Western District of Washington

            A 62-year-old Redmond, Washington man who trained high profile basketball players and at one time worked for the Seattle Supersonics was sentenced today in U.S. District Court in Seattle to 50 months in prison for fraud, announced U.S. Attorney Annette L. Hayes.  STEPHEN BRUCE GORDON pleaded guilty in April 2015, admitting he defrauded approximately thirty victims of more than $4 million through a variety of interrelated schemes, each of which was based on lies.  At the sentencing hearing U.S. District Judge Ricardo S. Martinez acknowledged Gordon’s contributions to the basketball community but said, “he used the game and his connections to people in it to take money from his victims…in his wake, he left financial ruin.”

            “This defendant spun a web of lies, going so far as to have an associate impersonate government officials and a wealthy businessman to lull his victims,” said U.S. Attorney Annette L. Hayes.  “Mr. Gordon traded on a well of goodwill in the community, but he poisoned that well with his lies and now has to live with the consequences of his actions.”

            According to the plea agreement and other records filed in the case, between 2007 and 2013, GORDON solicited investments for a variety of schemes ranging from bringing an NBA franchise to Seattle, to supporting an Australian basketball league, to investing in Section 8 housing in the Southeast United States.  GORDON employed a variety of lies to make his schemes seem legitimate and traded on his relationship with a prominent tech billionaire, and other respected professionals to make it appear he had significant backing for his proposed businesses.  When investors started to get nervous about the money they had placed with GORDON, he paid an associate $29,000 to make telephone calls to various investors pretending to be a wealthy technology company executive, former Treasury Secretary Timothy Geithner and even former Attorney General Eric Holder.  The calls were designed to “put off” or “lull” investors whose investments had been used to repay prior investors as part of the defendant’s Ponzi scheme.

            In their sentencing memo prosecutors noted that GORDON’s “schemes all preyed on the relationships and trust that Gordon had meticulously established with his victims.  The defendant may not have set out to create a scheme to get rich.  He simply started telling small lies when early investments failed.  At any point, he could have stopped the fraud.  He never did.  Small lies became big lies, and tens of thousands of dollars in losses became millions.”

            Judge Martinez ordered GORDON into custody to immediately begin serving his sentence.  GORDON is responsible for $4,009,143 in restitution to his victims.

            The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Matthew Diggs.

The former Police Chief of the Swinomish Tribe pleaded guilty today in U.S. District Court in Seattle to theft of tribal funds, announced United States Attorney Annette L. Hayes.  THOMAS J. SCHLICKER, 57, of Stanwood, Washington, served as the Swinomish Police Chief from 1997 until September 2014, when his employment was terminated.  SCHLICKER admits he stole more than $30,000 that belonged to the tribe.  Sentencing before U.S. District Judge John C. Coughenour is scheduled for November 10, 2015

According to the plea agreement, between 2008 and 2014 SCHLICKER set up a secret bank account in the name of the Swinomish Police Department, without the knowledge of the tribal accounting department.  SCHLICKER then deposited checks made out to the tribal police into the secret account and withdrew the proceeds in cash, which he then used for his own purposes.  SCHLICKER also used the Tribe’s Chevron/Texaco credit card to purchase gas for his and his family members’ personal vehicles.  The total loss to the Swinomish Tribe is $33,622.

Theft of tribal funds is punishable by up to five years in prison and a $250,000 fine.

The case was investigated by the FBI and the Washington State Patrol.  The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson and Ye-Ting Woo.

A 40-year-old Olympia, Washington man was sentenced today in U.S. District Court in Seattle, for drug distribution and illegal gun possession announced United States Attorney Annette L. Hayes.  STEVEN ASIR THOMAS was convicted of Conspiracy to Distribute Controlled Substances, Money Laundering, Conspiracy to Possess Firearms in Furtherance of a Drug Trafficking Crime and being a Felon in Possession of a Firearm following a six day jury trial in April 2015.  At sentencing U.S. District Judge John C. Coughenour said the sentence was driven by the amount of drugs involved and THOMAS’ intent to have an attorney assaulted because of a business dispute involving his nightclub.

“This defendant was brazen in his criminal conduct, bragging about his plans to distribute methamphetamine and cocaine, and launder money through a Seattle nightclub,” said U.S. Attorney Annette L. Hayes.  “While he plotted assaults and ways to trade guns for drugs, he didn’t know law enforcement was listening to every word.  Now instead of enriching himself at the expense of public safety, he will pay his debt to society by serving time in prison.”

According to records in the case and testimony at trial, THOMAS had owned various nightclubs in the Seattle area, and sought to open a new nightclub near the Seattle Center called “Ice Nightclub”.  THOMAS discussed his plans with a person working with law enforcement as well as with an undercover agent.  THOMAS claimed the club would be a cover to launder drug money, and would generate cash for additional drug purchases.  In October 2013, THOMAS worked to set up a drug deal trading methamphetamine for assault rifles.  On three other occasions, law enforcement seized drugs that were either delivered or ordered by THOMAS.  In October 2013, THOMAS picked up a pound of methamphetamine from a source and then “sold” it to an undercover agent in Portland, Oregon.  About a week later, another two pound load of methamphetamine was seized on a bus headed to Portland – the courier was bringing it to THOMAS.  Finally, in March 2014, THOMAS arranged another one pound sale in Portland of highly pure methamphetamine to an undercover agent.

THOMAS used bank accounts set up in the name of Ice Nightclub to launder money he believed to be the proceeds of drug dealing.  Some of the money was provided to THOMAS by undercover agents acting as drug dealers in order to ferret out the nature and extent of THOMAS’ wrongdoing.  The plan that THOMAS came up with was for drug dealers to give him cash disguised as an investment in the club.  Then THOMAS would write a check from Ice Nightclub accounts to an entity connected to the drug dealers to make it appear that the Ice Nightclub was paying for services rendered.  THOMAS collected a fee from the “drug dealers” for his assistance in disguising the criminal source of the funds.

Finally, on March 27, 2014, law enforcement executed a search warrant at THOMAS’s residence.  They found a loaded Glock 9 mm Model 19 firearm next to his bed.  Also in the residence was evidence of drug dealing including cocaine, 14 cell phones, scales, currency bands and evidence of a previous marijuana grow.  THOMAS is prohibited from possessing guns due to a felony drug conviction in 2006 in Arkansas.

“Individuals who create businesses that launder profits for drug trafficking organizations should understand that they will actually be the ones paying the price when they forfeit their freedom and the proceeds of their criminal acts,” said Brad Bench, Special Agent in Charge of ICE HSI in Seattle.  “The sentencing of this defendant sends a clear message that law enforcement will not tolerate the actions of those who use the cover of legitimate business to conceal cash obtained from drug trafficking and associated acts of violence in order to bring dangerous narcotics into our communities.”

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 U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Seattle Police Department.

The case was prosecuted by Assistant United States Attorneys Jerrod Patterson, Nicholas Manheim, and Lisca Borichewski.

U.S. District Judge James L. Robart today approved updates to the Seattle Police Department’s policies that address when officers may and may not use force and the reporting, investigation and review of uses of force.  De-escalation provisions were already a critical part of the overall use of force policy, and the revisions now call those provisions out as a separate section to clarify that officers can be held accountable when they do not attempt to de-escalate tense situations, as their training instructs.  The surgical revisions, submitted to the Court by Monitor Merrick Bobb with the support of SPD and the Department of Justice (DOJ), are the product of constructive feedback from officers and community members, including the Community Police Commission (CPC), as part of the annual review of new policies implemented after the DOJ civil rights investigation.  As the Monitor indicated in submitting the revised policies to the Court last month, “the relatively limited changes to the policies are all evidence-based – informed by real-world experience, actual SPD trends, and objective data, not hypotheticals or unsubstantiated claims.”

“From the beginning, we have emphasized that reform wasn’t just about checking boxes and moving on.  To take root, our collective reform efforts require constant feedback, critical review, and thoughtful revision,” said U.S. Attorney Annette L. Hayes.  “Valuable insights from officers of all ranks and members of the community have made already excellent policies even stronger.  By incorporating ongoing guidance about what’s working on the ground and in the review of force incidents, we enhance officer safety and protect constitutional rights.  These revisions – and the built-in, self-correcting process to evaluate the core policies guiding reform at SPD – continue to build trust between the police department and the community.”

“Today’s announcement is an important step forward in our Seattle Police Department’s ongoing efforts to improve the quality of policing and restore public trust,” said Seattle Mayor Ed Murray.  “As our nation grapples with the challenge of improving police accountability and transparency, the department’s reforms, such as our revised Use of Force policy, are helping us become a national model for urban policing.”

“Working collaboratively with the Monitoring Team and the Department of Justice, the Seattle Police Department is moving full speed ahead with reform,” said Seattle Police Chief Kathleen O’Toole.  “Collectively, we have developed and refined policies, procedures and training, that are at the leading edge of policing.”

Among the changes are:

 

• Creating a stand-alone de-escalation policy (Section 8.100) to clarify that officers may be held accountable for failing to attempt to de-escalate where appropriate during an incident in the sequence of events leading to force being used.

 

• Tightening the core use of force policy (Section 8.200) to create an even clearer and shorter policy governing the application of force.

 

• Clarifying when the use of less-lethal tools may be prohibited (Section 8.300), including consideration of the physical condition of the subject and environmental or other situational circumstances.

 

• Revising the force review and investigation policies and process (Section 8.400) to reflect process-related lessons learned to ensure timely, objective investigation of force incidents.

 

• Clarifying that the Force Review Board has a duty to make determinations related to policy, tactics, or training issues as they arise and to refer matters to the Office of Professional Accountability as needed.

The Court initially approved SPD’s new use of force policy in December 2013, and it became effective on January 1, 2014.  All officers began receiving training shortly thereafter, including electronic learning, an eight-hour in-class training, and a comprehensive, scenario-based, 24-hour training through 2014.  Officers have been and will continue to receive additional force training throughout 2015.  The training plan for 2015 may be found here: http://www.seattlemonitor.com/s/Third-Year-Monitoring-Plan.pdf.

Under the terms of the settlement agreement between the DOJ and the City of Seattle, the parties are required to engage in an annual review of all required policies, procedures and training curricula “180 days after it is implemented, and annually thereafter.”  The changes accepted by the Court today are the result of the first comprehensive appraisal of the force-related policies.  As the Monitor wrote when filing the updated policies, the revisions originate from:

• the analysis of hard data on use of force and its review;
• officer listening sessions and focus groups conducted by SPD Patrol;
• officer comments provided to SPD’s Audit, Policy & Research division;
• lessons learned by the Force Review Board and Force Investigations Team;
• separate officer and community input sessions by the CPC; and
• the ongoing observations of the Parties.

Background information about the originally-approved use of force policy is available here: http://www.justice.gov/usao-wdwa/pr/doj-hails-milestone-seattle-police-department-reform-efforts-court-s-approval-new-use .

 

Two men who invited a third man to use their Bellevue, Washington apartment for the illegal manufacturing of hash oil were sentenced to prison today in U.S. District Court in Seattle, announced U.S. Attorney Annette L. Hayes.  JESSE D. KAPLAN, 32, of Redmond, Washington and Daniel James STRYCHARSKE, 29, of Kirkland, Washington were each sentenced to three years in prison and three years of supervised release.  Last month the lead defendant in the case, David Richard Schultz, II, 33, was sentenced to nine years in prison.  Schultz was using highly explosive butane gas to make hash oil in the Hampton Greens Apartment complex on November 5, 2013 while the other two apartment residents were sleeping.  The gas exploded and numerous people in the apartment complex were injured fleeing the fire.  One of them, a former Mayor of Bellevue, died following treatment for injuries sustained while trying to escape the building.

“As I emphasized when the lead defendant was sentenced, this case tragically demonstrates why BHO extraction operations are so dangerous,” said U.S. Attorney Annette L. Hayes.  “Just like the meth labs we have worked so hard to eradicate, hash oil labs involve dangerous solvents and pose a serious risk of death and property damage.”

At the sentencing hearings U.S. District Judge James L. Robart said, “What moves the court is the loss of life, the permanently disabling and significant injuries the people received all because they lived in an apartment building with these defendants….who undertook this incredibly reckless and dangerous activity.”

According to records filed in the case, KAPLAN and STRYCHARSKE rented the apartment and allowed Schultz to set up the BHO manufacturing equipment in their space.  The men planned to sell the BHO for profit.  All three men suffered injuries in the explosion.  Former Bellevue Mayor Nan Campbell was hospitalized for a broken pelvis she suffered trying to escape the flames.  She later died following complications from her hospitalization.  Two other apartment residents suffered shattered bones as they had to jump from their upper level apartments.  In all the fire caused more than $2 million in property damage.  The total amount of restitution owed by these defendants will be finalized by a hearing scheduled for September 21, 2015.

Judge Robart determined an upward departure from the sentencing guidelines was warranted for the defendants in the case because of the severe damage to the community.  “I am troubled that the conduct was motivated by greed – the money that could be made by manufacturing hash oil,” Judge Robart said.  He added that prison sentences may deter others from getting involved in butane hash oil manufacturing.

This case was investigated by multiple local and federal agencies, including: the Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the U.S. Marshals Service, and the Bellevue Police and Fire Departments.

The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Vince Lombardi.

            Tri-State Construction, a privately-owned Washington State construction company, today agreed to pay more than $140,000 to settle allegations it submitted false records to the Washington State Department of Transportation related to the federally-funded I-5 HOV lane project between Port of Tacoma Road and the Pierce/King County line, announced U.S. Attorney Annette L. Hayes.  The settlement involves Tri-State’s claims from 2010 to 2014 that it was renting a specialized machine from a certified Disadvantaged Business Enterprise (DBE).  In fact, the machine was not owned by DBE – OMA Construction.  The machine was actually owned by Tri-State, which attempted to use a lease/purchase agreement to make it appear, consistent with DBE set-aside requirements for federally-funded highway projects, that OMA owned the machine.

            “Disadvantaged Business Enterprise fraud harms the integrity of the DBE program and law-abiding contractors by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said William Swallow, Regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General.  “Our agents will continue to work with the Secretary of Transportation and other Federal, State, and local law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-assisted highway programs.”

            In all Tri-State will pay $142,440 to the U.S. Department of Transportation to settle the allegations.  The company does not admit any misconduct.  The machine at issue is a “chitosan” – used to process and clean wastewater generated by construction projects.  The adequacy of Tri-State’s work on the I-5 project is not disputed.

            The case was investigated by the U.S. Department of Transportation Office of Inspector General and the FBI.  The case was handled by Assistant United States Attorneys Kayla Stahman and Priscilla Chan.

          A Hood Canal waterfront property owner pleaded guilty today in U.S. District Court in Tacoma to the federal felony offense of making a false statement to a federal official in connection with his unlawful construction of a beachfront bulkhead, announced U.S. Attorney Annette L. Hayes.  JON KOLOSKI, 74, of Potlach in Mason County, constructed the bulkhead in September 2011, without the appropriate permit from the U.S. Army Corps of Engineers.  KOLOSKI had been told by both Mason County officials and the Corps that he needed the federal permit to construct the bulkhead.  After he failed to complete the permit process, and after the new bulkhead had been installed, KOLOSKI falsely told the U.S. Army Corps of Engineers via email that he no longer needed the permit as he was not going to replace the previously existing bulkhead.  A subsequent inspection by the Corps of Engineers revealed the bulkhead had already been constructed and was in violation of federal and state rules.  KOLOSKI is scheduled to be sentenced by U.S. District Judge Benjamin H. Settle on October 5, 2015.

