for a large international investment firm. None of these statements appear to be true. Nor was LAURENCE HONG’s past history disclosed. The couple sent potential customers misleading and false investment prospectuses that contained an inaccurate record of their past investment performance and other plagiarized investment outlooks. They further misled investors as to the advisor fees they would charge and the amount of their funds that would be at risk.

 

          The HONGs used investor funds for their own benefit. One church in California invested $1 million with the HONGs and lost about $300,000 on a single trade. Still, despite the steep losses and a fee arrangement based on investment gains, the HONGs withdrew almost $150,000, ostensibly as advisor fees, from the church’s account. Another couple allowed the HONGs to manage their $180,000 in retirement funds only to lose $100,000 within less than a year. After meeting with the HONGs, that couple then invested their remaining retirement funds in the HONGs’ hedge fund, only for those funds to be redirected into GRACE HONG’s personal account. The HONGs used those funds to pay credit card bills and other personal expenses, including a $16,000 payment to a resort in the Bahamas for a HONG family vacation.

 

          Investigators have identified over $2 million in additional losses in several other investor accounts managed by the HONGs. The financial investigation to date has revealed investor money was used to pay for the HONGs’ extravagant lifestyle, which included a 9,000 square foot rental home in Clyde Hill; a 45-foot yacht; multiple high-end vehicles, such as BMWs, a Maserati, and a Lamborghini; and lavish vacations.

 

          The FBI is investigating the case and is still determining the number of victims and the amount of fraud loss. Those who believe they have information about this case, please contact seattle.fbi@fbi.gov or call 206-622-0460.

 

          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.

 

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

 

          The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Steven Masada.

 

          A former Captain of the Idaho and Washington National Guard was sentenced today in U.S. District Court in Tacoma to three years in prison, three years of supervised release, and $646,300 in restitution for his lengthy scheme to defraud multiple government programs, announced U.S. Attorney Annette L. Hayes. DARRYL LEE WRIGHT, 48, who served as Chairman of the City of Snoqualmie Planning Commission, pleaded guilty to two counts of wire fraud in February 2016, admitting he defrauded the Veterans Administration, Social Security Disability, Washington State Employment Security, the Department of Commerce and others with his claims of being injured while serving in Iraq with the Army National Guard. In fact, WRIGHT lied about being injured in a rocket attack and submitted pictures of destruction which had no connection to his service in Iraq. At today’s sentencing hearing U.S. District Judge Benjamin H. Settle said Wright dragged “many people into a web of deceit . . . this was a complex and nefarious scam implemented over a long period of time . . . it was a continuous fraud. . . a very lucrative scheme.”

          “This defendant brazenly lied about his combat history to get more than $600,000 in benefits he did not deserve,” said U. S. Attorney Annette L. Hayes. “His willingness to steal from a system meant to take care of those who have bravely served our country, or are otherwise in need, is an outrage. There is no question that the defendant earned the significant sentence he will now serve for his crimes.”

 

          As early as 2006, WRIGHT began his scheme to defraud by submitting phony statements to the Army and to the Veterans Administration to create the false narrative that he had been injured in a rocket attack. As the scheme progressed over the years, WRIGHT made false and conflicting claims to various agencies in an effort to fraudulently obtain benefits. Government investigators estimate that WRIGHT’s frauds cost government programs some $737,539. The Army has stripped WRIGHT of his Purple Heart Medal and Combat Action Badge.

          In an evidentiary hearing lasting six days, the government presented evidence that WRIGHT defrauded Veteran’s Benefit Administration of $261,719 in claiming he was disabled by a rocket attack that did not occur as he described. WRIGHT then defrauded a Veteran’s Caregiver program of $83,967 claiming he was so disabled he needed a full time caregiver even as he was traveling, playing basketball, caring for his child and serving on the Snoqualmie Planning Commission. He defrauded Social Security Disability of $181,438 claiming he was too injured to work even though at the time he was employed full time by the U.S. Department of Commerce. Later in the scheme, WRIGHT defrauded the Office of Personnel Management of some $48,226 by claiming disability from his job at the Department of Commerce. WRIGHT defrauded Washington State Employment Security by collecting $29,860 in unemployment benefits claiming he was able and willing to work while simultaneously claiming to the Social Security Administration that he was fully disabled and unable to be employed. WRIGHT further used his disability status to avoid repayment of more than $41,068 in student loans to the Department of Education. Finally, WRIGHT defrauded his employer, the Department of Commerce, by submitting fake orders claiming he was on military leave.

          In all, pleadings indicate that Wright victimized 16 different federal, state, local, and private entities, including agencies, programs, organizations, individuals and benevolent institutions such as Disabled American Veterans.

          “This conviction demonstrates the VA Office of Inspector General’s unwavering commitment to protect the programs intended to assist veterans that have served this nation and rightfully earned their benefits,” said Special Agent in Charge James Wahleithner, VA Office of Inspector General, Criminal Investigations Division.

 

          “The primary mission of the Office of the Inspector General for the Social Security Administration is to investigate allegations of fraud, waste, and abuse in Social Security programs. In this charge, we are incredibly grateful for our law enforcement partnerships and for the collaborative approach to crime fighting demonstrated by the Wright investigative and prosecutorial team. The results of this powerful force-multiplier are quite evident given today’s sentencing, and will undoubtedly send a message to those who would otherwise attempt to defraud Social Security,” said Steuart G. Markley, Jr., Special Agent in Charge, SSA OIG, Seattle Field Division.

 

          “Mr. Wright not only betrayed the trust of the American people and his fellow veterans by fraudulently accepting these military honors, he bilked Washingtonians who actually deserve this help out of nearly $30,000 in unemployment insurance benefit funds,” said Dale Peinecke, Commissioner of the state’s Employment Security Department, which administers the unemployment insurance system and serves veterans through the WorkSource system. “We are proud to help veterans with disabilities find employment and we’re pleased to be part of the team that brought this case to justice.”

 

          “The Department of Commerce Office of Inspector General is dedicated to stopping fraudulent activities like this in programs designed to support America's deserving veterans,” said Inspector General Peg Gustafson. “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their leadership and dedication to serving Justice.”

 

          “We will continue to work with our law enforcement partners to hold accountable brazen fraudsters such as Mr. Wright,” said U.S. General Services Administration Inspector General Carol Fortine Ochoa.

 

          “PTSD is a serious medical condition and it is unconscionable that Mr. Wright would fake such an injury for financial gain,” said Scott Rezendes, Special Agent in Charge of Office of the Inspector General, U.S. Office of Personnel Management. “I would like to thank the OPM OIG agents who worked on this case and our law enforcement partners for their diligent efforts to safeguard OPM’s retirement programs from fraud and abuse. Our office remains committed to ensuring that OPM’s disability payments are made only to those Federal annuitants who have a right to them.”

 

          The case was investigated by multiple agencies led by the Social Security Office of Inspector General (SSA-OIG). The Office of Inspector General of these agencies were involved in the investigation: Veterans Affairs (VA-OIG), Department of Commerce (DOC-OIG), Office of Personnel Management (OPM-OIG), and General Services Administration (GSA-OIG). Also contributing to the investigation was the FBI, U.S. Army Criminal Investigation Division, the Washington National Guard, the Washington Employment Security Department and the Washington State Department of Social and Health Services.

          The case is being prosecuted by Assistant United States Attorneys David Reese Jennings and Gregory A. Gruber.

 

          The Department of Justice announced today that it has reached a settlement agreement with Pierce County Transportation Benefit Area Corporation of Pierce County, Washington. The settlement resolves allegations that Pierce Transit violated the employment rights of Washington Army National Guard Member Lieutenant Colonel C. Van Sawin guaranteed by the Uniformed Services Employment and Reemployment Rights Act. USERRA safeguards the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations.

 

           Pierce Transit, headquartered in Lakewood, Washington, is a municipal corporation and an operator of public transit in Pierce County, Washington, located south of Seattle. According to allegations brought by LTC Sawin, and independently investigated by the DOJ, Pierce Transit violated USERRA by failing to reemploy LTC Sawin in September 2016 after he returned from active duty military service. Pierce Transit worked cooperatively with DOJ during its investigation and worked to reach a settlement that addressed the USERRA violation found by the Department.

