United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 29, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

Co-Defendant Pleaded Guilty to Racketeering Charges During Trial

 
SAN FRANCISCO – A federal jury today convicted Danilo Velasquez, aka “Triste,” a local leader of La Mara Salvatrucha, or MS-13, in federal court in San Francisco of racketeering conspiracy and related charges, announced U.S. Attorney Melinda Haag; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; and Clark Settles, Special Agent in Charge for U.S. Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Francisco. His co-defendant and fellow MS-13 member, Luis Herrera, aka “Killer,” pleaded guilty to related charges, including using a firearm that caused the murder of an individual.
 
After a four-week trial, the federal jury convicted Velasquez of all charges, including conspiracy to participate in a racketeering enterprise, conspiracy to commit murder in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and using and discharging a firearm in connection with a crime of violence. The evidence presented during trial showed that the defendants were part of the violent, transnational gang known as MS-13, which claimed part of the Mission District of San Francisco as its territory and operated in the Bay Area since the 1990s. Since its inception, MS-13 members have warred with rival gang members and sought to extort payments from other criminals in the gang’s territory. After the federal government indicted a large number of local MS-13 members on Oct. 22, 2008, Velasquez assumed leadership on the streets and encouraged the remaining members of the gang to engage in violence in order to demonstrate their continued presence in San Francisco despite its loss in numbers due to the federal indictment. 
 
“This conviction marks the beginning of the end for one San Francisco gang leader who thought he was above the law,” said U.S. Attorney Haag. “Today, the jury has sent a strong message that senseless acts of violence like those committed by Mr. Velasquez in the name of MS-13 will not be tolerate. Life is too valuable to let someone steal it from another. Those who try will be prosecuted to the fullest extent of the law.”
 
“In a hail of gunfire, Mr. Velasquez and his co-conspirators killed and wounded four unarmed individuals – all in the name of MS-13,” said Assistant Attorney General Breuer. “Senseless acts of violence like those committed by Mr. Velasquez and his fellow gang members are too common across the United States. Through sustained enforcement, we have taken leaders of MS-13 in San Francisco and elsewhere off the streets, and we will continue our efforts to make all our communities safe from violent gangs.”
 
“The gang members targeted in this Homeland Security Investigations-led probe were the worst of the worst, blithely using violence, intimidation and fear to maintain control over their turf,” said Special Agent in Charge Settles for ICE HSI in San Francisco. “As this jury’s verdict makes clear, we will not allow ruthless thugs to rule our streets. We are joining forces with local law enforcement to bring these criminals to justice and take back our Bay Area neighborhoods.”
 
The evidence presented at trial also showed how the defendants, with others, conspired to commit a variety of crimes to further the goals of the gang, including attacking and killing rival gang members and others who defied or challenged MS-13, including four murders that occurred in 2008. The prosecution also presented evidence of three separate shootings committed by Herrera, Velasquez and other MS-13 gang members that took place within just two months, after the October 2008 indictment. One of the shootings resulted in the death of Moises Frias, a college student, in February 2009.
 
Evidence at trial established that on Feb. 19, 2009, Velasquez and Herrera, accompanied by MS-13 member Jaime Balam, a fugitive, went out looking to kill rival gang members in the San Francisco Bay area. Herrera drove Velasquez and Balam in a stolen vehicle, and Velasquez and Balam both carried semi-automatic guns. The evidence at trial showed that in the Excelsior District of San Francisco, Herrera and Velasquez spotted a car of young Latino professionals, including three college students, a student and a business professional. None of the individuals were gang members themselves.
 
Witnesses testified that Herrera, Velasquez and Balam followed the victims’ car into Daly City, boxed the car in at a red light, whereby Velasquez and Balam flanked the victims’ car carrying semi-automatic handguns. Velasquez then fired multiple shots at close range at three of the passengers, who survived largely because Velasquez’s semi-automatic gun jammed multiple times. Balam allegedly fired his weapon at the remaining passenger until he ran out of bullets. The victim suffered nine gunshot wounds, including to the head, and was killed. The survivors of the shooting testified at trial that the victim begged for the shooting to stop immediately before he died.  
 