          “Not only did this defendant knowingly proceed without a permit, he lied to federal officials in an effort to hide his wrongdoing,” said U.S. Attorney Annette L. Hayes.  “These lies made it harder to protect the environment that we so cherish here in the Pacific Northwest and violated the public trust.”

            According to the plea agreement, KOLOSKI admits that in the late 1990s he started exploring the replacement of the existing bulkhead at his beachfront property.  He was told by Mason County authorities that any new bulkhead had to remain on the footprint of the existing bulkhead, and could not extend further than 6 feet past the ordinary high water mark.  KOLOSKI was also informed that any work that extended beyond the ordinary high water mark had to be approved and permitted by the U.S. Army Corps of Engineers.  In early 2010, Mason County issued permits for a new bulkhead 6 feet past the ordinary high water mark.  In June 2010, an official with the U.S. Army Corps of Engineers informed KOLOSKI that he needed to apply for a permit.  In paperwork submitted to the Corps, KOLOSKI said the bulkhead would be ten feet past the ordinary high water mark.  The Corps asked for more information on the project, but KOLOSKI did not respond and in September 2010 the permit process was cancelled.

            In October 2010, KOLOSKI revived the process by submitting some of the required information and he was informed of the time frame for permit approval.  Still without a permit, in mid-2011 KOLOSKI went forward and hired a contractor.  In September 2011 KOLOSKI had the bulkhead installed ten feet past the ordinary high water mark.  The Corps of Engineers was unaware of the construction and sent KOLOSKI information on specific requirements for a permit in early 2012.  KOLOSKI responded in April 2012 that due to financial considerations he no longer planned to build the new bulkhead and asked that his application for a permit be withdrawn.  KOLOSKI sent the email some six months after having the new bulkhead constructed.  In May 2012, a Corps of Engineers inspector visited the KOLOSKI property and discovered the new bulkhead had been constructed without a permit and in violation of rules regarding the distance seaward from the ordinary high water mark.

          “The defendant made false statements designed to mislead government authorities,” said Lance Ehrig, Acting Special Agent in Charge of EPA’s criminal enforcement program in the State of Washington.  “As a principal founder of an environmental engineering firm and as a geologist, Mr. Koloski was well aware of the permit requirements for shorelines in and around the Puget Sound region.  Our government functions properly only when individuals and corporate entities submit honest and truthful information while requesting government oversight of projects that could affect the environment.  Today’s guilty plea demonstrates that violators who deliberately waste government resources – and taxpayers’ money – will be prosecuted.”

          In addition to the criminal charge, KOLOSKI also settled civil violations of the federal Clean Water Act.

         “Mr. Koloski’s unpermitted work resulted in the loss of endangered salmon habitat,” said David Allnutt, Director of the Office of Ecosystems, Tribal and Public Affairs in the EPA Seattle office. “We work closely with our local and state partners and spend millions of dollars on Puget Sound protection and recovery. It is imperative that developers who work on sensitive shoreline habitats have permits that allow for development to proceed in a way that protects the environment.”

           KOLOSKI has agreed to pay $60,000 in civil penalties and $60,500 to the Hood Canal Coordinating Council for mitigation of salmon habitat to offset environmental impacts associated with construction of the bulkhead.  In addition, the civil settlement requires habitat restoration at the site of the bulkhead to remedy habitat loss.

          The EPA worked with a team of agencies which included Mason County, Washington Department of Ecology, Washington Department of Fish and Wildlife, the U.S. Army Corps of Engineers, and National Oceanic and Atmospheric Administration to resolve this case.

          The case is being prosecuted by Assistant United States Attorney James Oesterle.

            A Mill Creek, Washington man was arrested today on a criminal complaint charging him with importing drug paraphernalia and trafficking in counterfeit goods following a multi-year investigation by Homeland Security Investigations, announced U.S. Attorney Annette L. Hayes.  JAE SEON YOON, (AKA: Jason YOON), 55, is the president or vice-president of multiple companies doing business in Washington State: J&J, Inc. (d/b/a “Top Wholesale, Inc.”), Smomax, Inc. (d/b/a “346 Glass Pipe/Master Trading”) and Three People Corp. (d/b/a/ “Cigar USA”).  The criminal complaint alleges YOON imported and distributed drug paraphernalia and other goods with counterfeit markings that made them appear to be from established suppliers.  YOON allegedly used stickers with Seahawks and other NFL team logos to increase the price of the drug paraphernalia he sold.  YOON was arrested this morning as part of a search of three properties where law enforcement believes the counterfeit goods were being stored.  YOON will appear in U.S. District Court in Tacoma at 2:30 Wednesday July 8, 2015.

            According to the criminal complaint, YOON imported drug paraphernalia from China, sometimes via Canada, by marking them as vases, laboratory glassware, or oil and vinegar dispensers.  Multiple shipments were seized by law enforcement.  While the items were made in China, they were falsely marked with the logos of companies who manufacture similar goods in Germany and Canada.  YOON also imported e-cigarettes and chargers which bore counterfeit Underwriters Lab (U/L) markings.  U/L is an American worldwide safety consulting and certification company that provides safety standards for electrical devices and components.  YOON’s companies then sold the counterfeit items to small “mom and pop” type retail stores.

            The criminal complaint describes how YOON also imported counterfeit Seahawks logo stickers to stick on items to increase their value, and how he trafficked in “Hello Kitty” logo items despite being served with a cease and desist letter by the registered trademark owner.

            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 U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from U.S. Customs and Border Protection (CBP), the Washington State Liquor and Cannabis Control Board, and the Food and Drug Administration (FDA) Office of Criminal Investigations.  The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.

The Department of Justice announced today that it has reached a settlement with Bud Clary Chevrolet of Longview, Washington, to resolve a lawsuit it filed on behalf of Darrel Forney, a U.S. Navy Airman from Kelso, Washington.  The lawsuit alleged that the company violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) when it terminated Forney in January 2014, after learning of his intention to join the armed services.  If approved by the court, the settlement will resolve the allegations that the defendant violated the employment rights of Forney. 

Bud Clary Chevrolet is a multiple-location car dealership and service center based out of Longview.  According to the department’s complaint, filed in the U.S. District Court for the Western District of Washington in Seattle, the dealership violated USERRA by terminating Forney from his position as a lube technician in its service department after learning that he intended to join the armed services.  Forney initially intended to join the Navy Reserves, but after being terminated and unable to find other employment, he enlisted as an active duty Naval Airman.  Forney is currently stationed in Pensacola, Florida.  His family continues to reside in Kelso.

“The brave men and women who volunteer for our Armed Forces should never have to fear losing their job for signing up to protect our country,” said Acting Associate Attorney General Stuart F. Delery.  “This settlement demonstrates the Department of Justice’s commitment to protecting service members from unlawful employment discrimination and we will continue to devote time and resources to these efforts.”

“No service member should have to make a choice between keeping his civilian job and serving his country,” said Vanita Gupta, Head of the Civil Rights Division.  “The Civil Rights Division is committed to preserving the rights and privileges of those who, through their bravery and dedication, secure the rights and liberties of all Americans.” 

“While our dedicated men and women of the military protect our freedoms overseas, we must protect their interests here at home,” said U.S. Attorney Annette L. Hayes of the Western District of Washington.  “The men and women who serve in our military cannot be penalized for that decision.  This case is another example of the United States Attorney’s Office’s commitment to enforcing the laws that protect the employment rights of those who serve our country.”

Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court in Seattle, the defendants must pay Forney $15,500 to compensate him for lost wages.  Among other things, the settlement also requires the defendants to provide training to Bud Clary Chevrolet’s management and human resources staff on the USERRA rights and obligations of employers and covered employees, including USERRA’s prohibition on terminating employees based upon their application to the military. 

The case was litigated by Assistant U.S. Attorney Christina Fogg of the Western District of Washington, in collaboration with Andrew Braniff, Special Counsel and USERRA/U.S. Attorney’s Office Program Coordinator, in the Civil Rights Division’s Employment Litigation Section. 

The Civil Rights Division has 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 website at www.justice.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.  The Justice Department also has a special website dedicated to protection of service members’ rights which can be found at www.justice.gov/opa/blog/acting-associate-attorney-general-stuart-f-delery-announces-servicemembers-and-veterans.

WASHINGTON - The Department of Justice announced today that it has reached a settlement with Bud Clary Chevrolet of Longview, Washington to resolve a lawsuit it filed on behalf of Darrel Forney, a U.S. Navy Airman from Kelso, Washington.  The lawsuit alleged that the company violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) when it terminated Forney in January 2014, after learning of his intention to join the armed services.  If approved by the court, the settlement will resolve the allegations that the car dealership violated the employment rights of Forney.

“While our dedicated men and women of the military protect our freedoms overseas, we must protect their interests here at home,” said U.S. Attorney Annette L. Hayes.  “The men and women who serve in our military cannot be penalized for that decision.  This case is another example of the United States Attorney’s Office’s commitment to enforcing the laws that protect the employment rights of those who serve our country.”

Bud Clary Chevrolet is a multiple-location car dealership and service center based out of Longview, Washington.  According to the department’s complaint, filed in the U.S. District Court for the Western District of Washington in Seattle, the dealership violated USERRA by terminating Forney from his position as a lube technician in its service department after learning that he intended to join the armed services.  Forney initially intended to join the Navy Reserves, but after being terminated and unable to find other employment, he enlisted as an active duty Naval Airman.  Forney is currently stationed in Pensacola, Florida.  His family continues to reside in Kelso, Washington.

Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court in Seattle, the defendants must pay Forney $15,500 to compensate him for lost wages.  Among other things, the settlement also requires the defendants to provide training to Bud Clary Chevrolet’s management and human resources staff on the USERRA rights and obligations of employers and covered employees, including USERRA’s prohibition on terminating employees based upon their application to the military.

“The brave men and women who volunteer for our Armed Forces should never have to fear losing their job for signing up to protect our country,” said Acting Associate Attorney General Stuart F. Delery.  “This settlement demonstrates the Department of Justice’s commitment to protecting service members from unlawful employment discrimination and we will continue to devote time and resources to these efforts.”

“No service member should have to make a choice between keeping his civilian job and serving his country”, said Vanita Gupta, Head of the Civil Rights Division.  “The Civil Rights Division is committed to preserving the rights and privileges of those who, through their bravery and dedication, secure the rights and liberties of all Americans.”

The case was litigated by Assistant U.S. Attorney Christina Fogg in the U.S. Attorney’s Office for the Western District of Washington, in collaboration with Andrew Braniff, Special Counsel and 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 has 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.  The Justice Department also has a special website dedicated to protection of service members’ rights.  You can find the information here: www.justice.gov/opa/blog/acting-associate-attorney-general-stuart-f-delery-announces-servicemembers-and-veterans

            A 35-year-old Kirkland, Washington man was sentenced Monday, June 29, 2015 in U.S. District Court in Seattle to 15 years in prison for receipt and possession of child pornography, announced U.S. Attorney Annette L. Hayes.  ANDREW MICHAEL HARTUNG was contacted by law enforcement after a parent in Colorado reported that someone his son had met through online games asked the teen for sexually explicit pictures.  While playing the online games “League of Legends” and “Minecraft,” HARTUNG represented himself as a teen-ager.  Further investigation revealed HARTUNG had convinced other young teens to send him sexually explicit photos.  In 2002, HARTUNG was convicted of possession of child pornography while a student in Pullman, Washington.  U.S. District Judge James L. Robart imposed the mandatory minimum 15-year sentence for offenders with a prior conviction for a child sex offense, and ordered HARTUNG to be on lifetime supervised release following the prison sentence.

        “This convicted sex offender patronized online gaming sites predominately frequented by minors,” said U.S. Attorney Annette L. Hayes.  “He spent years cultivating relationships with malleable young teens, grooming them and plying them with misinformation about his age, identity, and most importantly his intentions.  This case serves as a reminder to parents to be engaged in their children’s online lives.”

            According to records filed in the case, HARTUNG cultivated relationships with at least three teen-age boys online over years of playing video games.  HARTUNG convinced the teens he was also a teen-ager and sent the teens gift cards, online game points and gifts.  HARTUNG contacted the teens via text message, SKYPE, and FaceTime.  In one instance HARTUNG traveled to the victim’s state (Arizona) to provide him with a laptop computer.  Messages recovered from HARTUNG’s and the victim’s media devices reveal HARTUNG was trading gifts, game items and money for sexually explicit images of the victims.  Before law enforcement executed a search warrant in April 2014, HARTUNG had been planning to travel to Colorado to contact the victims.

            The case was investigated by the Arapahoe County Sheriff’s Office in Colorado, the Kirkland Police Department, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).  The case was prosecuted by Special Assistant United States Attorney Cecelia Gregson.  Ms. Gregson is a Senior Deputy Prosecuting Attorney for the King County Prosecutor’s Office specially designated to prosecute child exploitation cases in federal court.

 

            A Puyallup man making hash oil for an illegal marijuana edible operation was sentenced today in U.S. District Court in Tacoma to 24 months in prison and three years’ supervised release, announced U.S. Attorney Annette L. Hayes.  SETH M. CLEEK, 22, was using highly flammable butane gas to make hash oil on May 20, 2014 when the operation exploded and caught fire.  Butane canisters were hurled in every direction – putting those living near the scene, and first responders at risk.  One canister was driven through a plastic planter – demonstrating the force of the explosion.  Fortunately CLEEK’s family, including his 18-month-old child, was not injured in the blast.  U.S. District Judge Ronald B. Leighton imposed the sentence.

            According to records filed in the case, CLEEK was being paid $10 for each “tube” of marijuana he sought to turn into butane honey oil (BHO).  The process, which involves forcing butane gas through marijuana clippings packed in a tube, and then boiling off the solvent can prove highly explosive.  CLEEK was using some 20 cases of butane supplied to him by co-defendant Kevin Weeks, when the operation exploded.  The resulting fire melted the siding on the Puyallup home and destroyed a plastic basketball backboard.

            The investigation revealed that CLEEK was working for Weeks – the operator of a marijuana “medible” company called ‘Cap’n Cosmics.  The company had no state licensure to make marijuana products, and used marketing that mimics the look of a children’s cereal, “Cap’n Crunch.”  Search warrants served several weeks after the Puyallup explosion revealed that Weeks had moved the BHO manufacturing operation to an industrial area, but was using a method that could have resulted in a much greater and even more damaging explosion.  In all some 1800 pounds of marijuana and marijuana laced food products were seized in the investigation.

            The case was investigated by the Puyallup Police Department, Pierce County Sheriff’s Department, the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).  The Pierce County Prosecutors Office assisted with the case.  The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and Todd Greenberg.

 

            Ocean Park, Washington oyster processing company WIEGARDT BROTHERS, INC. (WBI) and company President and majority owner FREDERIC “FRITZ” WIEGARDT, pleaded guilty today in U.S. District Court in Tacoma to violating the Clean Water Act, announced U.S. Attorney Annette L. Hayes.  The company admits that from at least 2012 to 2014, the company violated its permit to discharge effluent into Willapa Bay.  Specifically, the company President knew that the company’s General Manager was not properly performing the required monthly effluent sampling as required by the permit.  As part of its guilty plea WIEGARDT BROTHERS, INC. agreed to pay a $100,000 fine, make a $75,000 community service payment, implement an EPA approved environmental management system to insure future compliance, and publish a public apology in the Pacific Coast Shellfish Growers Association’s quarterly newsletter.  As part of his plea agreement, Mr. WIEGARDT is jointly responsible for payment of the $100,000 criminal fine and must complete 75 hours of community service.  Under the terms of the plea agreements, Magistrate Judge David W. Christel is not bound by the sentencing agreements and is free to impose any sentence allowed by law.