 

              LTC Sawin is a United States Military Academy graduate, who served on active duty as a U.S. Army Battalion Maintenance Officer. LTC Sawin has also served as a reservist and, between 2005 and 2006, deployed to Iraq in support of Operation Iraqi Freedom. LTC Sawin was hired by Pierce Transit in 2007 and rose to become its Business Development Officer. In November 2015, LTC Sawin was activated to help lead the Washington National Guard’s earthquake readiness exercise, code named “Evergreen Tremor” – a weeklong exercise involving more than 1000 Washington National Guard soldiers and airmen across the state, as well as local, state and federal emergency response agencies. The drill took place in the Summer of 2016. Following the drill, LTC Sawin re-applied for his position in September 2016. Pierce Transit declined to re-employ LTC Sawin, stating that, while he was on active duty (in March 2016), it had laid him off following a reorganization that eliminated his position.

 

              Under the terms of the settlement agreement, which is not an admission of liability by Pierce Transit, Pierce Transit must pay LTC Sawin $105,000 to compensate him for lost and/or reduced wages and benefits, and other damages. Additionally, the settlement seeks to reduce the likelihood of future USERRA violations by requiring Pierce Transit to adopt a USERRA policy, to provide training to its high-level officials and human resources staff on the USERRA rights and obligations of employers and covered employees, and to report allegations of violations of USERRA and certify its compliance therewith to the DOJ for a period of two years. Pierce Transit also agreed to resolve any dispute about the agreement in the United States District Court for the Western District of Washington.

 

               “Failure to reemploy a person who leaves their job because of military deployment, service, or training is a violation of the law,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “The Justice Department will ensure that service members like LTC Sawin, who was called away from his job in order to serve the country in the National Guard, can complete their military obligations without fear that by doing so, they will lose their civilian jobs.”

 

           “We are fortunate to have many National Guard servicemen and women who live in western Washington who are prepared to sacrifice time with their families and civilian jobs to serve our country,” said U.S. Attorney Annette L. Hayes. “Our job in the United States Attorney’s Office is to protect the rights of these citizen soldiers and to hold accountable employers who fail to meet their duties under the law.”

 

            Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment been not interrupted by military service, or in a position of like seniority, status and pay. Following a referral from the Department of Labor, the United States Department of Justice is authorized to bring claims on behalf of the men and women of our nation’s Armed Forces and veterans to recover employment rights including back pay, benefits and injunctive relief.

 

            The matter was investigated and resolved by Assistant U.S. Attorney and Civil Rights Program Coordinator, J. Michael Diaz and Assistant U.S. Attorney Sarah Morehead in the U.S. Attorney’s Office for the Western District of Washington, in collaboration with Andrew Braniff, USERRA/USAO Program Coordinator, in the Employment Litigation Section of the Civil Rights Division of the Justice Department.

 

           The Justice Department’s Civil Rights Division have given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

          A 32-year-old Mount Vernon, Washington man was sentenced today in U.S. District Court in Seattle to 15 years in prison for possession and distribution of child pornography, announced U.S. Attorney Annette L. Hayes. ERIC BONGIORNI was arrested in March 2016, when a court authorized search warrant revealed he had numerous images and videos of child sexual abuse on his electronic devices. BONGIORNI pleaded guilty in February 2017. At sentencing, U.S. District Judge Robert S. Lasnik also imposed a lifetime period of supervised release.

         

          According to records filed in the case, an agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) was working online in an undercover capacity when he downloaded images of child pornography being shared over a peer-to-peer file sharing network. The investigation linked the images to an internet protocol address (IP address) belonging to BONGIORNI. The law enforcement investigation revealed BONGIORNI is a registered sex offender, with a 2009 conviction in Skagit County Superior Court for three counts of child molestation.

 

          In his plea agreement, BONGIORNI admits he collected child pornography since 2003. One device seized at his home contained 436 images and 267 videos of child pornography.

         

          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 U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case was prosecuted by Assistant United States Attorney Matthew Hampton.

          A 25-year-old Seattle man was sentenced today in U.S. District Court in Seattle to ten years in prison and five years of supervised release for three felony counts related to illegal gun possession, announced U.S. Attorney Annette L. Hayes. FRANKIE MANUEL MIRANDA survived an August 2015, gun battle inside a car at a downtown Seattle Shell gas station. In the shooting, another young man was shot in the head and killed. The shooting occurred during a drug deal involving MIRANDA and three others. At sentencing U.S. District Judge Robert S. Lasnik said, “The Defendant armed himself not once, but three times with a firearm. His decisions resulted in tragic consequences and death.”

 

          “This case demonstrates yet again that guns and drugs don’t mix,” said U.S. Attorney Annette L. Hayes. “The devastating results are clear – one dead and a number of others who came far too close to the unthinkable. My office is steadfastly committed to working with our state and local partners to bring federal charges against convicted felons who flout the law and illegally possess firearms.”

 

          According to records filed in the case, MIRANDA and another man drove into the Shell station on Denny Way in Seattle intending to do a drug deal. Different witnesses have said the deal was for marijuana, or for prescription cough syrup, or Xanax. What is known is that after two other men got into the back seat of the car, gunfire erupted and 22-year-old Wafi Kilaouy was shot in the head and killed. MIRANDA and a third man, Dion Hooks – also charged federally – were both shot but survived. The car’s driver managed to get out of the car uninjured and fled the scene.

 

          The shooting on Lower Queen Anne Hill followed two other incidents in which MIRANDA, a convicted felon, illegally possessed firearms. As part of the resolution of the case, MIRANDA has pled guilty to two other felonies: possession of a stolen .40 caliber Smith and Wesson handgun in December, 2013; and possession of a stolen Glock .357 semi-automatic handgun in January 2014.

 

          King County prosecutors, working with their federal partners, determined that MIRANDA could argue self-defense in connection with any charges brought for the death of Wafi Kilaouy. The resolution in federal court holds MIRANDA responsible for multiple instances of illegal firearms possession. MIRANDA has a prior adult conviction for the unlawful possession of a firearm.

 

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

          The former defense contractor for an Alaska company operating in the State of Washington was sentenced on Friday, May 12, 2017, in U.S. District Court in Tacoma to 18 months in prison and one year of supervised release, for filing a false tax return, announced U.S. Attorney Annette L. Hayes. BRENT S. MEISNER, 59, was convicted of tax fraud after a court trial. He was ordered to pay $41,706 in restitution for the taxes he failed to pay. At the sentencing hearing U.S. District Judge Ronald B. Leighton said MEISNER’s “arrogance” led to the crime. “We have to do our part to uphold the tenets (of our country). It starts with the rule of law. This was an affront to the rule of law in many ways.”

          According to records filed in the case, the investigation found that MEISNER and others embezzled more than $200,000 in labor, materials, overhead, and money from Doyon, Ltd., to remodel MEISNER’s Gig Harbor home. Doyon, Ltd. (Doyon) is an Alaska Native regional economic development corporation that hired MEISNER to serve as president of Doyon/Cherokee, a construction company that specialized in federal, state, and local public construction contracting. On July 31, 2009, MEISNER purchased a home in Gig Harbor, Washington, which he wanted to remodel. MEISNER, and his co-defendant, Brady Farley, and others directed Doyon/Cherokee construction workers to report to the new MEISNER home to work on the remodel. Everybody who worked on the job or delivered materials understood it to be a private job for the benefit of Mr. MEISNER.

          To pay for and simultaneously conceal the costs of MEISNER’s remodel, Farley and others falsified records, fabricated subcontracts, altered accounting records, and in some instances destroyed records. They falsified timecards, falsified invoices, and falsified bills, labelling them as expenses on government jobs rather than work performed on the MEISNER remodel. The false records made it difficult for others to detect or reconstruct what was going on. MEISNER threatened his superiors in Alaska with retaliation if they reported his conduct to federal authorities. MEISNER ultimately admitted to using company money to remodel his home, but argued he was authorized to do so. He further admitted to instructing a painter to create false invoices so he could present them to his employer.  Farley was acquitted in the bench trial.

          Evidence presented at trial showed that MEISNER failed to include roughly $170,000 in his 2009 federal individual income tax returns. MEISNER reported more than $300,000 in salary and bonuses from Doyon in his 2009 federal income tax returns, but failed to report any of the money he stole, converted, embezzled or got in the form of kickbacks. The evidence introduced by the United States and the defense established that MEISNER reported total earnings (wages and bonus) for 2009 of $332,841. MEINSER failed to report an additional $169,563 in labor and materials he received for his home remodel.

          The case was investigated by Federal agents from the Defense Criminal Investigative Service (DCIS), the Naval Criminal Investigative Service (NCIS), Army CID Major Procurement Fraud Unit and the Internal Revenue Service Criminal Investigation (IRS-CI). The case was prosecuted by Assistant United States Attorneys David Jennings and Siddharth Velamoor.