A few days before the shooting, Velasquez and Herrera shot and wounded two individuals in rival gang territory on Feb. 13, 2009. After the Feb. 19, 2009, murder, the evidence showed Velasquez ordered another shooting in which Herrera took part, resulting in the wounding of several victims in rival territory on March 2, 2009.  The victims of all the two non-fatal shootings who testified during the trial stated that they were not gang members, but were approached by individuals who exclaimed “La Mara” before shooting them.
 
Herrera pleaded guilty to seven racketeering related counts, including use of a firearm causing the death of Frias. As part of his plea, Herrera admitted that he was part of the MS-13 hunting party that followed the victims’ car on Feb. 19, 2009, and murdered Frias. The evidence presented at trial before Herrera pleaded guilty showed that he was a member of MS-13 for only two to three months before being arrested.  He became a member after his brother, Guillermo Herrera, aka “Sparky,” another MS-13 member, was indicted. Guillermo Herrera was recently convicted of all charges, including murder in aid of racketeering, after a five-month trial that included six other co-defendants. He faces a mandatory life sentence and will be sentenced on Dec. 7, 2011. As part of his guilty plea, Luis Herrera will receive a 35-year prison sentence when he is sentenced on Jan. 24, 2012.
 
Velasquez faces a maximum sentence of life in prison, with a mandatory minimum sentence of 10 years.  Sentencing for Velasquez is scheduled for Feb. 14, 2012, before U.S. District Court Judge William H. Alsup.
 
            The case is being prosecuted by Assistant U.S. Attorneys Andrew Scoble and David Hall of the Organized Crime Strike Force of the U.S. Attorney’s Office for the Northern District of California, and Trial Attorney Theryn G. Gibbons of the Criminal Division’s Organized Crime and Gang Section, with the assistance of Legal Assistants Ponly Tu and Marina Ponomarchuk, Paralegal Kevin Costello, and Linguist Brenda Rodriguez.  The case was investigated by Daly City Police Department, led by Detective Gregg Oglesby, and ICE Homeland Security Investigations, led by Special Agents Alicia MacDonald and Brick Eubank.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 29, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov

 
Failed to report $8.8 Million in Stock Gains, Used Trusts and Nominee Names to Hide Assets
 

                SAN JOSE, Calif., – A former San Jose resident pleaded guilty to tax evasion yesterday, United States Attorney Melinda Haag and Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Scott O’Briant announced. 
 
                According to the plea agreement, between, 1994 and 2001, Gary Linn Packer, 51, was employed by Network Appliance, Inc. (NA) in Sunnyvale, Calif.  He received a portion of his income in NA stock options.  In 2000, Packer liquidated his stock, which resulted in a taxable gain of $8,844,949.  He did not file a tax return for the tax year 2000 and did not pay the IRS the $1,795,740 of income taxes owed.  In order to evade the payment of the income taxes, Packer concealed his assets from the IRS by placing them in nominee names, including several trusts, and used false identification numbers. 
 
                According to court documents, on Aug. 2, 2000, with stock sale proceeds, Packer purchased a home in Morgan Hill, Calif., for $1,205,000.  He took title to this property in the name of The Little Bear Home Trust, which he purchased from We the People Trusts.  Packer did not register this trust with the IRS and did not obtain a taxpayer identification number for this trust.  Also in 2000, Packer purchased another trust from We the People Trust and named it The Good Life Investment Trust (GLIT).  He transferred approximately $655,000 from his Lehman Brothers brokerage account to the GLIT account at Bank of America.  To conceal stock sale proceeds from the IRS, he transferred approximately $6 million to the GLIT account at Citibank/Bear Stearns.  Continuing his attempts to conceal stock proceeds he transferred approximately $2.2 million from the GLIT account at Citibank/Bear Stearns to another GLIT account at Emmett Larkin Co., Inc.
 
                Court documents further show that, from the GLIT, Packer paid personal expenses in cash, including purchasing an Audi TT, a BMW X-5 and a Volkswagen Cabriolet.  He also paid cash for a condo in Nashville, Tenn., which was placed in a nominee’s name.  In October 2006, Packer sold his residence in Morgan Hill.  From the proceeds, he wire transferred $760,258.34 to the GLIT and wire transferred $579,950 into an escrow account for the purchase of a home located in Lodi, Calif., which was placed in a nominee’s name.  Packer lived in that house until March, 2010.  From the sale of the proceeds, he also wire transferred $25,000 to a nominee.
 