            “Protection of our environment is at the heart of Clean Water Act,” said U.S. Attorney Annette L. Hayes.  “Here, a company that profits from our region’s clean waters failed to take important steps to protect those very resources.  These pleas, including the mandated environmental management system, will provide regulatory officials the means to monitor the company’s compliance efforts going forward.”

            “America’s environmental laws protect human health by keeping our harbors, bays and waterways from becoming dumping grounds for waste materials,” said Lance Ehrig, Acting Special Agent in Charge of EPA’s criminal enforcement program in the state of Washington.  “The defendants failed to take the necessary steps to verify that wastewater discharges from the production facility did not include pollutants above approved permit limits.  Given this failure, it is appropriate that the company pay to improve Willapa Bay, one of the most pristine estuaries in the United States, and implement a compliance plan to help assure this type of criminal violation doesn’t happen again.”

            According to the plea agreement the oyster processing company has a National Pollution Discharge Elimination System (NPDES) permit which requires monthly testing to ensure the wastewater discharged from the plant does not have harmful levels of pollutants such as fecal coliform.  The water samples are to be taken from the discharge pipe with the lab analysis and data submitted to the Washington State Department of Ecology.  At some point before 2012, WIEGARDT became aware that the general manager at the plant was not taking the samples from the discharge pipe because some of the equipment was not working properly.  In 2012, WIEGARDT was informed by the general manager that the samples were being taken from the “bubbler,” a water and air based cleaning system.  Sampling from this location is not representative of the facility’s waste stream and is not authorized by the facility’s NPDES permit.  Indeed, sampling from the bubbler – the location where shucked oysters are cleaned – failed to account for the vast majority of wastewater components that were discharged from the facility during hours of operation.

            After being notified about the improper sampling and reporting, WIEGARDT took no action for more than a year.  On August 22, 2014 the company reported the violations of the NPDES permit to the Department of Ecology and has been working with environmental regulators on a remediation plan.  Given the company’s practices, regulators were unable to assess whether the violations resulted in any environmental harm.

            The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID) and is being prosecuted by Assistant United States Attorney James Oesterle and Special Assistant United States Attorney Karla Perrin.

 

            A convicted drug dealer, arrested with a stolen firearm, meth and heroin while on state probation, was found guilty by a federal jury following a week-long trial, announced U.S. Attorney Annette L. Hayes.  SETH ISSAC MORGAN, 33, was convicted June 15, 2015 of possession of methamphetamine with intent to distribute, possession of heroin with intent to distribute, possession of a firearm during and in relation to drug trafficking, and felon in possession of a firearm.  When sentenced by Chief U.S. District Judge Marsha J. Pechman on September 18, 2015, MORGAN faces a mandatory minimum of 15 years in prison.

            “Drugs and guns are a dangerous combination, especially when it involves stolen firearms as it does in this case,” said U.S. Attorney Annette L. Hayes.  “I commend the federal, state and local law enforcement agencies who worked together to develop the evidence that led to Mr. Morgan’s conviction.”

            According to records filed in the case and testimony at trial, in November 2013, law enforcement in the Everett area received multiple reports regarding MORGAN’s alleged drug dealing and possible connection to stolen firearms.  MORGAN was the subject of a Washington State Department of Corrections warrant for violating the terms of his probation.  Law enforcement located MORGAN at a north Everett apartment.  Surveillance revealed significant traffic to the apartment, an indication of possible drug dealing.  On November 26, 2013, when MORGAN emerged from the apartment with a backpack, officers arrested him as he attempted to back out of a parking space.  In the backpack MORGAN had methamphetamine, heroin and oxycodone packaged for distribution, cash and a Kahr, 9mm pistol which had been reported stolen.  A search of MORGAN’s apartment turned up additional drug residue and drug ledgers.

            MORGAN has seven prior felony convictions including: robbery (Snohomish County 2003); rape (Snohomish County 2003); attempted burglary (Washoe County, Nevada 2006); failure to register as a sex offender (Snohomish County 2008); criminal impersonation (Snohomish County 2009); possession of a controlled substance with intent to manufacture or deliver (Snohomish County 2010); unlawful possession of a firearm (Snohomish County 2010).

            The firearm MORGAN possessed was one of 29 stolen in a burglary of the Marysville Fred Meyer store.  Law enforcement received information that MORGAN purchased a number of stolen firearms that had been taken in the burglary.  The man who stole the firearms was sentenced in April to ten years in prison.  Others involved in selling the stolen firearms received prison sentences of 3-5 years in prison.

            The lead investigative agency on the MORGAN prosecution was the Everett Police Department and Washington State Department of Corrections, with assistance from the Snohomish County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Snohomish County Prosecuting Attorney’s Office.

            The case was prosecuted by Assistant United States Attorneys Kate Crisham and Special Assistant United States Attorney Benjamin Diggs.

A serial bank robber dubbed the “Alabama Band Robber” because of a hat he wore, was sentenced today in U.S. District Court in Seattle to ten years in prison for five counts of bank robbery and one count of possession of a stolen firearm, announced United States Attorney Annette L. Hayes.  MICHAEL RYAN HARDESTY, 41, of Woodinville, Washington was arrested August 19, 2014, after law enforcement linked him to five bank robberies in King, Snohomish and Whatcom Counties.  At sentencing U.S. District Judge Ricardo S. Martinez highlighted the impact on the victim bank tellers saying “He scared the absolute daylights out of each and every one of these victims.  Many of them will live with that for many, many years.”

According to records filed in the case, HARDESTY was identified as a suspect in multiple bank robberies after the FBI released surveillance photos from the banks and dubbed him the “Alabama Band Robber” because of a hat that had the band’s distinctive name above the brim.  He wore the hat in the July 11, 2014 robbery.  A tipster identified the robber from the photos.  HARDESTY pleaded guilty to the following robberies:

Bank of America, Martha Lake Branch, Lynnwood, July 7, 2014

Whidbey Island Bank, North Seattle Branch, July 11, 2014

Washington Federal, Bakerview Branch, Bellingham, July 18, 2014

Washington Federal, Lakeview Branch, Bellingham, July 25, 2014

Wells Fargo, Martha Lake Branch, Lynnwood, July 30, 2014

Law enforcement identified two cars associated with HARDESTY.  One car was located in Burlington, Washington, but HARDESTY was able to evade police.  Later, the Snohomish County Violent Offender Task Force (SCVOTF) located HARDESTY on I-5 in Snohomish County.  He fled on foot and was ultimately apprehended by a K-9 who tracked him to the 12700 block of 3rd Avenue West.  Law enforcement discovered a stolen firearm in HARDESTY’s belongings.  HARDESTY is required to pay restitution of $34,889 – the total taken in the five robberies.

In asking the court for a sentence of more than a dozen years in prison, prosecutors noted the impact the robberies had on the victim tellers saying HARDESTY “left a trail of traumatized victims, some of whom have submitted victim statements describing how they and others have been impacted by Defendant’s criminal acts.  Fortunately, no one suffered physical harm during these bank robberies, but the risk potential was obviously high.”

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

Several agencies were involved in the bank robbery investigation, as well as searching for the suspect, including the FBI’s Seattle Safe Streets Task Force, King County Sheriff’s Office, Whatcom County Sheriff’s Office, Bellingham Police, Mt. Vernon Police, Burlington Police and Child Protective Services.  The Snohomish County Violent Offender Task Force is a multi-agency unit partnership with the Snohomish County Sheriff’s Office, U.S. Marshals Service and Department of Corrections.

A 31-year-old King County man was sentenced today in U.S. District Court in Seattle to seven years in prison for his involvement in eight bank robberies in Western Washington, announced U.S. Attorney Annette L. Hayes.  VINCENT G. THOMPSON, recruited juveniles who he and a partner trained to commit bank robberies.  In addition, THOMPSON and his partner, Robert Cal Adams, robbed Chase Bank on Canyon Road East in Puyallup on April 14, 2014.  At sentencing U.S. District Judge John C. Coughenour said the sentence was appropriate because THOMPSON involved juveniles in the crimes.  Judge Coughenour ordered THOMPSON to serve three years of supervised release following the prison sentence.

On January 26, 2015, THOMPSON pleaded guilty to two counts of bank robbery.  THOMPSON’s co-defendant, Robert Adams was previously sentenced to 120 months for his involvement in a string of bank robberies where three juveniles were provided with threatening notes and instruction on how to execute the bank robberies.  Those robberies include the April 1, 2014 robbery of Chase Bank on Pacific Avenue in Tacoma; the April 7, 2014 robbery of US Bank on 176th St., Puyallup, Washington; the April 9, 2014 robberies of Alaska Federal Credit Union branches in Renton and Kent, Washington; the April 9, 2014 robbery of US Bank on Pacific Highway in Des Moines, Washington; the April 10, 2014 robbery of Wells Fargo on 72nd Street East, Tacoma; the April 11, 2014 robbery of BECU on Pacific Highway South, Kent, and the April 11, 2014 robbery of Bank of America on SW 336th St., Federal Way, Washington.

In asking for the seven year sentence prosecutors wrote to the court, “Thompson’s choice to assist in sending juveniles to rob banks presents an extraordinary risk to the community, bank tellers, security guards, law enforcement and – most significantly – the juveniles themselves.  This was quite literally a tragedy waiting to happen…. for an adult to encourage juveniles to engage in serious criminal actions – simply because the adult wanted to be ‘paid’ without working – is deserving of a significant period of incarceration.”  

The case was investigated by the FBI’s Seattle Safe Streets Task Force, with assistance from multiple local police departments and the Washington State Department of Corrections.

The case was prosecuted by Special Assistant United States Attorney Stephen Hobbs.  Mr. Hobbs is a Senior Deputy King County prosecutor specially designated to prosecute cases in federal court.

A Seattle man who was the subject of an international manhunt last fall, was sentenced today in U.S. District Court in Seattle to time served -- about seven months in prison -- for International Parental Kidnapping, announced U.S. Attorney Annette L. Hayes.  JEFFREY FORD HANSON, 46, was taken into custody in late October 2014, on the South Pacific island of Niue, 1,500 miles northeast of New Zealand.  HANSON had been sought by law enforcement since September 12, 2014, when he was charged with international parental kidnapping for leaving Seattle with his son in violation of a court approved parenting plan.  At the sentencing hearing U.S. District Judge James L. Robart said, “This kind of behavior, international parental kidnapping, is surprisingly common and has provoked significant penalties.”  Judge Robart ordered one year of supervised release for HANSON.

According to records filed in the case, on July 17, 2014, HANSON’s son arrived in Seattle with his mother’s permission to visit for the summer months.  HANSON knew he was required to return the child to Hazelton, Pennsylvania prior to the start of school in early September 2014.  On August 30, 2014, unbeknownst to the mother, HANSON departed the Seattle area aboard his sailboat, the Draco, with the child on board and set sail across the Pacific Ocean.  When the boy failed to return to Pennsylvania before school started, the boy’s mother alerted law enforcement.  The Coast Guard and law enforcement agencies throughout the Pacific Rim were then asked to be on the lookout for the boat and the child.

According to the FBI, the Niue Police arrested HANSON on October 29th, after HANSON docked his sailboat on Niue shores in violation of Niue immigration and customs laws.  The Niue police knew of the warrant for Hanson's arrest because the FBI’s Legal Attaché office in Canberra, Australia, passed the missing person and wanted fliers to the Pacific Transnational Crime Coordination Center (PTCCC), a multi-national law enforcement network, of which the Niue Police Department is a member.  Niue police publicized the search for Hanson in the country, and alert members of the public provided the crucial tip that led authorities to HANSON.  The 9-year-old boy was safely returned to his mother in Pennsylvania.

The investigation was led jointly by the FBI’s Seattle Safe Streets Task Force (SSSTF), whose many Task Force Officers include members of the Seattle Police Department Major Crimes Task Force.  The Hazleton Police Department, the FBI’s Philadelphia and Los Angeles field offices, the Port of Seattle Police Department, the U.S. Coast Guard, and the National Center for Missing and Exploited Children collaborated on the investigation from the beginning.  The FBI also values the tremendous assistance of the New Zealand Police, New Zealand Customs Service, and Immigration New Zealand.

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

          The man who touched off a devastating Bellevue apartment fire with his illegal hash oil manufacturing was sentenced today in U.S. District Court in Seattle to nine years in prison, announced U.S. Attorney Annette L. Hayes.  DAVID RICHARD SCHULTZ, II, 33, was using highly explosive butane gas to make hash oil in the Hampton Greens Apartment complex on November 5, 2013.  The gas exploded and numerous people in the apartment complex were injured fleeing the fire.  One of them, a former Mayor of Bellevue, died following treatment for injuries sustained while trying to escape the building.  SCHULTZ was arrested nine months later in a California motel, again with the explosive gas used to make hash oil.  At sentencing U.S. District Judge James L. Robart said, “We need to educate the public that the legalization of marijuana in the State of Washington is not unlimited and it does not include the manufacturing of homemade hash oil.”

           “In just the last year, we have charged a dozen people with the dangerous and illegal manufacture of butane hash oil (BHO),” said U.S. Attorney Annette L. Hayes.  “This case tragically demonstrates why this conduct must be stopped.  BHO extraction operations are like the meth labs we have worked so hard to eradicate from our communities.  Among other things, they involve the unauthorized use of dangerous solvents, and especially when located in homes and apartment buildings, pose a serious risk of death and property damage as so disastrously happened in this case.”

            According to records filed in the case, three people were charged in connection with the Bellevue explosion and fire on November 5, 2013.  Former Bellevue Mayor Nan Campbell was hospitalized for a broken pelvis she suffered trying to escape the flames.  She later died following complications after her hospitalization.  Two other apartment residents suffered shattered bones as they had to jump from their upper level apartments.  In all the fire caused $2 million in property damage.

            In court today, one of Nan Campbell’s daughters, Anne Campbell Spangler told the court about the loss of her vibrant and involved mother because of a selfish and thoughtless act.   Patty Campbell read a letter from another victim of the explosion who was unable to travel to attend the court hearing.  The letter describes how the young middle school teacher had to jump from a third floor balcony to escape the flames, shattering her bones – leaving her legs “like Legos.”  The young woman described her month in a nursing home, her ongoing pain, and how she will never be able to run or play soccer again.  The fire destroyed her belongings including irreplaceable scrapbooks and childhood photos.

             Prosecutors had asked for the maximum sentence allowed by law: ten years in prison.

            Two other defendants, Daniel James Strycharske, 29, and Jesse D. Kaplan, 32, will be sentenced in July.  The two men rented the apartment and allowed SCHULTZ to set up the BHO manufacturing equipment in their space.  The men planned to sell the BHO for profit.  All three men suffered injuries in the explosion.

            This case was investigated by multiple local and federal agencies, including: the Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the U.S. Marshals Service, and the Bellevue Police and Fire Departments.

          The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Vince Lombardi.

Two men who manipulated penny stocks, and then laundered the proceeds by purchasing precious metals, were sentenced to prison today in U.S. District Court in Tacoma, announced U.S. Attorney Annette L. Hayes.  ALEXANDER HAWATMEH, 25, of Salem, Oregon was sentenced to five years in prison for securities fraud in a scheme that netted him more than $1.7 million.  CHRISTOPHER MROWCA, 25, was sentenced to three years in prison for conspiracy to commit securities fraud.  At HAWATMEH’s sentencing hearing U.S. District Judge Ronald B. Leighton said, “This sentence is driven by the corrosive effect that these actions have done to our financial institutions.”

“The stock manipulation in this case adversely impacted individual victims, and undermined the integrity of the financial markets,” said U.S. Attorney Annette L. Hayes.  “An even playing field is essential to the ongoing viability and success of American financial markets.  This blatant criminal activity undercuts trust in those markets by promoting a sense that the system is rigged against honest investors.”