          A former Des Moines, Washington man was sentenced today in U.S. District court in Seattle to 27 years in prison and lifetime of supervised release for producing and possessing images of child pornography, announced U.S. Attorney Annette L. Hayes. ROBERT D. THORSON, 58, was convicted following a four-day trial in February 2017. THORSON was arrested May 30, 2016, after his girlfriend called Des Moines police after finding sexually explicit images of minors on THORSON’s phone. At sentencing Chief U.S. District Judge Ricardo S. Martinez said, “This is one of the most egregious cases this Court has handled. . . Mr. Thorson repaid the kindness shown to him [by two families] by sexually abusing and exploiting the children.”

 

          “This defendant sought relationships with women so that he could molest their children, said U.S. Attorney Annette L. Hayes. “He insinuated himself into the lives of the families he preyed on and when his crimes were discovered, he threatened them from prison to try to get the charges against him dropped. There is no question that the public – and especially our kids – are safer as a result of the lengthy sentence imposed in his case.”

 

          According to records in the case and testimony at trial, THORSON’s girlfriend examined his phone looking for evidence he was seeing other women. Instead she found images of THORSON molesting young girls who resided in her home. The woman called Des Moines Police and THORSON was arrested. When investigators examined THORSON’s electronic devices they found images showing THORSON disturbing the clothing and bedding of sleeping children so he could make sexually explicit photos. THORSON’s clothing, tattoos and body parts appear in some of the images. THORSON’s electronic devices also contained images from a hidden camera installed in a bathroom at the home that captured minor children using the bathroom and the shower. The electronic evidence presented at trial revealed THORSON preyed on a second family when he briefly stayed in their home in 2015.

 

          In addition to the images of child molestation that he produced, THORSON also had images of other children being raped and molested that he collected from the internet. THORSON’s electronic devices had 22 videos and 40 images of children being raped by adults. One two-hour video THORSON had on his electronic devices shows the rape of a 4 year old child by an adult male.

    

          While THORSON was in custody he sent letters to his former girlfriend threatening her and demanding she change her statements to police.

 

          “Not only did Thorson violate innocent children as they slept for his own sexual gratification, he used threats and coercion in an attempt to cover up these heinous acts,” said Brad Bench, special agent in charge of HSI Seattle. “In partnership with local law enforcement, investigators successfully presented the evidence needed for a jury to bring justice to this predator.”

 

          The case was investigated by the Des Moines Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

 

          The case was prosecuted by Assistant United States Attorney Stephen Hobbs and Special Assistant United States Attorney Cecelia Gregson. Ms. Gregson is Senior Deputy Prosecuting Attorney specially designated to prosecute child exploitation cases in federal court.

A 67-year-old resident of Napa, California was sentenced today in U.S. District Court in Seattle to five years in prison, announced U.S. Attorney Annette L. Hayes. TERRANCE L. COSGROVE pleaded guilty in December 2016 to two counts of wire fraud and one count of mail fraud for a series of embezzlements totaling nearly $4 million. The funds were stolen from a fishing company and from trusts set up by COSGROVE’s close friends to provide for those friends’ wives and children. At sentencing U.S. District Judge John C. Coughenour also imposed restitution in the amount of $2,915,916, and a forfeiture money judgment in the amount of $3,936,977.

 

“This defendant carefully tended a veneer of honesty and loyalty, while betraying those who trusted him most,” said U.S. Attorney Annette L. Hayes. “He stole not only from his business partners but from the widow and children of close friends. The significant prison sentence imposed in this case is the proper ending to this callous crime.”

 

“By pillaging the finances of close friends’ families, Mr. Cosgrove subjected to further trauma the very people he pledged to help,” said Assistant Special Agent in Charge Carlos Mojica. “He exploited his immense responsibility as a business partner and trustee to fuel his greed. Thanks to the exhaustively detailed work of forensic accountants working alongside investigators for years, Mr. Cosgrove faces justice for his despicable betrayal.”

 

According to records filed in the case, COSGROVE engaged in a series of thefts. First in 2009, the partners in a fishing company called ISP Trading discovered that COSGROVE had been taking management fees in excess of the fees the partners had authorized. COSGROVE embezzled more than $3 million.

 

The two other embezzlement schemes involved theft from accounts where COSGROVE had been appointed as a trustee by close friends. In 2013, the widow of one of COSGROVE’s close friends discovered that COSGROVE had depleted the trust that had been set up by her husband. COSGROVE stole more than $335,000. The widow was forced to sell the family home to avoid foreclosure because of the thefts. In the third criminal scheme, between 2011 and 2012, COSGROVE diverted funds that had been set up to benefit the wife and children of a close friend. In this instance COSGROVE stole more than half a million dollars.

 

In his plea agreement COSGROVE admits he used the funds to live a life of luxury with multiple expensive homes, luxury cars, country club memberships and expensive hobbies such as wine collecting.

 

The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Francis Franze-Nakamura.

 

Press contact for the U.S. Attorney’s Office on May 9 and 10, 2017 is Colleen Bernier at (206) 553-7970. After May 10 please contact Public Affairs Officer Emily Langlie at (206) 553-4110 or Emily.Langlie@usdoj.gov.

 

A Seattle Police Officer is one of four people arrested May 6, 2017, in connection with a ring smuggling hundreds of pounds of marijuana from the Seattle area to Baltimore, Maryland, announced U.S. Attorney Annette L. Hayes. ALEX CHAPACKDEE, 44, of Seattle, is a 16-year veteran of SPD and is the brother-in-law of alleged ringleader TUAN VAN LE, 42, of Maple Valley, Washington. The other two men arrested are 32-year-old PHI NGUYEN, and 38-year-old SAMATH KHANHPHONGPHANE. All four men will make their initial appearances in U.S. District Court in Seattle at 2:00 p.m. today.

 

“The trafficking of hundreds of pounds of marijuana from Washington to the streets of Baltimore will not be tolerated,” said U.S. Attorney Annette L. Hayes. “Drug trafficking organizations that ignore federal and state laws have always been and will continue to be targeted and held to account. The fact that a police officer was involved in this is obviously of particular concern.”

 

An investigation by the Drug Enforcement Administration (DEA), the Seattle Police Department, Homeland Security Investigations and the FBI’s Public Corruption Squad revealed that on multiple occasions between June 2013, and April 2017, LE made trips between Seattle and Baltimore. While LE often flew one way or roundtrip, other members of the conspiracy made the trip by driving virtually non-stop. The vehicles allegedly carried marijuana to the Baltimore area and the cash proceeds back to Seattle. CHAPACKDEE participated in multiple trips driving his RV one or both ways in September, October and November, 2016. CHAPACKDEE, LE and the other conspirators linked up at both ends of the trip, apparently distributing drugs and the cash proceeds. Bank records indicate CHAPACKDEE deposited cash in his account in amounts just under $10,000 thereby avoiding reports to law enforcement.

 

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.

 

Conspiracy to distribute marijuana in these quantities is punishable by a mandatory minimum five years in prison and up to 40 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. The case was investigated by the FBI, DEA, Seattle Police Department and Homeland Security Investigations (HSI). Multiple agencies assisted with the arrests and the serving of search warrants including the Port of Seattle Police Department. The case is being prosecuted by Assistant United States Attorney Vince Lombardi.

 

Press contact for the U.S. Attorney’s Office is Public Affairs Officer Emily Langlie at (206) 276-5288 or Emily.Langlie@usdoj.gov.

          Six people are under arrest and law enforcement served court authorized search warrants at more than 30 locations as part of an investigation into an organized crime ring involved with prostitution, announced U.S. Attorney Annette L. Hayes. FANG WANG, 28, of Queens, New York, YONGGUANG WU, 27, YUNZHONG CHEN, 44, YAOAN HE, 32, ZHAOFENG ZHANG, 22, all of Seattle, and STEVEN THOMPSON, 59, of Renton, Washington, are charged by criminal complaint with conspiracy to use a communication facility to promote prostitution. ZHANG was arrested in Columbus, Georgia. YAOAN HE made his initial appearance in U.S. District Court in Seattle today. The rest of the defendants arrested in Western Washington will make their initial appearances in U.S. District Court in Seattle at 2:00 p.m. on Friday, May 5, 2017.

           “These defendants ran an organized prostitution ring with tentacles into many of our cities and towns,” said U.S. Attorney Annette L. Hayes. “The search warrants executed today are part of our ongoing investigation. We are committed to working closely with our state and local partners to ensure we identify and hold all those responsible to account, including anyone involved in human trafficking or exploitation crimes.”