According to records filed in the case, between December 2011 and April 2012, CHRISTOPHER MROWCA, ALEXANDER HAWATMEH and other co-conspirators engaged in a scheme to make it appear that a particular penny stock was being actively traded.  During this period, the men accounted for 85% of the trades in ISM International, Inc. (ticker symbol “ISML”), a company related to a purported flea market business in Florida.  The conspirators allegedly engaged in “matched trades” where one sold shares and the other bought shares to make it appear investors were interested in the company.  In fact the ISML penny stock had little value and no business that would generate real revenue or income.  In addition to the trades to make it appear there was interest in the stock, the men sent fraudulent and misleading “blast” e-mails via promotional websites and email addresses under their control with the intent of increasing demand for the ISML stock.  The blast emails enticed other unknowing investors to buy the stock – then the men sold their shares, earning a profit of more than $223,000.  MROWCA and HAWATMEH then engaged in a scheme to launder the proceeds of the illegal stock manipulation scheme by passing the money through third party accounts and the purchase of gold and silver bars.

HAWATMEH admits manipulating three other penny stocks for significant profit.  He and a co-conspirator manipulated Allied Products Corporation (ticker symbol “ADPC”), resulting in more than $94,000 in profits which he shared with Tovy Pustovit, a defendant in a related case; HAWATMEH made $425,141 in profits manipulating trading in Aden Solutions, Inc. (ticker symbol “ADSU”), and he made $1,272,281 in profits trading Riverdale Oil & Gas, Inc. (ticker symbol “RVDO”).

MROWCA has agreed to forfeit $244,000 in profits from the ISML stock manipulation.  HAWATMEH has forfeited approximately $700,000 in assets and will be responsible for a money judgment of about $1 million with credit for amounts already paid to the Securities and Exchange Commission (SEC).

Pustovit pleaded guilty last month and is scheduled to be sentenced September 14, 2014.  A fourth defendant charged in the scheme, Mikhail Galas, 25, is scheduled to be sentenced June 26, 2015.

The case is being investigated by the FBI.  The Securities and Exchange Commission (SEC) is conducting a parallel civil investigation.  The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Katheryn Kim Frierson.

            A former active duty military member from Joint Base Lewis-McChord (JBLM) was sentenced today in U.S. District Court in Tacoma to 25 years in prison and lifetime supervised release for Production of Child Pornography, and Distribution of Child Pornography, announced U.S. Attorney Annette L. Hayes.  JOSEPH THOMAS FRENCH, 29, who resided in Florida prior to enlisting in the Army, was arrested in February 2014 and pleaded guilty March 12, 2015.  At the sentencing hearing U.S. District Judge Ronald B. Leighton said, “This is a very serious and tragic offense…An offense that should be punished heavily.”

            “Words cannot adequately express the horror of the conduct at issue in this case,” said U.S. Attorney Annette L. Hayes.  “Beyond the abuse itself, the fact that some people used technology to watch the conduct while it was on-going – without doing anything to stop it – is a fact that cannot be forgotten or ignored.”

            According to records filed in the case, a young child disclosed to her parent in February 2014, that FRENCH had repeatedly raped her from the age of seven.  The abuse occurred between September 2012 and July 2013.  The rapes occurred on JBLM property and FRENCH recorded some of the assaults.  Further, FRENCH committed some of the assaults while other people watched the rapes via Skype.  Within days FRENCH was arrested and has been in state or federal custody ever since.

            The case was investigated by the FBI and the Washington State Patrol’s Missing and Exploited Children Task Force.  The case was prosecuted by Assistant United States Attorney Kate Vaughan.

            A King County man who fled to Moldova, in Eastern Europe before being indicted by a federal grand jury for loans fraudulently obtained from Westsound Bank, was sentenced today in U.S. District Court in Seattle to five years in prison, announced U.S. Attorney Annette L. Hayes.  ALEKSANDR KRAVCHENKO, 36, pleaded guilty in March 2015 to conspiracy to commit bank fraud and filing a false income tax return.  His wife, GALINA KRAVCHENKO, 35, was sentenced to just over five months in prison and one year of supervised release following her plea to filing a false income tax return.  The couple profited from a mortgage fraud scheme in which ALEKSANDR KRAVCHENKO submitted phony loan applications to Westsound Bank.  GALINA KRAVCHENKO acted as the real estate agent in the scheme earning large commissions on the fraudulent sales.  ALEKSANDR KRAVCHENKO’s plea agreement estimates the loss amount on the bank fraud scheme at more than $10 million, and the tax loss on the false returns at more than $370,000.  Chief U.S. District Judge Marsha J. Pechman imposed three years of supervised release on ALEKSANDR KRAVCHENKO.

         According to records filed in the case, the KRAVCHENKOs were indicted in May 2009 for an extensive bank fraud scheme involving straw buyers and false statements on mortgage applications.  According to facts admitted in the plea agreements, ALEKSANDR KRAVCHENKO had his wife GALINA, a real estate agent, locate real property that was available for purchase.  ALEKSANDR KRAVCHENKO then recruited otherwise unqualified buyers to participate in purchasing and building on the properties.  ALEKSANDR KRAVCHENKO submitted false and fraudulent construction loan applications and related documents to Westsound Bank, thereby causing Westsound Bank to make unsound loans.  A portion of the fraudulently-obtained loan proceeds were diverted for ALEKSANDR KRAVCHENKO’s personal use and benefit, and to further the fraud scheme.  GALINA KRAVCHENKO made substantial real estate commissions on the deals.  ALEKSANDR KRAVCHENKO submitted 55 loan packets to Westsound Bank worth $49 million.  Ultimately the bank suffered a $10.7 million loss on the loans and was closed by regulators on May 8, 2009.

          Aware of the investigation, but before the indictment was returned, the two KRAVCHENKOs fled the U.S. and went to Moldova where ALEKSANDR KRAVCHENKO retains citizenship.  The two were out of the reach of U.S. law enforcement until December 2014, when GALINA KRAVCHENKO was returned to the U.S. based on an extradition warrant.  GALINA KRAVCHENKO had been arrested in Moldova in September 2014 for having false Moldovan and Russian travel documents.  ALEKSANDR KRAVCHENKO returned to the U.S on February 23, 2015 to resolve the criminal charges.

          The court has ordered ALEKSANDR KRAVCHENKO to make restitution of $10,759,722 for the bank fraud scheme and $370,541 for filing a false tax return.  GALINA KRAVCHENKO has also been ordered to pay back the $370,541 in tax loss caused by filing a false tax return.

          The case was investigated by the FBI, the Federal Deposit Insurance Corporation, Office of Inspector General, the Internal Revenue Service, Criminal Investigations, and the Washington State Department of Financial Institutions.  The case is being prosecuted by Assistant United States Attorneys Tessa Gorman and Thomas Woods.

            A 52-year-old Vancouver, British Columbia man was sentenced today in U.S. District Court in Seattle to seven years in prison and four years of supervised release in connection with a scheme to smuggle large quantities of MDMA into the U.S., and Cocaine into Canada, announced U.S. Attorney Annette L. Hayes.  PHILIP COTE was arrested in August 2014, and in February 2015 pleaded guilty to Conspiracy to Distribute MDMA and Cocaine.  COTE and a co-conspirator traveled in two cars in tandem across the border 86 times since 2006 as part of their drug trafficking activities.  At sentencing U.S. District Judge Robert S. Lasnik noted that COTE had “seen people’s lives ruined by drugs,” and yet he transported drugs to make money.

            “Enforcement of the federal drug laws at the U.S.-Canada border is a priority for federal law enforcement.  Like this defendant, those transporting large loads of dangerous drugs are responsible for enlarging the circle of drug addiction in our communities and will be held to account,” said U.S. Attorney Annette L. Hayes.  “I commend Homeland Security Investigations for their diligent work on this case.”

            According to records filed in the case, COTE and a co-conspirator made frequent drug runs across the border with one person acting as a lookout in one vehicle and the other carrying drugs in a secret compartment in their vehicle.  On July 25, 2014 COTE traveled from British Columbia to Blaine, Washington.  He supplied his contact in Blaine with 20 kilos of MDMA or ecstasy hidden in the trunk of a car.  COTE met with the contact, believing the contact would deliver the drugs to Southern California.  COTE instructed the contact to pick up a 32 kilo load of cocaine and hide it in the walls of an SUV for the return trip.  In fact the person COTE met was working with agents from U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (HSI).  On August 20, an undercover officer picked up the cocaine load in Southern California.  On August 25, 2014 when COTE went to pick up the load in Blaine, he was arrested.  COTE has been at the Federal Detention Center at SeaTac since his arrest.

            “Cote thought his clean record and trusted traveler program membership would allow him to escape scrutiny at the border,” said Brad Bench, Special Agent in Charge of Homeland Security Investigations in Seattle.  “He was mistaken.  It was HSI’s coordinated effort to detect border security violators that exposed Cote and his drug trafficking operation.”

The street value of the cocaine that COTE sought to transport to Canada on just this one trip was $1.5 million.

            The case was investigated by the Blaine Border Enforcement Security Task Force (BEST Blaine).  The ICE Homeland Security Investigations-led BEST is composed of full-time members from U.S. Customs and Border Protection Offices of Air and Marine, Field Operations and Border Patrol; the Whatcom County Sheriff's Office; the U.S. Coast Guard Investigative Service; the Drug Enforcement Administration; the Canada Border Services Agency; and the Royal Canadian Mounted Police.  BEST Blaine combats transnational criminal organizations by identifying, investigating and eliminating vulnerabilities along one of the most diverse geographic areas along the northern border.

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

A Tacoma, Washington woman who used a prison pen pal program to obtain other peoples’ personally identifying information was sentenced today in U.S. District Court in Tacoma to 30 months in prison for wire fraud and aggravated identity theft, announced U.S. Attorney Annette L. Hayes.  SHANNON HENDERSON, 45, filed more than 150 fraudulent tax returns between 2013 and 2014, seeking more than $170,000 in tax refunds.  Some $56,000 in tax refunds were sent to HENDERSON at the addresses of friends and family members before the scheme was discovered.  At the sentencing hearing U.S. District Judge Ronald B. Leighton said identity theft victimizes people “for no reason other than greed.”

According to the plea agreement, between 2007 and 2009, while incarcerated at the Washington Women’s Correctional Center at Purdy, Washington, HENDERSON became pen pals with various inmates across the country and obtained the names and identifying information of real people from these inmates.  HENDERSON also purchased the personal information of people who were employed in Washington State by ABM Janitorial Services from a co-conspirator in order to use these names to file false and fraudulent U.S. Individual Income Tax Returns.  HENDERSON used both the names provided by inmates and the names purchased from the co-conspirator to file the fraudulent returns.  HENDERSON had the fraudulently claimed refunds loaded onto prepaid debit cards and had the cards mailed to her using the addresses of friends and relatives.

Writing to the court prosecutors explained how the identity theft had damaged victims, such as those working for the janitorial service.  One victim wrote in his impact statement that his credit score was affected and as a result he was denied credit and job opportunities.   Judge Leighton ordered HENDERSON to pay $56,605 in restitution to the IRS.

The case was investigated by Internal Revenue Service Criminal Investigation and is being prosecuted by Assistant United States Attorney Rebecca Cohen.

            An enrolled member of the Suquamish Indian Tribe was sentenced today in U.S. District Court in Tacoma to 18 months in prison for two counts of assault resulting in substantial bodily injury, announced U.S. Attorney Annette L. Hayes.  WADE WILLIAMS, 43, of Suquamish, Washington admitted assaulting his domestic partner in February 2013 and in May 2014.  Originally charged for the February 2013 assault in Suquamish Tribal Court, the case was later charged federally when the pattern of abuse continued and culminated with an additional serious assault in May 2014.  At the sentencing hearing U.S. District Judge Ronald B. Leighton said, “I was taught to treat women not as chattel or as property, but as equals ... As partners.  How have we gotten so depraved that we tolerate this conduct for so long?”

            According to records filed in the case, in February 2013, WILLIAMS assaulted his then girlfriend, spitting in her face, breaking her cell phone to prevent her from calling the police, and pushing her to the floor where she fell on other items bruising her hands, arms and legs.  The victim sought medical attention, and WILLIAMS was charged in Tribal Court.  WILLIAMS later violated a Tribal Court-issued No Contact Order and at the urging of WILLIAMS and his family, the victim recanted her statement to police and reconciled with WILLIAMS.  As a result he Tribal Court charges were dismissed.  On May 5, 2014, WILLIAMS repeatedly beat the victim with a broom, and grabbed her and held her so tightly she could not breathe and lost consciousness.  The victim fell and hit her head on stone steps, creating permanent vision problems that ultimately required surgery.

            WILLIAMS pleaded guilty to these two federal assault crimes in March 2015.

            The case was investigated by the Suquamish Tribal Police Department and the FBI.  The case is being prosecuted by Assistant United States Attorneys Ye-Ting Woo and Amy Jaquette.

            Because the Suquamish Indian Reservation is a federal-jurisdiction reservation, certain violent crimes occurring on that Reservation are investigated by the FBI in conjunction with the Suquamish Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.

           Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives than Caucasian women.  The U.S. Attorney’s Office in this District coordinates the engagement and action relative to public safety in tribal communities, including enhanced efforts to investigate and prosecute violent crimes against Indian and non-Indian women and children on federal-jurisdiction reservations under the Justice Department’s Tribal Safety program.  To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.

          A repeat offender who was convicted of child pornography offenses in Florida, pleaded guilty today in U.S. District Court in Tacoma to production, possession and distribution of child pornography, announced U.S. Attorney Annette L. Hayes.  CALEB DEAN ECCLES, 32, also went by the name “Caleb Eckoles” in order to avoid detection of his sex offender registration status.  When sentenced on August 14, 2015, ECCLES faces a mandatory minimum 25 years in prison.

            According to the statement of facts in the plea agreement, ECCLES was convicted in Florida in 2002 of sixty three child pornography offenses and was sentenced to ten years of probation.  He was required to register as a sex offender.  ECCLES relocated to the Lake Tapps area and held his name out to be ‘Eckoles’ to avoid any linkage to his sex offender registration.  Using that name, ECCLES volunteered to babysit for families in his neighborhood.  ECCLES admits in his plea agreement that he sought to have access to young boys so that he could sexually abuse them and record the sexual abuse using his phone and other electronic devices.

            In October 2013, ECCLES created an account at a website known for trading child pornography.  Between October 2013 and March 2014 ECCLES uploaded sexually explicit images of a 10-year-old boy.  On two different dates in February 2014, ECCLES made videos of his sexual molestation of the young boy.

            ECCLES came to the attention of law enforcement due to an investigation of the website used to trade child pornography.

            The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).  The case is being prosecuted by Assistant United States Attorney Kate Vaughan.

            A 27–year-old Everett man who supplied highly pure methamphetamine to a drug trafficking organization operating in Western Washington was sentenced today in U.S. District Court in Seattle to seven years in prison and four years of supervised release for conspiracy to distribute methamphetamine, announced U.S. Attorney Annette L. Hayes.  JAIME ARAUJO supplied the highly pure methamphetamine to a number of different drug dealers operating in Whatcom, Skagit and Snohomish Counties.  ARAUJO was arrested in March 2014 following a lengthy wiretap investigation of heroin and methamphetamine trafficking.  In ARAUJO’s residence law enforcement recovered highly pure methamphetamine, more than $15,000 in cash and evidence of multiple wire transfers of money to Mexico.  At sentencing U.S. District Judge Robert S. Lasnik said ARAUJO “had a serious part in a drug trafficking organization wreaking havoc in the community.”

According to records filed in the case, ARAUJO was identified in court authorized wire-taps as the supplier of highly pure methamphetamine to various drug dealers.  In recorded phone calls ARAUJO used coded phrases as he talked with others about drug deals and drug  smuggling.  In one instance he described bringing kilograms of methamphetamine north in a suitcase on a bus.  Evidence recovered at ARAUJO’s residence revealed he had been transferring drug money to Mexico, and planned to take drug cash to Mexico to purchase properties.  Even after his arrest and incarceration at the Federal Detention Center at SeaTac, ARAUJO made statements on recorded telephone calls that indicate he was still trying to control his drug operation.

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 Drug Enforcement Administration (DEA, Bellingham Resident Office), the Whatcom County Drug and Gang Task Force, Skagit County Inter-local Drug Enforcement Unit, Snohomish Regional Drug and Gang Task Force, the U.S. Secret Service, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) and Customs and Border Protection Air and Marine Division.

            The case was prosecuted by Assistant United States Attorneys Steven Masada and Karyn Johnson.

            An Everett resident with prior federal drug felony convictions, was sentenced today in U.S. District Court in Seattle to more than 14 years in prison, announced U.S. Attorney Annette L. Hayes.  JOSEPH R. KALAC was convicted at his September 2014 trial of three counts of possessing a controlled substance with intent to distribute, one count of possessing a firearm in furtherance of a drug trafficking crime, and one count each of being a felon in possession of a firearm and ammunition.  KALAC later pleaded guilty to an additional charge of failing to surrender to serve a prison sentence as ordered by the court.  At sentencing U.S. District Judge Richard A. Jones noted KALAC has an “extensive criminal history and a poor track record on supervision,” and added KALAC is at a “high risk to reoffend.”

            According to records filed in the case, KALAC was spotted in a car in an area known for drug activity.  When a Snohomish County deputy approached, KALAC sped away.  He lost control of his car, crashed it, and ran away from pursuing officers.  KALAC was located and arrested.  After obtaining a warrant, officers searched the crashed car and found heroin, methamphetamine, crack cocaine, and a loaded semi-automatic pistol in a backpack under the driver’s seat.  The backpack also had a scale, packaging material and a drug ledger.  At the time KALAC was already on federal supervision for a 2009 drug distribution conviction.

            In asking the court for a significant sentence, prosecutors noted that KALAC created a significant danger in the community.  “As a felon, KALAC had no right to have a gun….But he nonetheless decided that his interests were better served by arming himself.  The drug trade is a dangerous business….. By introducing a gun into an already volatile mix, KALAC tremendously ratcheted up the danger he and those around him faced.”

            KALAC’s sentence calls for him to serve 96 months (eight years) on the drug charges and for being a felon in possession of a firearm.  An additional 60 months (5 years) sentence must run consecutive for using a firearm in a drug trafficking offense.  The additional one year in prison is for failing to surrender.

            The case was investigated by the Snohomish County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, & Explosives.  The case was prosecuted by Assistant United States Attorneys Mike Dion, Matthew Hampton and Grady Leupold.

A 31-year-old Tacoma man who transported two teen-age runaways from Spokane to Pierce County and advertised them for sex via Backpage.com, was sentenced today in U.S. District Court in Tacoma to 100 months in prison, announced U.S. Attorney Annette L. Hayes.  CLIFTON ESKRIDGE, III, pleaded guilty to possession of child pornography in July 2014.  At sentencing U.S. District Judge Benjamin H. Settle said ESKRIDGE caused “great harm to these girls” and ordered ESKRIDGE to serve 15 years of supervised release following prison.

            According to records filed in the case, in March 2013, ESKRIDGE transported two teen girls, ages 15 and 16 from Spokane, Washington to Pierce County, and both girls were runaways.  ESKRIDGE produced a sexually explicit video and photos of the teen girls in April 2013 using his smartphone and computer.  ESKRIDGE also advertised the teens for sex on Backpage.com.  ESKRIDGE was arrested and initially charged in Pierce County Superior Court with commercial sex abuse of a minor.  ESKRIDGE attempted to discourage the teens from speaking to federal investigators but his efforts were unsuccessful.  The investigation resulted in a federal indictment in February 2014.  ESKRIDGE has been in federal custody since that time.

            ESKRIDGE was ordered to register as a sex offender.

            The case was investigated by the South Sound Child Exploitation Task Force which involves agents and officers of the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) and the Lakewood Police Department.

            The case was prosecuted by Assistant United States Attorney Ye-Ting Woo.

A Vancouver, Washington resident who was a minor participant in an earlier ‘pump and dump’ stock scheme, pleaded guilty today to running his own stock fraud scheme in the months following the earlier investigation, announced U.S. Attorney Annette L. Hayes.  TOVY PUSTOVIT, 20, faces up to 20 years in prison when sentenced by U.S. District Judge Ronald B. Leighton on September 14, 2015.  Under the terms of the plea agreement, prosecutors have agreed to recommend a sentence no greater than 63 months in prison.

            According to the facts admitted in the plea agreement, PUSTOVIT participated in a 2012 scheme with Alexander Hawatmeh, Mikhail Galas and Christopher Mrowca to manipulate the stock of ISM International, Inc.  PUSTOVIT was not originally charged criminally in that stock manipulation scheme, but following the arrest of the other defendants, investigators uncovered additional information about PUSTOVIT’s participation and about his continuing to scheme to manipulate penny stocks.

            In August 2014, Judge Leighton entered a preliminary injunction barring PUSTOVIT and the other defendants from engaging in stock fraud in a civil enforcement action brought by the U.S. Securities and Exchange Commission.  In November 2014 PUSTOVIT conspired with another individual in a ‘pump and dump’ scheme involving three companies in the over-the-counter market.  PUSTOVIT and his co-conspirator sought to manipulate the value of Brightech, Inc. (ticker symbol BRTE), General Environmental Management, Inc. (ticker symbol GEVI), and Green Street Capital Corp. (ticker symbol JAGR).  The co-conspirator lined up various apparently unrelated accounts and funded them to purchase the penny stocks.  After substantial amounts of stock had been purchased, the two sent out email blasts from various stock promotion websites they controlled: Infinity Stock Picks, Zeus Alerts and Hulk Alerts urging others to buy the stocks.  When the price rose further, the two dumped their shares making significant profit.

            Specifically, they manipulated GEVI in early 2015, accumulating some 2.7 million shares.  On February 5, 2015 they sent out email blasts from the three different companies touting the stock as being “ready to soar” in value.  The stock price rose sharply on the promotion, and the men sold their stock reaping $83,096 in net profits.  In the days that followed the price of the shares collapsed harming numerous investors who had been defrauded.

            PUSTOVIT has agreed to forfeit to the U.S. $266,373 as criminal proceeds from the scheme.

            The original coconspirators in the trading of ISM International, Inc., Alexander Hawatmeh and Christopher Mrowca, are being sentenced on June 5, 2015.

            The case is being investigated by the FBI.  The Securities and Exchange Commission (SEC) is conducting a parallel civil investigation. The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Katheryn Kim Frierson.

A repeat offender with prior convictions for forgery and identity theft was sentenced today in U.S. District Court in Seattle to four years in prison, announced U.S. Attorney Annette L. Hayes.  BOBBIE DENISE CATTON, 50, pleaded guilty in January 2015 to two counts of possession of stolen mail, one count of access device fraud and one count of aggravated identity theft.  At sentencing U.S. District Judge James L. Robart said he wanted to protect the public from “a sophisticated ID theft criminal who is also a drug addict.”

According to records filed in the case, between March of 2013 and January of 2014, CATTON and her cohorts stole large volumes of mail throughout King County from homes and apartment complexes.  They used stolen checks, credit and debit card information and identifying documents to commit various types of fraud.  When arrested by a King County Sheriff’s Deputy following a traffic stop, CATTON had dozens of credit/debit cards and bank statements in others’ names in her possession, along with financial and identifying information for hundreds of others.  Investigators identified 382 victims in the scheme.

In asking for a significant prison sentence, prosecutors highlighted the impact identity theft has on victims.  “For individual victims, the time and money required to repair the immediate damage is only the beginning.  Once stolen, their identities become a commodity capable of being bought, sold, and traded.  Apprehension and prosecution of the initial perpetrator may do little to end a victim’s ordeal.  They must remain vigilant and continually invest extra time, and money monitoring their financial lives,” prosecutors wrote in their sentencing memo.

CATTON was previously prosecuted federally in 2002 for identity fraud and was sentenced to 33 months in prison.

The case was investigated by the King County Sheriff’s Office and the U.S. Postal Inspection Service (USPIS).  The case was prosecuted by Assistant United States Attorney Matthew Hampton.

            A Seattle man who operated an investment advisory business for more than 20 years, pleaded guilty to wire fraud today in U.S. District Court in Seattle, announced U.S. Attorney Annette L. Hayes.  SATYEN CHATTERJEE, a/k/a Satyen Chattopadhyay, 65, owned and operated Strategic Capital Management, Inc. from 1992 until the Washington State Department of Financial Institutions ordered it to cease operating illegally in October 2013.  CHATTERJEE, who once taught at the University of Washington Business School, admitted engaging in a scheme to defraud investors between 2007 and 2013.  Sentencing is scheduled before U.S. District Judge Thomas S. Zilly on August 20, 2015.

            According to records filed in the case and with the Department of Financial Institutions (DFI), the investigation revealed that at least five victims were defrauded of more than $600,000.  CHATTERJEE convinced various investors to make investments with him in what he represented were fixed rate securities.  But in fact CHATTERJEE transferred the funds to his own bank accounts, used the money for his own expenses, or lost it as a day trader in the stock market.  CHATTERJEE also solicited and accepted investments in a nutritional supplement company called Metamune, Inc, but instead of actually using the money for the nutritional supplement company, CHATTERJEE used the money for his own expenses or to pay off prior investors in the fixed rate securities scheme.

            For one investor CHATTERJEE created a false account statement making the investor believe his investment was secure.  In 2011, CHATTERJEE sent a series of lulling emails to some clients falsely indicating that long time investment associates had defaulted on agreements he had with them, and blaming them for losses in the investments.

Under the terms of the plea agreement, prosecutors will recommend no more than 63 months in prison for CHATTERJEE.  However, Judge Zilly is free to sentence CHATTERJEE up to the statutory maximum of 20 years in prison.

The case was investigated by the Washington State Department of Financial Institutions (DFI) and the FBI.  The case is being prosecuted by Assistant United States Attorney Justin W. Arnold and Special Assistant United States Attorney Robert Kondrat.  Mr. Kondrat is an attorney with DFI.

A convicted bank robber who absconded from supervised release, and lived on the lam for more than five years, was sentenced today in U.S. District Court in Seattle to 12 years in prison, announced U.S. Attorney Annette L. Hayes.  BRADLEY STEVEN ROBINETT, 46, was arrested in Hillsboro, Oregon, on June 2, 2014, when Hillsboro Police took him into custody in a shopping mall parking lot as he returned to a car that had been reported stolen.  ROBINETT pleaded guilty in January 2015 to escape, being a felon in possession of a firearm, and interstate transportation of a stolen vehicle.  As part of his guilty plea, ROBINETT agreed to tell investigators where he had stashed dozens of stolen firearms and other stolen goods near Portland, Oregon, Sammamish, Washington and in Olympic National Park.  U.S. District Judge James L. Robart imposed three years of supervised release following prison and $12,886 in restitution.

“This defendant left a dangerous wake wherever he went – for the law enforcement officials who tried to apprehend him, and the public who lived near his stashes of weapons and other stolen goods,” said U.S. Attorney Annette L. Hayes.  “I commend the FBI and ATF agents who continue to use information from this defendant to protect public safety.”

            According to the indictment and other court filings, ROBINETT was convicted of bank robbery and in 2004 was sentenced to seven years in prison.  In August 2009 he was released from a federal prison in Arizona and put on a bus to Seattle with the requirement that he was to report to a designated halfway house within 48 hours.  ROBINETT never reported to the halfway house and a warrant was issued for him for escape.  In September 2009, police on Bainbridge Island, Washington attempted to stop a car that led them on a high speed chase.  ROBINETT fled from the car and got away.  Inside the car officers found a Glock 9mm pistol and a ballistic vest.  Both items were stolen from the Seattle Police Department several years earlier.  The vehicle ROBINETT was driving was also reported stolen in Oregon.

Before his Oregon arrest, the last time law enforcement saw ROBINETT was in November of 2009, when Washington State Patrol detectives encountered ROBINETT at a park & ride facility in Bellevue.  At the time, ROBINETT was operating a stolen vehicle.  ROBINETT attempted to ram a WSP vehicle before fleeing the area.  The WSP trooper driving the vehicle managed to avoid the collision, but ROBINETT was able to escape.

ROBINETT was indicted for being a felon in possession of a firearm for the gun found in the car on Bainbridge.  In addition to his bank robbery conviction, ROBINETT has prior felony convictions for possession of stolen property (King County and Clallam County), unlawful possession of a machine gun, car theft and burglary (King County).

In 2011, ROBINETT was featured on the programs Washington’s Most Wanted and America’s Most Wanted.

Last June Hillsboro police were patrolling the Fred Meyer parking lot with an automated license plate reader.  Plate readers match license plates to those of stolen cars that have been entered into the system’s database.  The reader noted a Kia with license plates stolen in Portland, while the car’s VIN number linked to a vehicle that had been reported stolen in King County, Washington.  The police officers waited for the driver to return to the vehicle.  They arrested ROBINETT without incident.

The investigation was a joint effort between the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the FBI, the U.S. Marshals Service, the Washington State Patrol (WSP), the Bainbridge Island Police Department, and the Hillsboro, Oregon Police Department.

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

            A former Everett, Washington resident was sentenced today in U.S. District Court in Tacoma to 78 months in prison for bank robbery, announced U.S. Attorney Annette L. Hayes.  ANTHONY JAMES MARTINIS, 42, admitted in February 2015 that he robbed ten banks across four western states.  At sentencing U.S. District Judge Benjamin H. Settle said, “this was a traumatic event . . . tellers don’t know whether you are armed or not and it lives with them for the rest of their lives.”

            MARTINIS was arrested November 3, 2014 in Oklahoma City, Oklahoma after members of the public provided his identity to law enforcement after the surveillance photos from a series of bank robberies were publicized.  The string of bank robberies began September 17, 2014 at the Fibre Federal Credit Union in Longview, Washington.  In each robbery MARTINIS handed the teller a note demanding all the money from the till.  On September 23, 2014, MARTINIS robbed the Chase Bank in Yakima, Washington.  Three days later MARTINIS robbed the Umpqua Bank in Lacey, Washington.  The fourth robbery occurred on October 6, 2014 when the Chase Bank in Milton, Washington was targeted.  Ten days later, MARTINIS had moved on to Oregon, robbing the Umpqua Bank branch in Eugene on October 16, 2014.  That same day MARTINIS robbed the Wells Fargo Bank branch in Salem, Oregon.  The next day he robbed the Wells Fargo Bank branch in Cottage Grove, Oregon.

            The robbery spree continued in Washington with the robbery of the US Bank branch in Vancouver on October 22, 2014.  The next day MARTINIS robbed the US Bank branch in Boise, Idaho.  The final robbery MARTINIS admits committing was the October 25, 2014 robbery of America First Credit Union in Roy, Utah.

            MARTINIS was ordered to pay $17,683 in restitution to the victim banks.

            The case was investigated by the FBI with significant assistance from the Longview Police Department and the U.S. Marshals Service.  The case was prosecuted by Assistant United States Attorney Gregory A. Gruber.