           “Partnership is critical in dismantling organized crime syndicates like this one because they span multiple jurisdictions,” said Special Agent in Charge Jay S. Tabb, Jr. of the FBI’s Seattle Field Office. “Our goal is to disrupt networks, not just arrest select individuals or stem criminal activity in one area, only to watch it emerge in another. By working jointly across Washington, local, state and federal law enforcement partners can eliminate the threat that organized crime groups pose to our residents.”

           “Our work with our partners continues to expose the underbelly of this industry, and the unequal power dynamics at work within it,” said Sheriff John Urquhart. “Organized crime is a threat to the safety of our community, and we will continue working with our partners to disrupt it.”

           “The Bellevue Police Department will be relentless in its effort to rid our community of those who would take advantage of others for personal profit. I commend the hard work of our investigators and Federal partners in this joint effort,” said Bellevue Police Chief Steve Mylett.

           According to the complaint, federal and local law enforcement partners worked jointly to investigate a criminal ring making hundreds of thousands of dollars through the prostitution of Asian sex workers. In partnership with the Federal Bureau of Investigation, the King County Sheriff’s Office (KCSO) and police departments in Bellevue, Redmond, Renton, Seattle and Tukwila identified numerous brothel locations through their analysis of Backpage.com, cell phone, and other business records. The joint team of local and federal investigators then conducted surveillance of the ring’s activities. Law enforcement determined that multiple locations were linked to the organization via ads placed with websites such as Backpage.com. The investigation revealed that the same internet protocol (IP) addresses were used for placing many of the ads, and phone numbers associated with the ads were linked as well – in some instances to call centers located in New York and Washington, D.C. In other cases, the law enforcement agencies followed up on citizen complaints about apartments being operated as prostitution locations and confirmed that the organization was in fact conducting prostitution in those locations.

                 The investigation revealed that FANG WANG – the apparent leader of the operation – spent approximately $100,000 to increase the traffic to her ads on the Backpage.com site. Other defendants played different roles – renting apartments, transporting sex workers to various locations, purchasing supplies, collecting money from the sex workers and placing ads. Prostitution activities associated with the ring occurred in apartments or hotels located in Bellevue, Kent, Kirkland, Lynnwood, Olympia, Lacey, Puyallup, Renton, Tukwila, Seattle, and Federal Way. Other locations where the ring operated include eastern Washington cities such as Richland, Kennewick, Wenatchee and Spokane. The sex workers were frequently moved throughout the area.

           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.

           Conspiracy is punishable by up to five years in prison and a $250,000 fine.

           The case is being jointly investigated by the FBI, the Bellevue Police Department, the King County Sheriff’s Office, the Redmond Police Department, the Renton Police Department, the Seattle Police Department, the Tukwila Police Department, and Homeland Security Investigation (HSI). Today’s operation involved assistance from police departments in Everett, Federal Way, Kennewick, Kent, Kirkland, Lacey, Puyallup, Richland, Spokane, and Wenatchee and assistance from the Snohomish County and Spokane County Sheriff’s Offices.

           The case is being prosecuted by Assistant United States Attorneys Kate Crisham, Siddharth Velamoor and Vince Lombardi.

          A former Seattle resident was arrested in Wisconsin this morning in connection with an attack on Seattle Police at the May Day protest in 2016, announced U.S. Attorney Annette L. Hayes. WIL CASEY FLOYD, 32, will appear in U.S. District Court in Milwaukee, Wisconsin this afternoon. FLOYD was identified in a lengthy investigation as the member of the so-called ‘Black Bloc’ of protestors who threw unlit incendiary devices at police. FLOYD is charged by criminal complaint with unlawful possession of a destructive device -- a felony punishable by up to ten years in prison.

 

          “This case demonstrates our commitment to protecting our cherished First Amendment rights while holding those who abuse those rights to account,” said U.S. Attorney Annette L. Hayes. “I join city leaders in emphasizing that violence at May Day protests will not be tolerated, and commend Seattle Police and FBI’s dogged pursuit of this defendant who threw a Molotov cocktail at an SPD officer at last year’s May Day protests. His so-called “black bloc” disguise was useless in his effort to evade responsibility for his actions.”

 

          “The FBI and Seattle Police Department worked tirelessly to uncover the faces under the black masks who chose to turn a peaceful protest into a violent confrontation,” said Special Agent in Charge Jay S. Tabb, Jr. “Our priority is keeping the people of this city safe, and we hope this arrest and prosecution will deter those who think they can stay anonymous while causing injury and destruction on the streets of Seattle.”

 

          “The actions of the accused put peaceful demonstrators and police officers at extreme risk. In this case and similar cases, we will continue to work relentlessly with the FBI and the U.S. Attorney’s Office to bring suspects to justice. I commend the exceptional work of our SPD detectives and our federal partners,” said Seattle Police Chief Kathleen O’Toole.

 

          According to the criminal complaint in the case, on the evening of May 1, 2016, one of the Molotov cocktails thrown at police shattered at the feet of an officer and ignited his trousers when a flash-bang grenade went off. The officer suffered burns to his leg. Law enforcement gathered a variety of evidence at the scene on 4th Avenue South and South Seattle Boulevard, including other remains of bottles and a satchel with one unexploded incendiary device. The devices were all the same in construction: beer bottles with flammable liquid and a home-made stopper and cotton cloth. Law enforcement reviewed a variety of videos from the scene and ultimately identified FLOYD as a suspect. Law enforcement obtained a court authorized search warrant to collect evidence to determine whether FLOYD was linked to the satchel and the incendiary devices. Just last week law enforcement tracked FLOYD to a flight from San Diego, California to Wisconsin with a change of planes in Denver. Members of the Joint Terrorism Task Force intercepted FLOYD as he changed planes. FLOYD agreed to speak with investigators. FLOYD was arrested without incident this morning at his mother’s home in Elkhart Lake, Wisconsin.

 

          Unlawful possession of destructive devices is punishable by up to ten years in prison and a $250,000 fine. This is the maximum penalty allowed by law. The actual sentence imposed in any case will reflect the specific facts of the crime, including the impact on any victims and the defendant.

 

          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’s Joint Terrorism Task Force and the Seattle Police Department, both through its membership on the JTTF and with additional investigative groups. Today’s arrest was made with assistance from the FBI’s Milwaukee Field Office and the Elkhart Lake Police Department.

 

          The case is being prosecuted by Assistant United States Attorney Todd Greenberg in consultation with the King County Prosecuting Attorney’s Office.

          A former member of the military pleaded guilty today in U.S. District Court in Tacoma to two counts related to sexual molestation of a young child on different military bases in Washington and Louisiana, announced U.S. Attorney Annette L. Hayes. KENNETH PAUL DESCOTEAUX, 41, was arrested in April 2016, after the minor victim disclosed to authorities that DESCOTEAUX had been sexually molesting the victim since 2011. Under the terms of the plea agreement, both sides will recommend a sentence of 23 years in prison. U.S. District Judge Benjamin H. Settle scheduled sentencing for August 7, 2017.

          According to records filed in the case, the victim disclosed the abuse while residing in Wyoming. The Cheyenne Police Department worked closely with the FBI and law enforcement at Joint Base Lewis-McChord (JBLM) and the Fort Polk Military Installation to investigate the crimes that occurred when the victim and DESCOTEAUX resided on those military installations. DESCOTEAUX was indicted both in federal court in the Western District of Louisiana and in the Western District of Washington since both military bases are exclusive federal enclaves where criminal cases are prosecuted in federal court. The criminal conduct in Louisiana occurred between 2011 and 2014 when the victim was ages 7-10. The crimes on JBLM occurred between 2014 and 2015 when the victim was 11-years-old. In addition to the sexual abuse, the victim was also repeatedly struck in the head by DESCOTEAUX, at one point causing hearing loss. The minor victim’s mother was a deployed service member periodically serving overseas at the time of DESCOTEAUX’s crimes.

          Despite the 23-year-sentence recommendation, Judge Settle can impose any sentence up to the maximum penalty of life in prison. DESCOTEAUX will be required to register as a sex offender after he is released from prison and could face federal supervision for the rest of his life.

          The case was investigated by the Cheyenne Police Department, the FBI, and JBLM- Criminal Investigation Division (CID). The U.S. Attorney’s Office for the Western District of Louisiana provided substantial assistance.

          The case is being prosecuted by Assistant United States Attorney Grady J. Leupold, who serves as the Military Liaison for the U.S. Attorney’s Office.