            A 31-year-old King County man was sentenced today in U.S. District Court in Seattle to ten years in prison for his involvement in more than a dozen bank robberies across the state, announced U.S. Attorney Annette L. Hayes.  ROBERT CAL ADAMS, III, 31, was dubbed the “Rabid Fan Bandit” by the FBI because of the various hats with sports logos he wore in a string of bank robberies.  The investigation revealed ADAMS’ involvement in a second string of bank robberies dubbed the “Buddy Bandit” bank robberies where juveniles were recruited, trained and sent in to rob tellers using notes almost identical to the one ADAMS used when solo.  At sentencing U.S. District Judge John C. Coughenour stated that this sentence is imposed “with a heavy emphasis on the defendant’s decision to involve juveniles” in criminal activity.

            “This defendant not only terrorized tellers across our state, he recruited and trained teen-agers to continue his crime spree,” said U.S. Attorney Annette L. Hayes.  “His willingness to draw young people into these bank robberies makes this a particularly despicable crime”

            ADAMS pleaded guilty to one count of conspiracy to commit bank robbery and ten individual counts of bank robbery.  According to records filed in the case ADAMS robbed the following banks by handing a teller a threatening note demanding various amounts of cash: Chase Bank on Auburn Way in Auburn, Washington on March 3, 2014; Banner Bank on East Mission Street in Spokane, Washington on March 10, 2014; Chase Bank on 272nd Street in Covington, Washington on March 13, 2014; Chase Bank on 108th SE in Renton, Washington on March 19, 2014; Wells Fargo Bank on Gravelly Lake Dr. SW in Tacoma, Washington on March 24, 2014, and Chase Bank on S. 19th Street in Tacoma on March 31, 2014.

            After the March 2014 bank robberies, ADAMS recruited others to his scheme and is convicted in connection with four other bank robberies where juveniles went into the banks with notes demanding money and threatening harm to the tellers.  These robberies include the April 1, 2014 robbery of Chase Bank on Pacific Avenue in Tacoma; the April 7, 2014 robbery of US Bank on 176th St., Puyallup, Washington; the April 9, 2014 robberies of Alaska Federal Credit Union branches in Renton and Kent, Washington; the April 9, 2014 robbery of US Bank on Pacific Highway in Des Moines, Washington; the April 10, 2014 robbery of Wells Fargo on 72nd Street East, Tacoma; the April 11, 2014 robbery of BECU on Pacific Highway South, Kent, and the April 11, 2014 robbery of Bank of America on SW 336th St., Federal Way, Washington.

            Finally, ADAMS teamed up with co-defendant Vincent G. Thompson to rob Chase Bank, on Canyon Road East in Puyallup on April 14, 2014.  The final robbery in the spree was on April 21, 2014.  Following the robbery of US Bank on Pacific Highway South in Des Moines, investigators were able to locate ADAMS at a nearby motel and arrest him.

           “Bank robbers who commit their crimes across multiple jurisdictions might never face justice if not for the coordination of partners,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle Division.  “The FBI’s Seattle Safe Streets Task Force and its partners throughout the state shared information at every step of this investigation, which allowed us to determine connections between bank robberies and identify everyone involved.”

            The case was investigated by the FBI’s Seattle Safe Streets Task Force with assistance from multiple local police departments and the Washington State Department of Corrections.

            The case was prosecuted by Special Assistant United States Attorney Stephen Hobbs.  Mr. Hobbs is a Senior Deputy King County prosecutor specially designated to prosecute cases in federal court.

          A Chinese citizen illegally in the United States was sentenced today in U.S. District Court in Seattle to three years in prison for smuggling firearms, firearms parts and ammunition out of the United States without the proper export control licenses, announced U.S. Attorney Annette L. Hayes.  YONG GUO, 45, pleaded guilty in February 2015, admitting that between August 2012 and June 2014, he illegally purchased firearms, firearms parts and ammunition and sold and shipped them to people in Hong Kong and China.  GUO shipped about 80 packages using false names and addresses from various post offices in King and Pierce Counties.  At sentencing Chief Judge Marsha J. Pechman said “This was a particularly egregious offense… It was not a single act but an ongoing, calculating plan to engage in criminal activity.”

            “Illicit firearms trafficking fuels crime and conflicts around the world,” said United States Attorney Annette L. Hayes.  “I commend the work of Homeland Security Investigations, with the cooperation of our international partners, to uncover this kind of wrongdoing and ensure dangerous weapons do not end up in the wrong hands.”

           In two instances described in the plea agreement, in May 2014, GUO shipped ten .22 caliber rifle bolt assemblies to a contact in Hong Kong.  A few weeks later, GUO shipped numerous other parts for .22 caliber rifles.  Both packages had been labeled to contain fictitious items such as “steel blocks,” “toy parts,” and a “canvas bag.”  Both packages were seized by law enforcement.

            “Exporting restricted items, such firearms components and ammunition, without the permission of the U.S. government, is a crime.” said Brad Bench, special agent in charge of Homeland Security Investigations in Seattle. “Mr. Guo knew this and made attempts to evade detection by falsifying export documents, nonetheless his scheme was detected by law enforcement. Stemming the illicit export of firearms, arms components and other sensitive military technology is a high priority for HSI.”

            This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) with the assistance of the U.S. Postal Inspection Service, U.S. Customs and Border Protection’s National Targeting Center, the Hong Kong Police Force, and the Hong Kong Customs and Excise Department.

            The case was prosecuted by Assistant United States Attorney Todd Greenberg.

The father and two sons who led a Pierce County based drug trafficking ring that distributed methamphetamine and heroin were sentenced last week in U.S. District Court in Tacoma to long prison terms, announced Acting United States Attorney Annette L. Hayes.  LUIS HERNANDEZ, 60, of Tacoma was sentenced to ten years in prison.  His two sons, JUAN HERNANDEZ, 34, of Kent, Washington and JAIME HERNANDEZ, 29, of Tacoma were each sentenced to twelve years in prison.  At the sentencing hearing U.S. District Judge Ronald B. Leighton noted that heroin and meth destroys lives, saying this family group had “worked mightily to destroy other families.”

            “Through the course of this case, law enforcement took more than 66 pounds of crystal meth and more than two and a half pounds of heroin off the streets,” said Acting United States Attorney Annette L. Hayes.  “The defendants prepared these drugs for distribution in a lab that was fed by the misery and suffering of the addicted and their communities.  DEA and their state and local partners should be commended for their work on this case.”

            The Drug Enforcement Administration led this wire-tap investigation which uncovered a conversion lab in Spanaway, Washington where liquid meth was processed into highly addictive crystal methamphetamine.  The conversion of liquid meth to crystal meth is a potentially dangerous process involving highly flammable chemicals such as acetone.  In all fifteen people were charged in connection with this drug distribution ring, and all have entered guilty pleas.

            “The leaders of this trafficking group contributed to the methamphetamine and heroin addiction in the Pacific NW,” said DEA Special Agent in Charge Douglas James.  “It is clear that the members of this group had no regard for the safety of the community as they operated a methamphetamine conversion lab involving extremely dangerous and flammable chemicals.  Methamphetamine and heroin continue to be the top drug threats in the region and DEA will continue to work with our federal, state and local counterparts to address these threats.” 

            This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.  This investigation was led by DEA Tacoma in conjunction with Tahoma Narcotics Enforcement Team, Lakewood Police Department, West Sound Narcotics Team, and Pierce County Sheriff’s Office.

            The case is being prosecuted by Assistant United States Attorneys Lisca Borichewski, Brian Werner and Marci Ellsworth.

A 33-year-old Auburn, Washington man was sentenced today in U.S. District Court in Seattle to 92 months in prison for two counts of human trafficking, announced Acting U.S. Attorney Annette L. Hayes.  JOHN HENRY CYPRIAN, JR., aka “Lucky,” was arrested in June 2014 following a Bellevue Police Department investigation into CYPRIAN’s sex trafficking of two women in Western Washington and Portland, Oregon.  CYPRIAN pleaded guilty to two counts of human trafficking on December 15, 2014.  At the sentencing hearing U.S. District Judge Robert S. Lasnik imposed three years of supervised release and required CYPRIAN to register as a sex offender.

“This defendant used fear, false promises, and addictive drugs to exploit young, troubled women,” said Acting United States Attorney Annette L. Hayes.  “He viewed his victims as nothing more than objects that existed to satisfy his sexual and material needs.  This kind of conduct in our communities will not be tolerated and will continue to be the target of our coordinated law enforcement response.”

According to records in the case, between April 2013 and his arrest in June 2014, CYPRIAN rented hotel rooms throughout the greater Seattle area as part of his prostitution scheme.  CYPRIAN forced the two women to work as prostitutes at hotels in SeaTac, Bellevue, Everett, Mountlake Terrace, and Portland.  CYPRIAN posted ads on Backpage.com and other adult sexual services websites.  CYPRIAN controlled the women with beatings and threats, and forced them to give him all the money they earned.  At sentencing CYPRIAN was ordered to pay the women a total of $161,700 representing the ill-gotten gains he acquired by exploiting them.

“I’m very proud of the hard work of the detectives assigned to the Bellevue Police Department’s VICE unit.  Their dedication to duty and commitment to this victim ensured that this violent predator will remain behind bars for many years,” said Bellevue Police Chief Steve Mylett.  “This case highlights the fact that human trafficking is a reprehensible crime and that law enforcement will combine all of its resources to identify and protect victims of human trafficking as we bring those who prey on the vulnerable to justice.  I want to thank the FBI, the U.S. Attorney’s Office, the King County Prosecuting Attorney’s Office, and the Mountlake Terrace Police Department for their partnership and support.”

The case was investigated by the Bellevue Police Department with assistance from the King County Prosecuting Attorney’s Office, the Mountlake Terrace Police Department and the FBI. The case was prosecuted by Assistant United States Attorney Kate Crisham and Trial Attorney Victor Boutros with the Civil Rights Division of the U.S. Department of Justice.

The final three defendants in an Olympic Peninsula drug distribution ring were sentenced to prison today for their roles in a conspiracy to distribute methamphetamine in and around Port Angeles and Sequim, Washington, announced Acting United States Attorney Annette L. Hayes. The group’s criminal activity centered around the ‘Sellin Style’ car dealership near Sequim. The former owner of the dealership, Timothy P. Smith, was sentenced earlier this month to 11 years in prison. Today in U.S. District Court in Tacoma, HOLLI A. BELL, 35, of Port Angeles was sentenced to five years in prison for her involvement in two different criminal schemes involving distribution of methamphetamine. At the sentencing hearing today U.S. District Judge Robert J. Bryan noted that the amount of drugs distributed in this case was so large that long prison terms were needed to protect the public and deter other criminal conduct. Two other co-conspirators were sentenced this week by Judge Bryan. JACOB E. DAVIS, 26, of Port Angeles, was sentenced today to three years in prison for his role as a methamphetamine distributor. And yesterday, Judge Bryan sentenced CHARLES D. ASLIN, 40, of Sequim, to five and a half years in prison for his methamphetamine distribution. Law enforcement moved in to arrest members of the drug distribution ring in February 2014. Lead defendant Timothy Smith was arrested following a high speed chase. During that same time period, law enforcement targeted and arrested a second drug ring in the Tacoma area that was supplying methamphetamine to Smith’s organization. The case was investigated by the FBI, ATF, and Olympic Peninsula Narcotics Enforcement Team (OPNET), a task force containing officers from Clallam County Sheriff’s Office, Jefferson County Sheriff’s Office, Port Angeles Police Department, Sequim Police Department, Neah Bay Department of Public Safety, Elwha Klallam Police, LaPush Police, the U.S. Coast Guard, U.S. Border Patrol, the Washington Department of Corrections, Washington State Patrol and the West Sound Narcotics Enforcement Team (WestNet). The case was prosecuted by Assistant United States Attorney Gregory A. Gruber

            A four-month undercover law enforcement operation is culminating this week with state and federal arrests of more than 95 defendants whose drug dealing and related criminal activity has plagued downtown Seattle, announced Acting U.S. Attorney Annette L. Hayes.  The Seattle Police Department, FBI, King County Prosecutors Office, and the U.S. Attorney’s Office are coordinating a strategy aimed at removing what has become an open air drug market at Pike/Pine and Third Avenue in downtown Seattle.  Thirty-seven people have been indicted federally –primarily those drug dealers with the most serious criminal histories.  The defendants will appear in U.S. District Court in Seattle over the next few days.

            “This operation is about much more than locking up offenders.  It is about taking back a key part of our city by addressing the range of factors that allowed it to become a one-stop shop for drugs,” said Acting U.S. Attorney Annette L. Hayes.  “We are pleased to be working closely with the City and our federal and local law enforcement partners who all bring important tools to bear to this problem.  In our case, we will be asking judges to ban these offenders from coming back to the Pike/Pine area and will hold those who do to account, so that we can return the area to everyone who lives, works and visits our great city.”

            The detention motions filed in the federal cases detail the crime problem in the Pike/Pine corridor.  In 2014, there were over ten thousand calls for police service in this area alone – an average of twenty-seven calls per day.  Four of the seven most dangerous blocks in the entire city fall within this area, as measured by the number of violent crimes.  For a three-year period beginning near the end of 2010, there were over 500 violent crimes that occurred on these blocks.  Although not all of the violence is directly linked to the drug trade, the open drug market in the area has contributed to a sense of lawlessness, and appears to have brought a number of people to the area with serious criminal histories.  Some of the violent incidents include:  the March 2015 shooting of a man at 3rd and Pine resulting in serious injuries; the January 2015, shooting of a sixteen-year-old and a twenty-five-year old when more than a dozen shots were fired near Third Avenue and Pine Street; robberies and beatings of citizens in summer 2013; and the March 2013, injury to a twenty-three-year-old woman who was walking just outside of Pike Place Market and was hit by a stray bullet.

            “The FBI partners regularly with the SPD Major Crimes Task Force in stopping individuals who violate the law and endanger our community,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle Division.  “In this operation, it was our intent to make an immediate, positive impact on a drug market operating brazenly in the heart of our city.”

            “The successful operations this week underscore the value of collaborative enforcement efforts with our Federal and regional partners,” said Chief Kathleen O’Toole.  “We will continue our collective efforts to promote safe and healthy neighborhoods, Downtown and throughout the City.”

            Defendants who have been charged federally sold a wide array of drugs in the Pike/Pine area.  Undercover officers bought heroin, cocaine, methamphetamine, prescription drugs and marijuana from offenders whose criminal histories include convictions for attempted rape, robbery, burglary, assault, drug trafficking and illegal use and possession of firearms.

            “Seattle residents and visitors should not be forced to navigate a dangerous open-air drug market between the downtown retail core and Pike Place Market,” said Mayor Murray.  “Our comprehensive nine-and-a-half block strategy will help break the cycle of addiction by expanding LEAD diversions, while removing violent repeat offenders from our streets.  My thanks to the men and women of Seattle Police Department, as well as our federal and local law enforcement partners, for their success in one of the largest criminal investigations in Seattle history.”

            “Downtown Seattle is a regional jewel that belongs to all of us,” said King County Prosecutor Dan Satterberg.  “Drug dealing, and the misery, violence and crime that follows in its wake, has no place in our downtown.  We will shut it down with every tool we have.”

            “Legalizing and regulating marijuana and using harm reduction tools to address hard drug addiction does not mean standing by as the heart of our downtown continues for years to house a large-scale, outdoor market for illegal drug sales,” said City Attorney Pete Holmes.  “Smarter public policies on drugs never meant that we have to accept open-air drug markets.  The approach we’re taking today is an effort to strike the balance necessary to enforce the law and clean up downtown without falling back into the wasteful and counterproductive cycle of the War on Drugs.”

            This initiative is jointly led by the Seattle Police Department and the FBI.  The federal cases are being prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.  The King County prosecutions are being coordinated by Senior Deputy Prosecutor Mary Barbosa.