          The Canadian organizer of a 2005 attempt to smuggle 41 kilos of cocaine into Canada pleaded guilty today in U.S. District Court in Seattle to conspiracy to distribute cocaine and ecstasy, announced U.S. Attorney Annette L. Hayes. KEVIN DONALD KERFOOT, 53, of Surrey, British Columbia, Canada was indicted in July 2006, nine months after his co-conspirators were arrested in the Bellingham area as they tried to move 41 kilos of cocaine up I-5 and onto a boat for transit to Canada. The person who was going to ferry the cocaine to Canada, brought more than seven kilos of the drug MDMA or ‘ecstasy’ into the U.S. for distribution via KERFOOT’s drug network. KERFOOT fought extradition from Canada for years, and was ultimately extradited to the Western District of Washington and arraigned on the indictment in December 2016. When sentenced by U.S. District Judge Thomas S. Zilly on July 27, 2017, KERFOOT faces a mandatory minimum ten years in prison.

 

          According to records filed in the case, a confidential source alerted agents that a large load of cocaine was traveling towards the border in October 2005. Acting on the information, a Washington State Trooper identified a suspicious vehicle driving erratically. After stopping the vehicle, a narcotics K-9 alerted to the presence of cocaine in the vehicle and officers discovered the 41 kilos of cocaine. Agents worked to arrest other members of the smuggling ring including the captain of a boat waiting at the Bellingham marina, and two other men who were waiting to pick up and distribute the ecstasy the boat had brought down from Canada. KERFOOT was identified as the person in charge of the smuggling operation.

   

          The other members of the smuggling ring were sentenced to prison terms ranging from six-and-a-half years to just over three years. All have since been released after serving their sentences.

 

          The case was investigated by the Drug Enforcement Administration (DEA) with assistance from the Washington State Patrol, U.S. Immigration and Customs Enforcement (ICE), U.S. Border Patrol, the U.S. Coast Guard and the Royal Canadian Mounted Police (RCMP).

 

          The case is being prosecuted by Assistant United States Attorney Vince Lombardi, with assistance from the Department of Justice Office of International Affairs (OIA).

          A computer support technician formerly employed at Expedia offices in San Francisco was sentenced today in U.S. District Court in Seattle to 15 months in prison for securities fraud, announced U.S. Attorney Annette L. Hayes. JONATHAN LY, 28, of San Francisco, pleaded guilty in December 2016, admitting he used his position in tech support at Expedia to access emails of Expedia executives so that he could trade in Expedia stock and illegally profit from non-public information. At sentencing U.S. District Judge John C. Coughenour imposed three years supervised release.

          “This was not a one-time lapse in judgement – this defendant used his technology skills to repeatedly invade the email accounts of Expedia executives so that he could enrich himself at the expense of others,” said U.S. Attorney Annette L. Hayes. “Even after he moved on to a better paying position at a different technology firm he continued his crimes, all while trying to make it look like other employees were at fault. I commend Expedia for quickly contacting law enforcement and working with investigators to stop the computer intrusions and identify those responsible.”

          According to records filed in the case, between 2013 and 2015, LY was employed by Bellevue based Expedia as a Senior IT Technician in the San Francisco office of subsidiary Hotwire.com. In order to provide IT support, LY had network privileges that allowed him to remotely access the electronic devices of Expedia executives. Using those privileges LY accessed documents and emails containing non- public information on the devices of both the Chief Financial Officer and the Head of Investor Relations. Using the non-public information, LY executed a series of well-timed trades in Expedia stock options.

          Even after he left the company in 2015, LY kept an Expedia laptop, and without the knowledge of the company, continued to access the electronic devices and email accounts of Expedia executives. LY used his know-how to make it appear as though other Expedia employees were actually the ones accessing the devices. Shortly after discovering the computer intrusions, Expedia reported the misconduct to the FBI and undertook its own forensic investigation. Because of the quick reporting, the FBI was able to trace the computer intrusion to LY. As part of his plea agreement LY will repay Expedia the $81,592 it spent investigating the computer intrusion.

          LY faces a separate Securities and Exchange Commission action requiring him to pay back the more than $331,000 in illegal profits he made in the scheme.

          The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Katheryn Kim Frierson.

          A resident of Ridgefield, Clark County, Washington, pleaded guilty today in U.S. District Court in Tacoma to violating the Lacey Act by trafficking in sperm whale ivory, announced U.S. Attorney Annette L. Hayes. TIM DAVIS, 55, admitted to participating in at least 74 transactions involving the purchase and sale of whale, elephant and walrus ivory between May 2006 and June 2015. The Endangered Species Act and the Marine Mammal Protection Act prohibit unlawful purchases and sales of these products. DAVIS will be sentenced by U.S. District Judge Robert J. Bryan on July 13, 2017.

 

          “By buying and selling ivory products, this defendant was providing a marketplace for those who are hunting animals such as elephants and whales to extinction,” said U.S. Attorney Annette L. Hayes. “I commend the U.S. Fish and Wildlife Service for working diligently to stamp out this kind of trafficking. The laws we have enforced in this case are essential to preserving the kind of healthy planet we all want to leave to future generations.”

 

          “We commend the Department of Justice and all other agencies that played a role in aiding this investigation and prosecution,” said Edward Grace, Deputy Assistant Director for the U.S. Fish and Wildlife Service’s Office of Law Enforcement. “The illegal wildlife trade is a $20 billion industry that is rapidly driving elephants and many other animals to extinction. The Service will continue to use every tool at its disposal to fight the trafficking scourge and the shameful individuals who are depriving our planet of these magnificent creatures for their own profit.”

 

          According to the plea agreement, DAVIS advertised on internet sites such as Etsy, EBay and Craigslist, offering to purchase and sell various ivory products. DAVIS sold ivory to buyers outside the U.S., particularly in Asia. To conceal his international transactions, DAVIS fraudulently labeled the ivory packages, stating that they contained “oxbone” products, when in fact, they contained ivory.

 

            Between 2012 and 2015, DAVIS participated in a series of ivory transactions with an undercover U.S. Fish and Wildlife Service agent. For example, DAVIS sold the agent a collection of sperm whale teeth for $2,000 in May 2015. In June 2015, DAVIS purchased four walrus tusks from the agent.

 

          Under the terms of the plea agreement, prosecutors will recommend a probationary sentence with as much as six months of home detention. DAVIS will also forfeit his unlawfully acquired ivory products.

 

          The case was investigated by the U.S. Fish and Wildlife Service. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

WASHINGTON – A 32-year-old Vladivostok, Russia, man was sentenced today to 27 years in prison for his computer hacking crimes that caused more than $169 million in damage to small businesses and financial institutions, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, and U.S. Attorney Annette L. Hayes of the Western District of Washington.

          Roman Valeryevich Seleznev, aka Track2, was convicted in August 2016, of 38 counts related to his scheme to hack into point-of-sale computers to steal credit card numbers and sell them on dark market websites. U.S. District Judge Richard A. Jones of the Western District of Washington imposed the sentence.

          “This investigation, conviction and sentence demonstrates that the United States will bring the full force of the American justice system upon cybercriminals like Seleznev who victimize U.S. citizens and companies from afar,” said Acting Assistant Attorney General Blanco. “And we will not tolerate the existence of safe havens for these crimes – we will identify cybercriminals from the dark corners of the Internet and bring them to justice.”

 

          “Today is a bad day for hackers around the world,” said U.S. Attorney Annette L. Hayes. “The notion that the Internet is a Wild West where anything goes is a thing of the past. As Mr. Seleznev has now learned, and others should take note -- we are working closely with our law enforcement partners around the world to find, apprehend, and bring to justice those who use the internet to steal and destroy our peace of mind. Whether the victims are multi-national banks or small pizza joints, we are all victims when our day-to-day transactions result in millions of dollars ending up in the wrong hands.”

 

          According to evidence presented at trial, between October 2009 and October 2013, Seleznev hacked into retail point-of-sale systems and installed malicious software (malware) that allowed him to steal millions of credit card numbers from more than 500 U.S. businesses and send the data to servers that he controlled in Russia, the Ukraine and McLean, Virginia. Seleznev then bundled the credit card information into groups called “bases” and sold the information on various criminal “carding” websites to buyers who used them for fraudulent purchases, according to evidence introduced during the trial of this case.

          Many of the businesses targeted by Seleznev were small businesses, and included restaurants and pizza parlors in Western Washington, including Broadway Grill in Seattle, which was forced into bankruptcy following the cyber assault. Testimony at trial revealed that Seleznev’s scheme caused approximately 3,700 financial institutions more than $169 million in losses.