            The U.S. Department of Justice and Loren and Holland Cohen have entered into a settlement agreement to remedy alleged violations of the federal Servicemembers Civil Relief Act (SCRA), announced Acting U.S. Attorney Annette L. Hayes.  The U.S. Attorney’s Office for the Western District of Washington began its investigation after receiving a complaint from Joint Base Lewis-McChord’s (JBLM) Main Legal Assistance Office, alleging that the Cohens violated the SCRA when (1) they refused to return a ($2,150.00) security deposit to their tenants, S.Sgt. Marquis Bines, United States Army, and T.Sgt. Meoisha Bines, United States Air Force, and (2) they demanded all remaining rental payments due under the lease in the amount of $10,750.00, rather than permitting the Bines to terminate their lease several months early and receive their full deposit, as was their right under the SCRA, when they unexpectedly were transferred from JBLM to Shaw Air Force Base in South Carolina.

          “The law provides that landlords have a legal obligation to ensure servicemembers can move freely when military duty demands it,” said Acting U.S. Attorney Annette L. Hayes.  “Just as our dedicated men and women of the military protect our freedoms overseas, we must protect their interests here at home.  The U.S. Attorney’s Office is committed to protecting the housing rights of those who secure the rights of all Americans.”

          Under the settlement reached Monday, the Cohens admitted no violation of the law, but agreed to: (1) abide by policies and procedures that ensure that servicemembers who rent the Cohen’s property will be aware, and ensured of their rights under the SCRA; (2) promptly report any servicemember complaints to the United States Attorney’s Office; (3) dismiss their claim for over $10,000.00, brought in Pierce County District Court against the Bines; and (4) pay the Bines $4,000 for their deposit and other financial hardship the Bines suffered.

          The Bines entered into a one-year lease to rent the Cohens’ condominium, located in Tacoma, Washington, while they served their country at JBLM.  Approximately six months into the lease, the Bines received permanent change of station (PCS) orders from their respective branches and sought, as was their right under the SCRA, to terminate the lease and receive their security deposit.  The Cohens claimed that the Bines had not complied with the SCRA’s technical notice of termination provisions and also withheld the security deposit, claiming that the “damage” to the property was ten (10) times the original estimate made during the Bines’ walkthrough.  JBLM attorneys advised the Cohens that their interpretation of the SCRA was incorrect and that the calculation of the charges against the deposit was excessive.  Ignoring this, the Cohens then claimed that the Bines were in breach of the lease and that the entire remaining balance due under the lease was thereby “accelerated,” in an amount over $10,000.  Following a thorough investigation, the U.S. Attorney’s Office concluded that the Cohens unreasonably refused to return the security deposit and that the Cohens illegally demanded further rental payments from the Bines.  The Cohens fully cooperated with the United States Attorney’s Office’s investigation and settlement of this matter.

          The SCRA provides certain protections to active duty servicemembers who must terminate residential leases to comply with military orders for a permanent change of station or for deployment.  Servicemembers who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office.  Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.  Interested persons, including landlords, may find additional information about the SCRA and the Justice Department’s enforcement of that law, and other laws protecting servicemembers, at www.servicemembers.gov.

          This matter was handled by Assistant United States Attorney and Civil Rights Program Coordinator J. Michael Diaz in the U.S. Attorney’s Office for the Western District of Washington, in collaboration with Housing and Civil Section of the Civil Rights Division of the Justice Department.

            nLight Photonics, Inc. (nLight), a privately-held, Vancouver, Washington-based manufacturer of high performance diode and fiber lasers has agreed to pay $420,000 to resolve allegations that between 2004 and 2013, in violation of the False Claims Act, nLight received multiple government grants and contracts for which it did not legitimately qualify, announced Acting U.S. Attorney Annette L. Hayes.  A joint investigation by Inspectors General for several of the impacted government agencies and other federal law enforcement agencies confirmed that nLight did not qualify for the government funding it received because of its ownership structure.

 

            The investigation revealed that nLight successfully pursued funding under the Small Business Innovation Research (SBIR) program from the Army, Navy, Air Force, NASA and Department of Energy to further develop its laser technology, which has military and related applications of interest to various government agencies.  During the relevant time period, firms seeking SBIR program funding were required, among other things, to be owned and controlled at least 51 percent by individuals or by another business concern that itself was owned and controlled at least 51 percent by individuals.  Despite numerous certifications to government agencies that it was SBIR program-eligible, nLight was more than 51 percent owned by multiple businesses, including several venture capital firms, rendering it ineligible, during the period covered by today’s settlement, for the government funding it received.

            “There is no tolerance for false certifications when asserting eligibility to participate in SBA programs,” said Inspector General Peggy E. Gustafson of the U.S. Small Business Administration (SBA).  “I want to thank the U.S. Department of Justice for its dedication to reaching a settlement in this case.”

            “The Department of Energy endeavors to provide contracts and grants to deserving small businesses that are eligible to participate in SBA’s Small Business Innovation Research and Small Business Technology Transfer programs,” said Inspector General Gregory H. Friedman.  “Entities that falsely certify their eligibility corrupt the process.  This joint investigation, which required cooperation among several agencies, demonstrates the government’s strong commitment to ensuring the integrity of the contracting and grant underwriting process.”

            “This settlement is proof of the great work our agents do every day,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “This company tried to take advantage of a system in place to help small business, but our agents, with the help of our law enforcement partners, uncovered their contrivance.”

            nLight initially flagged its ineligibility for the SBIR program in response to a request for information by an alert Department of Energy contracting officer overseeing both an nLight SBIR grant as well as an SBIR grant awarded to a company that nLight had acquired.

            The claims resolved by today’s settlement are allegations only, and there has been no determination of nLight’s legal liability for the conduct at issue.  Further, there is no indication that nLight did not adequately perform the contracts and grants it was ineligible to receive.

            This matter was investigated by the SBA’s Office of Inspector General, the Department of Energy Office of Inspector General, the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the Army Criminal Investigation Command, the Naval Criminal Investigative Service and the NASA Office of Inspector General, with the assistance of the Defense Contract Audit Agency.

            The settlement was negotiated by Assistant U.S. Attorney Harold Malkin.  Mr. Malkin heads the Affirmative Civil Enforcement section of the U.S. Attorney’s Office, Western District of Washington.  The Department of Justice Civil Division’s Commercial Litigation Branch assisted in this matter.

            Federal, state and local law enforcement partners made 18 arrests and searched more than a dozen locations in connection with a two year investigation into a violent drug trafficking organization, announced Acting U.S. Attorney Annette L. Hayes.  The organization distributed cocaine, heroin and methamphetamine across a wide swath of the greater Seattle metro area.  The defendants are scheduled to appear in U.S. District Court in Seattle at 2:00 today.

            “These defendants preyed on our community by supplying drugs in neighborhoods across Seattle, and demonstrated a willingness to use violence where it served their purposes,” said Acting U.S. Attorney Annette L. Hayes.  “Their criminal activities included hiding weapons and using violence in homeless encampments located along Interstate-5.”

            According to the indictment and court records, beginning in February 2013 law enforcement authorities used a variety of tools including telephone wire taps and confidential sources to infiltrate and interdict this drug organization.  The investigation determined that the organization distributed approximately 15-20 kilos of cocaine, 10-15 kilos of heroin and 5 kilos of methamphetamine per month. In addition, on multiple occasions members of the drug trafficking organization were arrested with firearms.  In one instance a conspirator was arrested with a stolen firearm as he was leaving the ‘Jungle’ homeless encampment.  During the investigation law enforcement seized drugs and cash including a September 2014 seizure of two kilograms of cocaine, one pound of methamphetamine and $14,000 cash from a rental car.  In March 2015, investigators seized more than $32,000 from a hidden compartment in another vehicle.

            Drug activity associated with the organization occurred over a wide geographic area with drug sales occurring at homes and near businesses in Seattle, Renton, Shoreline and Kent.  The drug transactions occurred in areas ranging from the parking lot of Viet Wah supermarket near South Jackson Street, the parking lot of Dick’s Drive-In on NE 45th Street, the parking lot of a gas station on Beacon Hill, and at a motel in Tukwila.

            “Law enforcement partnerships made today’s operation a success,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle division.  “Working together in task forces, we tracked these defendants on both sides of Lake Washington, up and down Interstate 5, and even to other states.  Our joint resources enabled us to identify key elements of the organization and effectively shut it down.”

            “This operation was the result of close cooperation and collaboration between several Federal, State, and Local law enforcement agencies and prosecutors, including investigators from the Eastside Narcotics Task Force and the FBI’s Safe Streets Task Force,” said Bellevue Police Chief Steve Mylett.  “I am very proud of the hard work of these dedicated law enforcement professionals.  As a result of this large scale operation, a well-organized drug trafficking operation has effectively been dismantled, and the entire Puget Sound region is safer.”

            Those arrested on the indictment today include:

Son V. Tran, 28, of Seattle, Washington

Cuong T. Le, 57, of Federal Way, Washington    

Niem H. Doan, aka “Linh,” 36, of Everett, Washington
Huy V. Tran, 39, of Seattle, Washington
Patrick Wong, aka “Minh” 48, of Seattle, Washington
Son T. Nguyen, aka “Nine Fingers” aka “Kim,” 42, of Seattle, Washington
Tam C. Nguyen, aka “Andy,” 39, of Tukwila, Washington
Brieanna K. Carlson, 27, of Seattle, Washington
Yen T. Vu, 54, of Seattle, Washington
Phuong A. Nguyen, aka “P,” 42, of Kent, Washington

Vinh Q. Nguyen, 29, of Seattle, Washington
Giang T. Ngo, aka “Uncle Jack,” 51, of Burien, Washington
Phuong H. Nguyen, aka “LJ,” 30, of Kent, Washington
Kenneth W. Thomas, 55, of SeaTac, Washington
Donald K. Jordan, aka “Looney,” 34, of Seattle, Washington
Donald C. Scholoff, 47, of Edmonds, Washington
Steven J. Connell, 47, of Seattle, Washington
Kimberle S. Alojasin, aka “Nguyen,” 56, of South King County, Washington

This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.  This investigation was led by the FBI’s Seattle Safe Streets Task Force (SSTF) and Bellevue Police Department’s Eastside Narcotics Task Force (ENTF). The SSTF includes task force officers from the Seattle Police Department, and the ENTF is composed of Bellevue Police Department officers, and agents and officers from the Washington State Patrol, US Postal Inspection Service, and the Redmond, Kirkland, and Mercer Island police departments in partnership with the King County Prosecuting Attorney’s Office. Additional assistance was provided by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Drug Enforcement Administration (DEA) and ICE’s Homeland Security Investigations (HSI), King County Sheriff’s Office, the Washington State Department of Corrections, and the Kent and Tukwila police departments, and the Seattle Fire Department.

The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and Jeffrey Backhus.

          A federal grand jury has indicted three people in connection with hash oil manufacturing that endangered young children, announced Acting United States Attorney Annette L. Hayes.  Police and fire personnel responded to the homes in south Seattle and in Maple Valley after citizens expressed concern about the children in the homes.  Investigating officers discovered hash oil manufacturing operations with highly explosive butane gas in the basement of each home, in one case, directly under the bedroom of the young children who live there.  All three defendants will appear in U.S. District Court in Seattle.

            In the south Seattle incident, JESSE RUSSELL DAVISSON, 36, has been charged with Endangering Human Life while Manufacturing a Controlled Substance, Maintaining a Drug Involved Premises and Manufacturing Hash Oil and Marijuana.  Police reports indicate officers were called to the home on July 1, 2014, to check on the welfare of three children ages 13, 11 and 8.  In the basement officers found a hash oil manufacturing operation with cans of butane scattered on the floor.  Seattle Fire was called in to make sure any explosive gas was vented and ignition sources were disconnected.  DAVISSON was arrested today and will make his initial appearance at 2:00 in U.S. District Court in Seattle.

            In the second case, JOSHUA MATTHEW MAUK, 38, and DEBORAH ELIZABETH BRECHLER, 52, are charged with Endangering Human Life While Manufacturing Controlled Substances, Maintaining a Drug Involved Premises, and Manufacturing Hash Oil and Marijuana.  On July 27, 2014, the King County Sheriff’s Office was called on to check on the welfare of two children at a home in Maple Valley.  Due to evidence and information provided by a member of the public, the officers obtained a court authorized search warrant and responded with a bomb disposal unit.  Officers located a homemade hash oil lab that used explosive solvents directly under the bedroom where two young children were sleeping.  The couple operated a business dubbed “Home Blown Concentrates.”  The lab was dismantled and the couple was charged in King County Superior court.  Those charges will be dismissed with the filing of federal charges.  MAUK and BRESCHLER will appear for arraignment on April 30, 2015.

            Endangering Human Life While Manufacturing Controlled Substances is punishable by up to ten years in prison and three years of supervised release; Maintaining a Drug Involved Premises is punishable by up to 20 years in prison and three years of supervised release and Manufacturing Hash Oil and Marijuana is punishable by up to five years in prison and three years of supervised release.

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

          The cases were investigated by the Seattle Police Department and the King County Sheriff’s Office.  The King County Prosecutors Office provided substantial assistance on these cases.  The cases are being prosecuted by Assistant United States Attorneys Todd Greenberg and Vince Lombardi.

            A U.S. Grand Jury in Seattle has returned a ten count indictment against TROY X. KELLEY, 50, of Tacoma for his scheme to keep stolen money and hide it from both the IRS and those due a refund related to their purchase of a home or refinance of a home mortgage, announced Acting U.S. Attorney Annette L. Hayes.  KELLEY currently serves as the elected Washington State Auditor.  The majority of the criminal conduct detailed in the indictment spans years prior to KELLEY’s election to statewide office.  However, some of the criminal conduct detailed in the indictment occurred following his election.  KELLEY is scheduled to appear in U.S. District Court in Tacoma at 2:30 today.

            “Mr. Kelley spun a web of lies in an effort to avoid paying his taxes and keep more than a million dollars that he knew did not belong to him, but instead should have been returned to thousands of homeowners across this state,” said Acting U.S. Attorney Annette L. Hayes.  “I commend the FBI and the Internal Revenue Service Criminal Investigation for their diligent work to piece together the voluminous records that form the basis for the charges in this case.”

            According to the indictment, between 2003 and 2008, KELLEY operated a business that was paid by real estate title companies to track documents related to real estate sales and refinancings.  KELLEY had agreements with those companies for the fees he could charge in connection with the document-tracking work.  While the title companies withheld $100-$150 on each loan to pay the fee, the bulk of the money was to be returned to the borrower with KELLEY’s company being paid $15- $20 per transaction.  However, the indictment alleges, in most cases, KELLEY kept the entire amount withheld on each loan resulting in more than $2 million in stolen money.  This conduct is the basis for count one of the indictment:  Possession and concealment of stolen property.  When the amount withheld by title companies became the subject of civil litigation, the indictment alleges KELLEY obstructed the litigation, repeatedly lying in a declaration and in depositions while under oath.  For this conduct KELLEY is charged with four counts of false declarations and one count of attempted obstruction of a civil lawsuit.  Further, the indictment alleges KELLEY failed to pay federal taxes and obstructed the IRS in its efforts to collect taxes from him.  He is charged with corrupt interference with Internal Revenue laws and two counts of filing false income tax returns.  Finally, KELLEY is charged with making false statements to Internal Revenue Service agents who questioned him about his scheme in April 2013.

          “Today’s action demonstrates our collective efforts to enforce the law,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation.  “IRS CI is committed to unraveling the complex financial transactions individuals might use to attempt to conceal their taxable income.  To build faith in our tax system, honest taxpayers must be confident that everyone is paying their fair share.”