          Seleznev was taken into custody in July 2014 in the Maldives, and the laptop in his custody at that time contained more than 1.7 million stolen credit card numbers, including some from businesses in Western Washington. The laptop also contained additional evidence linking Seleznev to the servers, email accounts and financial transactions involved in the scheme. Evidence presented at trial showed that Seleznev earned tens of millions of dollars from his criminal activity.

          Seleznev was convicted on August 25, 2016, of ten counts of wire fraud, eight counts of intentional damage to a protected computer, nine counts of obtaining information from a protected computer, nine counts of possession of fifteen or more unauthorized access devices and two counts of aggravated identity theft.

          “Mr. Seleznev’s criminal enterprise was both sophisticated and expansive, with transnational implications. This investigation exemplifies the ability of the U.S. Secret Service and our law enforcement partners to hold accountable those who perpetrate such crimes,” said U.S. Secret Service Special Agent in Charge Robert L. Kierstead. “The ultimate success of this case is the result of an extraordinary collaborative effort by the Secret Service, the U.S. Attorney’s Office of the Western District of Washington, the Criminal Division’s Computer Crime and Intellectual Property Section and the Seattle Police Department.”

 

          “Crime has no borders,” said Seattle Police Chief Kathleen O’Toole. “This individual is responsible for defrauding victims out of millions of dollars in Seattle alone, and we are proud to work with our federal partners to bring him to justice.”

          Seleznev is also charged in a separate indictment in the District of Nevada with participating in a racketeer influenced corrupt organization (RICO) and conspiracy to engage in a racketeer influenced corrupt organization, as well as two counts of possession of 15 or more counterfeit and unauthorized access devices. Additionally, Seleznev is charged in the Northern District of Georgia with conspiracy to commit bank fraud, one count of bank fraud and four counts of wire fraud. An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

          The U.S. Secret Service Electronic Crimes Task Force investigated the case. Assistant U.S. Attorneys Norman M. Barbosa and Seth Wilkinson of the Western District of Washington and Trial Attorneys Harold Chun and Ethan Arenson of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) prosecuted the case. The CCIPS Cyber Crime Lab, and its Director, Ovie Carroll, provided substantial support for the prosecution. The Office of International Affairs and the U.S. Attorney’s Office for the District of Guam also provided assistance in this case.

 

A 32-year-old Vladivostok, Russia, man was sentenced today to 27 years in prison for his computer hacking crimes that caused more than $169 million in damage to small businesses and financial institutions, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney Annette L. Hayes of the Western District of Washington. 

Roman Valeryevich Seleznev, aka Track2, was convicted in August 2016, of 38 counts related to his scheme to hack into point-of-sale computers to steal credit card numbers and sell them on dark market websites.  U.S. District Judge Richard A. Jones of the Western District of Washington imposed the sentence.

“This investigation, conviction and sentence demonstrates that the United States will bring the full force of the American justice system upon cybercriminals like Seleznev who victimize U.S. citizens and companies from afar,” said Acting Assistant Attorney General Blanco.  “And we will not tolerate the existence of safe havens for these crimes – we will identify cybercriminals from the dark corners of the Internet and bring them to justice.”

“Today is a bad day for hackers around the world,” said U.S. Attorney Annette L. Hayes. “The notion that the Internet is a Wild West where anything goes is a thing of the past.  As Mr. Seleznev has now learned, and others should take note – we are working closely with our law enforcement partners around the world to find, apprehend, and bring to justice those who use the internet to steal and destroy our peace of mind.  Whether the victims are multi-national banks or small pizza joints, we are all victims when our day-to-day transactions result in millions of dollars ending up in the wrong hands.” 

According to evidence presented at trial, between October 2009 and October 2013, Seleznev hacked into retail point-of-sale systems and installed malicious software (malware) that allowed him to steal millions of credit card numbers from more than 500 U.S. businesses and send the data to servers that he controlled in Russia, the Ukraine and McLean, Virginia.  Seleznev then bundled the credit card information into groups called “bases” and sold the information on various criminal “carding” websites to buyers who used them for fraudulent purchases, according to evidence introduced during the trial of this case. 
Many of the businesses targeted by Seleznev were small businesses, and included restaurants and pizza parlors in Western Washington, including Broadway Grill in Seattle, which was forced into bankruptcy following the cyber assault.  Testimony at trial revealed that Seleznev’s scheme caused approximately 3,700 financial institutions more than $169 million in losses.

Seleznev was taken into custody in July 2014 in the Maldives, and the laptop in his custody at that time contained more than 1.7 million stolen credit card numbers, including some from businesses in Western Washington.  The laptop also contained additional evidence linking Seleznev to the servers, email accounts and financial transactions involved in the scheme.  Evidence presented at trial showed that Seleznev earned tens of millions of dollars from his criminal activity.

Seleznev was convicted on Aug. 25, 2016, of 10 counts of wire fraud, eight counts of intentional damage to a protected computer, nine counts of obtaining information from a protected computer, nine counts of possession of 15 or more unauthorized access devices and two counts of aggravated identity theft.  

“Mr. Seleznev’s criminal enterprise was both sophisticated and expansive, with transnational implications.  This investigation exemplifies the ability of the U.S. Secret Service and our law enforcement partners to hold accountable those who perpetrate such crimes,” said Special Agent in Charge Robert L. Kierstead of the U.S. Secret Service.  “The ultimate success of this case is the result of an extraordinary collaborative effort by the Secret Service, the U.S. Attorney’s Office of the Western District of Washington, the Criminal Division’s Computer Crime and Intellectual Property Section and the Seattle Police Department.”

“Crime has no borders,” said Seattle Police Chief Kathleen O’Toole.  “This individual is responsible for defrauding victims out of millions of dollars in Seattle alone, and we are proud to work with our federal partners to bring him to justice.” 

Seleznev is also charged in a separate indictment in the District of Nevada with participating in a racketeer influenced corrupt organization (RICO) and conspiracy to engage in a racketeer influenced corrupt organization, as well as two counts of possession of 15 or more counterfeit and unauthorized access devices.  Additionally, Seleznev is charged in the Northern District of Georgia with conspiracy to commit bank fraud, one count of bank fraud and four counts of wire fraud.  An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The U.S. Secret Service Electronic Crimes Task Force investigated the case.  Assistant U.S. Attorneys Norman M. Barbosa and Seth Wilkinson of the Western District of Washington and Trial Attorneys Harold Chun and Ethan Arenson of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) prosecuted the case.  The CCIPS Cyber Crime Lab, and its Director, Ovie Carroll, provided substantial support for the prosecution.  The Office of International Affairs and the U.S. Attorney’s Office for the District of Guam also provided assistance in this case.

          A childcare worker was sentenced today in U.S. District Court in Seattle to 78 months in prison and 15 years of supervised release for possession of child pornography, announced U.S. Attorney Annette L. Hayes. KYLE J. TATE, 34, of Seattle was arrested in May 2016 and pleaded guilty in November 2016. At the sentencing hearing, U.S. District Judge Richard A. Jones noted that TATE had sought “nearness to children…. This is not a silent crime,” the Judge said, “because of the damage to victims and their families.”

          “This defendant made a point of working with children and lulling parents and employers into trusting him – and then betrayed that trust,” said U.S. Attorney Annette L. Hayes. “This conviction and sentence will provide protection for our communities. Not only will Mr. Tate spend time in prison, when he gets out he will be subject to federal monitoring for 15 years, and will be required to register as a sex offender.”

          According to records filed in the case, TATE came to the attention of law enforcement when another individual implicated him in the collection and sharing of child pornography. Due to TATE’s employment in childcare, investigators moved quickly to get a warrant to search his home and digital devices. Those devices contained more than 5600 images and 627 videos showing children, including infants, being sexually molested and abused. At the time of his arrest TATE worked at the Hutch Kids Childcare Center – and had been responsible for the infant care room for nearly five years. Previously he worked as a Sunday school teacher, as a teacher at KinderCare and as a care provider at the YMCA.

          The case was investigated by U.S. Immigration and Custom’s Enforcement’s Homeland Security Investigations (HSI) and the Seattle Police Department’s Internet Crimes Against Children Task Force (ICAC).

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

          The former owner of three bars and restaurants in the Seattle area was sentenced today in U.S. District Court in Seattle to eight months in prison, one year of supervised release and $800,000 in restitution for multiple misdemeanor counts of failing to file tax returns, announced U.S. Attorney Annette L. Hayes. ERIC M. GALANTI, 41, who now resides in Olympia, Washington failed to file his business and personal tax returns between 2006 and 2012. GALANTI owned several restaurants during that time including Alki Crab & Fish in West Seattle, the Admiral Pub in West Seattle, and Bourbon Jacks (aka Poppas Pub or Charlies Pub) in Kent. At the sentencing hearing U.S. District Judge Richard A. Jones said GALANTI “enjoyed the lifestyle of the ‘rich and famous,’… but every single year when April 15th rolled around a light had to come on that you owed taxes…. This was a flagrant and ongoing offense.”

          According to records filed in the case, the lengthy investigation by the Internal Revenue Service Criminal Investigation Division found that GALANTI’s businesses were generating significant revenues, but he failed to keep accurate records. Bank records show two of the restaurants had deposits of more than $7.7 million between 2006 and 2011. While he failed to file and pay his taxes, GALANTI enjoyed a lavish lifestyle: using forged tax documents to facilitate his purchase of a $400,000 yacht; taking expensive trips to Hawaii, Las Vegas and the Caribbean; and paying more than $10,000 for Kenney Chesney concert tickets.

          “As we approach tax day, Mr. Galanti’s sentence reminds us of our legal obligation to file complete and accurate tax returns with the IRS. Today, Mr. Galanti, who willfully failed to pay $800,000 in taxes, learned the consequences of neglecting his duty as an American and as a small business owner,” stated Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “Instead of paying taxes, Mr. Galanti rewarded himself with lavish vacations and a new yacht. His decision to ignore his civic responsibilities caught up with him today.”

 

          The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case was prosecuted by Assistant United States Attorney Norman Barbosa.

          An Everett, Washington man who worked for a Canadian company that sells point of sale computer software, was sentenced today in U.S. District Court in Seattle to 18 months in prison and three years of supervised release for his role in a scheme to sell ‘Tax Zapper’ software, announced U.S. Attorney Annette L. Hayes. JOHN YIN, 66, pleaded guilty in December 2016, to wire fraud and conspiracy to defraud the government admitting that he promoted and sold a revenue suppression software that allowed restaurants to underreport their sales and illegally lower their tax bills. The software – sometimes called a “Zapper” program - resulted in a loss amount of more than $3.4 million. At the sentencing hearing U.S. District Judge Richard A. Jones said YIN served as a facilitator for illegal operations. “This was illegal, this was criminal and you had to know you have to pay taxes… but you continued – motivated by greed.”

          “This defendant sold businesses a high tech tool that had only one purpose – to give businesses a leg up by cheating the taxman,” said U. S. Attorney Annette L. Hayes. “In addition, by not paying their fair share of taxes, they cheated state and federal programs, and victimized workers whose employment and social security taxes went unpaid as well. Partnering with the Washington State Attorney General’s Office, we will ensure that those who are responsible for this conduct will be held to account.”

          “Using illegal software to avoid tax obligations harms both taxpayers and businesses that compete fairly and play by the rules,” said Attorney General Bob Ferguson. “I’m proud to work with U.S. Attorney Hayes to stamp out this fraud.”

          According to records in the case, YIN was a salesman for Profitek, a British Columbia, Canada company selling point of sale (POS) systems for hospitality and retail industries. In addition to its Canadian headquarters, the Company has offices in China and a growing dealership network across North America. The Company designed, or had designed, and marketed, sold and supported revenue suppression software (RSS) as an add-on to its Profitek point of sale software. This RSS functioned only with the Profitek POS software.

          Point of Sale software creates a database of transactions that is used to calculate a business’s tax obligations. Revenue suppression software (RSS) is used to modify a business’s POS database for the purpose of tax evasion. When executed, the RSS program deletes all or some of the business’s cash transactions, and then reconciles the books of the business. The result is business records that appear to be complete and accurate but, in fact, are false and fraudulent in that they show less than total income earned.

          JOHN YIN successfully sold the POS software, and assisted in the widespread distribution of the Zapper software, to dozens of customers over the course of several years. Prosecutors told the court that “through the defendant, a hundred restaurants created a hundred sets of false books.”

          Between 2010 and 2013, eight different restaurants in the Seattle area used the software and underpaid their state and federal taxes by amounts ranging from a low of just over $145,000 to more than $910,000. When the restaurant owner who underpaid taxes by more than $900,000 was confronted about using the tax zapper software she admitted she used the unreported cash to pay some employees in cash. In addition, she did not withhold mandatory social security or Medicare taxes for these employees.

          “The Revenue Suppression or ‘Zapper’ software peddled by Mr. Yin was sold with the intent to help restaurants and businesses dodge federal, state and local taxes. Today, Mr. Yin is being held responsible for his role in trying to magically zap away millions of dollars from the IRS and other taxing authorities,” stated Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “There is no magic formula to commit tax evasion. No matter how high tech the tools, or complex the scheme, IRS – Criminal Investigation will continue to work with our law enforcement partners to prosecute tax cheats and promote parity in our tax system.”

 

          “Today's sentencing resulted from several years of investigation by state and federal agencies into Mr. Yin’s network, which sold tax evasion software to a long list of businesses in Washington and other states. But our work isn’t done, and we intend to keep working with the Attorney General and our federal partners to prosecute the use of sales suppression software,” said Vikki Smith, director of state Department of Revenue.

 

          YIN has agreed to pay $3,445,589 in restitution to the United States and Washington State. The restitution obligation is shared by the eight restaurants detailed in the federal case that cheated on their taxes.

 

          The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), and the Washington State Department of Revenue with special assistance from the Washington State Attorney General’s Office.

          The case was prosecuted by Assistant United States Attorney Susan Roe.

          A former resident of Eastsound, Orcas Island, Washington pleaded guilty today in U.S. District Court in Seattle to wire fraud in connection with her scheme to steal from her employers, announced U.S. Attorney Annette L. Hayes. SARAH ELIZABETH COFFELT, 42, who now resides in Seattle, worked for a retired couple and their business and non-profit entities as a bookkeeper from 2003 until she was terminated for theft in 2016. COFFELT admits in her plea agreement that she stole more than $755,000 from the couple’s accounts by transferring money from their accounts to her own, by forging checks and by using business credit cards for her family’s personal expenses. U.S. District Judge Thomas S. Zilly scheduled sentencing for July 13, 2017.

 

          According to the facts admitted in the plea agreement, in 2003 COFFELT was hired to handle bookkeeping duties for the couple and various entities they owned including Apogee Flight Incorporated, L.L.C. (Apogee) which owned aircraft and hangars, and the non-profit Heritage Flight Museum (HFM). COFFELT’S duties included handling the payroll for the house, Apogee and HFM employees as well as the bills for Apogee, HFM and other entities. Even as she worked as a bookkeeper, COFFELT and her husband owned Moon Glow Arts and Crafts, a store in Eastsound. COFFELT admits that she used money from her employers’ accounts to pay the expenses of the business, as well as other expenses such as trips for her family, her mortgage, her taxes and more than $30,000 in fuel charges.

 

          COFFELT was able to hide her embezzlement by having the couple’s bank and business credit card statements sent to her home so that she was the only person reviewing them. She used a company credit card that was supposed to be for moderate unusual fuel charges by a maintenance worker to charge more than $30,000 for her family’s expenses and allowed the maintenance worker to charge a similar amount.

 

          COFFELT has agreed to pay $755,378 in restitution. Wire fraud is punishable by up to 20 years in prison and a $250,000 fine. This is the maximum penalty allowed by law. The actual sentence imposed in any case will reflect the specific facts of the crime, including the impact on any victims and the defendant.

 

          The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Susan Roe.

          The owner of a Kirkland, Washington interior design business was indicted today in a nearly twenty-year scheme to avoid paying several hundred thousand dollars in income taxes, announced U.S. Attorney Annette L. Hayes. DANIEL NIX, 56, was indicted by the grand jury on thirteen counts of tax evasion, eleven counts of providing fictitious financial obligations, and one count of corrupt interference with the administration of the Internal Revenue Code. A second defendant, KAREN STREET, 58, also of Kirkland, was indicted on two counts of providing fictitious financial obligations. Arraignment on the indictments is scheduled for April 20, 2017.

 

          According to the indictments, NIX operates Dannix Design, an interior design firm for medical offices. As detailed in the indictment, as early as 1998 and from 2000 to 2007, NIX refused to pay his income taxes, which over that time totaled more than $340,000. NIX set up shell companies to hide his income and assets, filed false bankruptcy claims, and filed false claims against the government. For tax years 2010-2013, NIX continued to use a variety of strategies to hide his income and avoid any tax assessments. In February 2013, NIX sent eleven fake money orders to the IRS to make it appear he was paying his tax obligations. The total face value of the eleven fake money orders exceeded a million dollars. His long-time partner, KAREN STREET, also submitted two fake money orders as payment for back taxes she owed.