          “The public deserves integrity and honesty from elected officials,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle Division.  “For that reason, identifying and investigating public corruption is a top priority for the FBI.”

            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.

            Possession and concealment of stolen property is punishable by up to ten years in prison.  Attempted obstruction of civil litigation is punishable by up to twenty years in prison.  False declarations and false statements are punishable by up to five years in prison.  The remaining charges are punishable by up to three years in prison.

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

            The case is being prosecuted by Assistant United States Attorneys Arlen Storm, Kathryn Frierson and Andrew Friedman.

WASHINGTON – U.S. District Judge James L. Robart today approved a department-wide training program developed by the Seattle Police Department (SPD) and endorsed by the Justice Department, the Seattle City Attorney’s Office and the Federal Court Monitor Merrick Bobb, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and Acting U.S. Attorney Annette L. Hayes of the Western District of Washington.  The training is a key requirement of the 2012 consent decree entered by the city and the Justice Department to address a pattern and practice of excessive use of force by SPD officers.

All 1,300 sworn officers of the SPD will be trained in tactical de-escalation skills and strategies through the newly approved program.  The goal of the training is to teach SPD officers that tactical de-escalation is more than a set of specific skills but also an overarching approach to incident resolution and community policing.  De-escalation more broadly refers to the strategic slowing down of an incident in a manner that allows officers more time, distance, space and tactical flexibility during dynamic situations on the street.  Applying these specific skills increases the potential for resolving the situation with minimized force or no force at all, which reduces the likelihood of injury to the public, increases officer safety and mitigates the immediacy of potential or ongoing threats.  A reduction in use of force incidents also reduces community complaints, promotes the perception of procedural justice and, most importantly, promotes resolution of events with the public’s compliance.

The 2015 tactical de-escalation training builds upon training that officers received for the first time in 2014.  Tactical de-escalation training has and will be woven into every aspect of more specific technical training that SPD officers will receive throughout the year, including firearms, individual and team defensive tactics and more.

            As the Federal Court Monitor Bobb stated in his filing memo with the court:

For some time, many Seattle residents, like others throughout the country, have suggested that officers receive training on how to de-escalate situations in order to reduce the potential for force needing to be contemplated.  However, in many instances, the concept of “de-escalation” has tended to be imprecisely defined and served as a kind of “catch-all” term or approach used to refer to anything that might defuse difficult police encounters.  Clear and precise training on what de-escalation means in Seattle began in earnest last year.  This year’s training will deepen officers’ understandings of how de-escalation is strategic, tactical, and valuable both to officers and the communities that they serve.  By providing clear detail and real-world techniques that officers can apply immediately in the field, it puts substantial “meat on the bones” of what “de-escalation” is in its full scope and how, when, and why such techniques should be used.  This training is a notable step forward.

“De-escalation tactics are essential skills for police officers and departments both to help to ensure constitutional policing and to improve public safety and officer safety,” said Principal Deputy Assistant Attorney General Gupta.  “Force must be both reasonable and necessary, and this training will provide valuable guidance to officers when they make split-second decisions about when and how to use force.  As the Seattle Police Department implements this training, it is taking a vital step forward toward compliance with the consent decree.”

“Tactical de-escalation goes to the heart of the consent decree,” said Acting U.S. Attorney Annette L. Hayes.  “Training in these skills will give officers the tools they need to avoid, mitigate, or minimize force encounters.  When put to use, these skills keep both officers and the individuals they encounter safer, allowing officers to focus on their primary mission – service to their community.”

Judge Robart approved the consent decree in August 2012.  The Justice Department and the city of Seattle jointly selected and the court approved the monitor in October 2012.

A 36-year-old Monroe, Washington man who burglarized a Fred Meyer store stealing 29 firearms and selling them to criminals was sentenced today in U.S. District Court in Seattle to ten years in prison, announced Acting U.S. Attorney Annette L. Hayes.  MATTHEW ELSHAUG pleaded guilty in October 2014 to Conspiracy to Possess and Sell Stolen Firearms, Possession and Sale of Stolen Firearms, Theft of Firearms from a Federal Firearms Licensee, and being a Felon in Possession of Firearms.  U.S. District Judge Robert S. Lasnik ordered three years of supervised release to follow the prison term and recommended a residential drug treatment program while ELSHAUG is incarcerated.

According to records filed in the case, in the early morning hours of November 17, 2013, ELSHAUG burglarized the Snohomish Fred Meyer store, using a crowbar to steal 29 firearms from the gun case.  ELSHAUG, accompanied by his then-roommate Casey Yount, 27, then sold the guns to two other defendants for money and drugs.  Yount was sentenced last December to three years in prison for Conspiracy to Receive, Possess, Barter, and Sell Stolen Firearms.  Levi Herz, 31, of Everett, Washington, bought nine of the stolen guns and was sentenced last November to 54 months in prison for Possession and Sale of Stolen Firearms and Distribution of Controlled Substances.  Raymond Baron, 53, of Marysville, Washington also bought some of the stolen guns.  He was sentenced last January to five years in prison for Possession and Sale of Stolen Firearms and possession of an unregistered firearm.  Of the 29 stolen guns, only nine have been recovered by law enforcement.

ELSHAUG has prior convictions in Snohomish County for burglary, theft, and illegal firearms possession.  Yount has prior convictions in Snohomish County for theft and drug crimes.  Herz has prior convictions in Snohomish County for drug crimes.

The case was investigated by the Snohomish Police Department, the Snohomish County Sheriff’s Department, the Marysville Police Department, the Everett Police Department, the Washington State Department of Corrections, the Snohomish Fugitive Task Force, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The Snohomish County Prosecuting Attorney’s Office worked closely with the U.S. Attorney’s Office and law enforcement on the case.

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

          The former owner of ‘Sellin Style’ car dealership in Sequim, Washington, was sentenced today in U.S. District Court in Tacoma to 11 years in prison and five years of supervised release for conspiracy to distribute methamphetamine and possession of methamphetamine with intent to distribute, announced Acting United States Attorney Annette L. Hayes.  TIMOTHY P. SMITH, 31, pleaded guilty in January 2015.  SMITH was arrested in February 2014, following a high speed chase that ended after two sets of spike strips were placed on the highway.  At sentencing U.S. District Judge Robert J. Bryan said SMITH was the organizer of an “ongoing, long-term, large conspiracy” involving “weapons and violent undertones.”

            “This defendant was a menace in his community who spread methamphetamine and its attendant harm on the Olympic Peninsula,” said Acting United States Attorney Annette L. Hayes.  “The fact that this defendant has been held to account is a testament to effective coordination between federal, state and local law enforcement.”

          According to records in the case, SMITH was the leader of a longstanding methamphetamine distribution ring that supplied large quantities of the drug over several years.  SMITH sold methamphetamine to a person working with law enforcement on multiple occasions in June, July and August 2013 at or near his ‘Sellin Style’ car dealership on Old Blyn Highway near Sequim.  SMITH also possessed and sold methamphetamine at other locations in and around Port Angeles.  Law enforcement surveillance also revealed SMITH conducting drug deals with his suppliers at multiple locations in Kitsap County including the Four Corners Chevron and Hilltop gas stations in Poulsbo, the parking lot of the Walmart in Poulsbo, and the parking lot of the Target store in Silverdale.

          In conjunction with a separate investigation and take-down of another drug ring, which was supplying methamphetamine to SMITH and others, law enforcement arrested SMITH as he traveled back to Sequim from Kitsap County on Sunday evening, February 23, 2014.  Shortly after SMITH’s vehicle crossed the Hood Canal Bridge, the Washington State Patrol pulled the car over.  After initially stopping, SMITH sped away, traveling at speeds nearing 100 mph and weaving into the lane for oncoming traffic.  Troopers noticed white bags being tossed from the car.  The car hit one set of spike strips and continued on.  After hitting a second set of spike strips the car came to a halt and SMITH and his girlfriend were taken into custody.  Inside the bags tossed from the car, law enforcement found 1.6 pounds of methamphetamine.  The girlfriend also had $4,000 in cash on her person, which she revealed in a monitored jail call to have been given to her by SMITH during the police chase.

          One of SMITH’s co-conspirators, Tammy R. Coburn, was sentenced last month to 18 months in prison.  The other defendants, Holli A. Bell, Jacob E. Davis, and Charles D. Aslin, have also pleaded guilty in the case and are pending sentencing.

          The case was investigated by the FBI, ATF, and Olympic Peninsula Narcotics Enforcement Team (OPNET), a task force containing officers from Clallam County Sheriff’s Office, Jefferson County Sheriff’s Office, Port Angeles Police Department, Sequim Police Department, Neah Bay Department of Public Safety, Elwha Klallam Police, LaPush Police, the U.S. Coast Guard, U.S. Border Patrol, the Washington Department of Corrections, Washington State Patrol and the West Sound Narcotics Enforcement Team (WestNet).

          The case was prosecuted by Assistant United States Attorney Gregory A. Gruber.

            A 40-year-old Olympia, Washington man was convicted today of drug distribution and illegal firearms charges in U.S. District Court in Seattle, announced Acting United States Attorney Annette L. Hayes.  STEVEN ASIR THOMAS, was convicted of Conspiracy to Distribute Controlled Substances, Money Laundering, Conspiracy to Possess Firearms in Furtherance of a Drug Trafficking Crime and being a Felon in Possession of a Firearm following a six day jury trial.  The jury deliberated about one day before returning the guilty verdicts.  THOMAS faces a mandatory minimum ten years in prison and up to life in prison when sentenced by U.S. District Judge John C. Coughenour on June 29, 2015.

            According to records in the case and testimony at trial, THOMAS had owned various nightclubs in the Seattle area, and sought to open a new nightclub near the Seattle Center called “Ice Nightclub”.  THOMAS discussed his plans with a person working with law enforcement as well as with an undercover agent.  THOMAS claimed the club would be a cover to launder drug money, and would generate cash for additional drug purchases.  In October 2013, THOMAS worked to set up a drug deal trading methamphetamine for assault rifles.  On three other occasions, law enforcement seized drugs that were either delivered or ordered by THOMAS.  In October 2013, THOMAS picked up a pound of methamphetamine from a source and then “sold” it to an undercover agent in Portland, Oregon.  About a week later, another two pound load of methamphetamine was seized on a bus headed to Portland – the courier was bringing it to THOMAS.  Finally, in March 2014, THOMAS arranged another one pound sale in Portland of highly pure methamphetamine to an undercover agent.

            THOMAS used bank accounts set up in the name of ICE Nightclub to launder money he believed to be the proceeds of drug dealing.  Some of the money was provided to THOMAS by undercover agents acting as drug dealers.  The basic scheme was for purported drug dealers to give him cash disguised as an investment in the club.  Then THOMAS would write a check from ICE Nightclub accounts to an entity connected to the purported drug dealers to make it appear that the ICE Nightclub was paying for services rendered.  THOMAS collected a fee from the “drug dealers” for his conduct as well.

            Finally, on March 27, 2014, law enforcement executed a search warrant at THOMAS’s residence.  They found a loaded Glock 9 mm Model 19 firearm next to his bed.  Also in the residence was evidence of drug dealing including cocaine, 14 cell phones, scales, currency bands and  evidence of a previous marijuana grow.  THOMAS is prohibited from possessing guns due to a felony drug conviction in 2006 in Arkansas.

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 U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (HSI),  the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Seattle Police Department.

The case was prosecuted by Assistant United States Attorneys Jerrod Patterson, Lisca Borichewski and Nicholas Manheim.

The father of a teen who killed four students and himself last year at Marysville-Pilchuck High School was arrested today on charges that he illegally purchased the firearm used in the mass shooting, announced Acting United States Attorney Annette L. Hayes.  RAYMOND LEE FRYBERG, 42, is charged with unlawful possession of a firearm by a prohibited person in connection with the Beretta, model PX4 Storm, he purchased in January 2013.  At the time of the purchase FRYBERG was the subject of a permanent protection order that prohibits him from possessing firearms.  However, FRYBERG lied on forms at the time of the purchase stating he was not subject to a protection order.  In fact, just four months earlier, FRYBERG admitted in tribal court that he had violated the protective order and thus he knew that he was subject to its terms.  FRYBERG will appear in U.S. District Court in Seattle today, March 31, 2015, at 2:00 PM.

“Guns in the hands of people who have demonstrated they will use violence is a dangerous mix that is prohibited by law,” said Acting U.S. Attorney Annette L. Hayes.  “Our office has a long history of working with our federal, state, local and tribal law enforcement partners across Western Washington to prosecute those who illegally possess firearms.  This case is part of that effort and a reminder that we are united in our commitment to get firearms out of the hands of those who pose the greatest risk to our communities.” 

According to the criminal complaint filed in the case, in 2002, FRYBERG’s then-girlfriend asked the Tulalip Tribal Court for an order of protection alleging FRYBERG had recently threatened her and had in the past physically assaulted her by hitting, slapping and/or pulling her hair.  The protection order was made permanent in September 2002 and had no expiration date.  In September 2012, FRYBERG was back in tribal court and pleaded “no contest” to violating the protection order.  FRYBERG was fined and placed on probation for one year.  Less than four months later, FRYBERG went to Cabela’s Sporting Goods store on the Tulalip reservation and purchased the Beretta, and, over subsequent months, four other firearms.  FRYBERG filled out forms for the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) stating that he was not the subject of any court order restraining him from harassing, stalking, or threatening an intimate partner or the child of a partner.  The form states that anyone subject to such an order is prohibited from purchasing a firearm.  The complaint alleges FRYBERG lied when he filled out the form.

On October 24, 2014, FRYBERG’s son, 15-year-old Jaylen Fryberg, used the illegally purchased Beretta to kill four other students and himself at Marysville-Pilchuck High School in Marysville, Washington.  Fryberg’s cousin was critically injured but survived.

The case was investigated by the FBI, the Tulalip Tribal Police Department.  The case is being prosecuted by Assistant United States Attorneys Ye-Ting Woo and Bruce Miyake.

A Port Angeles man who collected nearly $200,000 by claiming his grandmother was still alive years after her death, was sentenced today in U.S. District Court in Tacoma to one year in prison and three years of supervised release, announced Acting United States Attorney Annette L. Hayes.  MORGAN MICHAEL HOPKINS, 43, pleaded guilty to Theft of Public Funds in connection with his scheme to collect and use survivor benefits owed to his grandmother.  At sentencing U.S. District Judge Ronald B. Leighton noted he had seen a number of similar theft cases.  “There’s got to be some residue that reverberates to the community at large - - both to the population that is tempted and the population that is angry about the unprovoked theft of taxpayer money,” Judge Leighton said.

            According to records filed in the case, after HOPKINS’ grandmother died in March of 2009, he forged official government documentation – claiming to be his grandmother – and requesting that her federal workers’ compensation death survivor benefits continue.  The United States Department of Labor had been paying workers’ compensation survivor benefits to the defendant’s grandmother following the death of her husband, a former federal employee, since about 1968.  When the defendant’s grandmother died, the Department of Labor terminated the benefits.  However, the defendant fraudulently submitted a sworn verification of benefits statement to the DOL in November of 2009 by forging his grandmother’s name and requesting that the benefits be continued.  As a result of receiving the falsified verification of benefits form, the DOL continued paying benefits to the defendant’s grandmother and ultimately paid $196,565 into her bank account after her death.  HOPKINS used his grandmother’s debit card and forged his grandmother’s signature on checks so that he could access the money and use it for his own purposes.

            In January 2014 the Department of Labor confirmed that HOPKINS’ grandmother had died five years earlier and terminated the payments.

            The case was investigated by the Department of Labor Office of Inspector General (DOL-OIG).  The case was prosecuted by Assistant United States Attorney Erin Wilson.