 

          Tax evasion is punishable by up to five years in prison and a $250,000 fine. Presentation of fictitious financial instruments is punishable by up to 25 years in prison and a $250,000 fine. Attempts to interfere with the administration of the tax code is punishable by up to three years in prison and a $5,000 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 Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Seungjae Lee.

SEATTLE – A comprehensive assessment of the Seattle Police Department’s (SPD) uses of force from July 2014, through October 2016, has found SPD in initial compliance with requirements of the Court-ordered agreement with the Department of Justice (DOJ). Federal Monitor Merrick Bobb filed the formal assessment with the U.S. District Court today and concluded that the finding of initial compliance with the use of force provisions of the consent decree “represents a singular and foundational milestone on SPD’s road to full and effective compliance – and represents Seattle crystallizing into a model of policing for the 21st century.”

 

          Monitor – working closely with DOJ and a team of other enforcement experts – reviewed data relating to SPD’s use of force for a two-and-a-half-year period and found that officers are effectively implementing SPD’s revised use of force policies. assessment concludes: “In the vast majority of instances, officer force appeared necessary, proportional, and objectively reasonable under the circumstances – with a number of incidents featuring superior examples of officers strategically de-escalating situations in order to minimize the nature of the threat while potentially mitigating the severity of force that needed to be used.” Notably, the Monitor found that these improvements in officers’ use of force did not result in more officer injuries or an increase in crime.

 

          “This positive assessment is a credit to the men and women of SPD, from line officers to command staff. They have embraced reform, made it their own, and fundamentally changed what is happening on the streets of Seattle,” said Annette L. Hayes, U.S. Attorney for the Western District of Washington. “The findings demonstrate that rigorous policies are in place, high-quality training and supervision have been implemented, proper reporting and investigation is happening, and appropriate levels of force are being used. Also important, police experts found that because SPD is collecting data on uses of force, SPD is able to critically analyze and address issues as they come up. SPD has reached a major milestone in its reform efforts. I commend city leaders for making reform meet city needs including officers and diverse communities alike.”

 

          The assessment examined three interrelated areas of officer activity, aggregated trends of when force is used, and an in-depth analysis of those incidents in which officers deployed force. The Monitor divided the data from the 28 months into two time periods to analyze trends and make comparisons. Among the important findings are:

 

•    SPD officers used less force, and less significant types of force:

  • Overall use of force rates are down – both over the past 28 months and compared to the DOJ investigation period of 2009-2011;

  • Less-lethal instruments are used infrequently – with baton use dramatically declining from the time period before and during DOJ’s investigation;

  • Low-level, type I force incidents spiked initially and continue to make up a large portion of all force used, but even that level of force has trended downward recently;

  • The typical SPD officer uses force very infrequently, and while a small group of officers use force more frequently than their peers, they do not use different, or more serious force, than SPD officers who used force less.

• Force has gone down without officer injuries going up.

• Force has gone down without crime going up, demonstrating that constitutional policing does not require sacrificing public safety.

 

          As determined by the Monitoring Team’s law enforcement and other experts, officer force is systemically consistent with the law and the heightened requirements of SPD policy. Specifically, the Monitor found that officers used force that was consistent with SPD policy, necessary under the circumstances, and proportional and reasonable more than 99 percent of the time. Officers also complied with the duty to de-escalate in 99 percent of cases where that duty was applicable. For intermediate-level Type II and serious Type III force from the more-recent 14-month period, which is analogous to the moderate and serious uses of force identified and analyzed in the 2011 DOJ investigation, nearly 96 percent of force incidents were consistent with SPD policy.

 

          The Monitoring Team found no cases in which an officer used force to address someone who was only verbally confrontational, nor did officers use inappropriate force on handcuffed and restrained individuals. Critically, in the small number of cases in which the force used was found to be unnecessary, disproportional, or unreasonable – or there was a failure to de-escalate consistent with SPD policies – the Monitor found that most of the time entities and structures within SPD identified the problem. As a result, the Monitor concluded that “when an officer performs in manner contrary to SPD’s use of force policy, the Department is able to catch and correct the error.”

 

          In contrast, in 2011, DOJ found that SPD officers used force “in an unconstitutional manner” at an unacceptable rate; “too quickly resort[ed] to the use of impact weapons” such as batons; too frequently “escalate[d] situations and use[d] unnecessary or excessive force when arresting individuals for minor offenses,” especially individuals experiencing a behavioral crisis, rather than de-escalating situations; and too frequently used excessive force against individuals who “talk-back” but otherwise pose no physical danger, such as individuals who are already restrained by handcuffs. DOJ concluded that systemic and structural deficiencies, including inadequate policies and training, especially relating to force weapons and de-escalation techniques, were the root causes of the problems identified in its investigation. The Monitor concludes in his assessment that “many of the issues identified in the DOJ’s investigation with respect to the application of force have been eliminated or, otherwise, substantially eliminated” through SPD’s efforts.

 

          The Monitor did find racial disparities in the population against whom force was used, but found no statistically significant disparities with respect to the type or severity of force used. Under the Consent Decree, the City has committed itself to identifying and working to address unwarranted disparate impact, and those efforts will be the subject of a forthcoming assessment.

 

          Previous assessments found SPD to be in initial compliance with requirements relating to crisis intervention, the Office of Professional Accountability, use of force reporting and investigation (including a recent follow-up assessment of Type II investigations), the Force Review Board, supervision, and the Early Intervention System. The Monitor also examined public confidence and community trust regarding SPD.

 

          A former Washington State Correctional Officer from the Monroe Correctional Complex was sentenced today in U.S. District Court in Seattle to 18 months in prison for his scheme to smuggle contraband into the prison, announced U.S. Attorney Annette L. Hayes. MICHAEL W. BOWDEN, 31, of Everett, Washington pleaded guilty January 9, 2017, to extortion under color of official right. At the sentencing hearing today U.S. District Judge Richard A. Jones told BOWDEN, “you were in a position of trust and power and it was abused. You compromised the safety of everyone in the facility.”

 

          “We rely on correctional officers to do their difficult jobs with the utmost in integrity,” said U. S. Attorney Annette L. Hayes. “When this defendant allowed contraband into the Twin Rivers Unit of the Monroe correctional facility, he breached the public’s trust in ways that harmed Twin Rivers staff and prisoners alike. The fact is that in 2016, the Twin Rivers Unit where this defendant worked saw a 600% increase in inmates testing positive for drugs. We simply can’t have prison staff be a part of that problem, and are committed to holding those who are to account.”

 

          According to records in the case, the Department of Corrections Intelligence and Investigations Unit asked the FBI to become involved in the investigation of contraband smuggling in December 2015. Using confidential sources inside and outside the Monroe Correctional Complex, agents determined BOWDEN was accepting bribes of up to $1,000 to smuggle contraband into the prison. On three different occasions between July and September 2016, BOWDEN smuggled tobacco, a SIM card, and what he believed was methamphetamine into an inmate at the prison. In each of those three instances, the inmate turned the contraband over to investigators.

 

          “The Washington Department of Corrections appreciates the efforts and expediency of the U.S. Attorney’s office in prosecuting former Officer Bowden,” said Assistant Secretary Stephen Sinclair of the Washington Department of Corrections. “Our correctional system prides itself on the safety and security of our officers, staff, and incarcerated population. We have no tolerance for misdeeds committed by the few, and appreciate the hard, dutiful work of the thousands of uniformed and non-uniformed staff in our facilities.”

 

          In a letter to the court, the head of the Monroe Correctional Complex described how contraband puts people at risk. He noted that shortly before BOWDEN smuggled sham methamphetamine into the prison, an inmate had died of a meth overdose at the facility, when he tried to hide his stash of the drug. That incident was well known to BOWDEN even as he made arrangements to smuggle more meth into the facility. “Any contraband inside a prison is a serious issue, however, the specific presence of methamphetamine inside the prison endangers inmates and staff to additional risk as trades are made and debts are accrued, which often leads to increased violence,” Michael Obenland, Superintendent of the Monroe Correctional Complex wrote to the court.

 

          The case was investigated by the FBI in partnership with the Washington State Department of Corrections Intelligence and Investigations Unit.

 

          The case is being prosecuted by Assistant United States Attorney Justin Arnold.