                Packer, currently of Cheyenne, Wyo., was charged on March 4, 2010 with two counts of tax evasion.  He pleaded guilty to one count.  Packer has been in custody since his arrest in Wyoming on Feb. 2, 2011.  He is scheduled to be sentenced on March 5, 2012.
 
                The maximum statutory penalty for each count of Tax Evasion, in violation of Title 26, U.S.C § 7201 is five years in prison and a fine of $250,000.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 
 
                Thomas Moore is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

 
            SANTA ANA, California – An Orange County man who served as a vice president of Farmers and Merchants Bank and was the manager of the institution’s Laguna Hills branch pleaded guilty today to stealing nearly $2 million from a customer’s account.

            Matthew J. Walker, 34, of Orange, pleaded guilty this afternoon to one count of theft of bank funds. During this afternoon’s hearing before United States District Judge Andrew J. Guilford, Walker specifically admitted that he stole $1,973,000 over a 16-month period that ended in July 2010.

            By pleading guilty, Walker acknowledged that he withdrew money from a line of credit in the name of a trust that held an account at Farmers and Merchants. To cover up the scheme, Walker made interest payments on the money supposedly loaned to the trust.

            When he is sentenced on May 21, 2012, Walker will face a statutory maximum sentence of 30 years in federal prison. A plea agreement in the case contemplates a sentence of approximately four years, but Judge Guilford will determine the appropriate sentence in this case.

            The case against Walker was investigated by the FBI.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 23, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

Claimed Ineligible Dependents, False Wages, and Expenses

OAKLAND – Diane L. Tuiono of Oakland pleaded guilty to aiding and assisting in the preparation of false tax returns, United States Attorney Melinda Haag and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced.
According to the plea agreement, Tuiono prepared tax returns from 2006 through 2009.  She was not a licensed return preparer and did not sign the returns she prepared.  Many of her clients were low income families who were unaware of the details of state and federal tax laws.  Tuiono did not review the income tax returns with her clients, beyond the amount they were to receive as a refund.  Sometimes her clients brought Forms W-2, 1098, and 1099 to prepare their tax returns and other times they did not have verifiable income or did not earn income at all during the year, but they would still ask her to prepare their returns.  In those situations, Tuiono would input an amount of income on the tax return in order to maximize the amount of the refund.  This resulted in her clients obtaining the Earned Income Credits and/or Child Tax Credits, both of which are refundable credits to the taxpayers. Tuiono also inflated refunds or reduced her clients’ tax liability by using several methods including claiming false filing status, ineligible dependents, non-existent Household Help Income, false wages, exaggerated or fictitious Schedule A itemized deduction, false Schedule C businesses and expenses. 
 
A large number of Tuiono’s clients were married couples with children.  In order to fraudulently increase their refund Tuiono had the married couples filing separate tax returns, one for the husband and one for the wife.  Each return unlawfully listed each spouse as “Single” or “Head of Household”.  In some cases Tuiono split the couples’ children between the two parents or listed ineligible dependents and claimed false income on each of the returns. These fraudulent acts allowed each spouse to receive the highest refundable Earned Income Credit. 
 
For the tax years of 2006, 2007, 2008, and 2009, Tuiono prepared 33 of the 34 returns charged in the Indictment on behalf of 16 different people.  Those returns were filed with the IRS, resulting in a tax loss of $135,803 to the federal government. Tuiono received between $100 to $300 for the preparation of each tax return, which she did not report on her tax returns.
 
Tuiono, 37 of Oakland was indicted on March 24, 2011 on 34 counts of aiding and assisting in the preparation of false tax returns.  She pleaded guilty to one count.  She will be sentenced on February 29, 1012 at 2:00 p.m. before the Honorable Phyllis Hamilton, United States District Court Judge.
 
The maximum statutory penalty for aiding and assisting in the preparation of false tax returns, in violation of 26 U.S.C. § 7206 (2) is three years in prison and a fine of $250,000.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 
 
Thomas Moore is the Assistant U.S. Attorney who is prosecuting this case with the assistance of Kathy Tat.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 23, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
  
            OAKLAND, Calif – Thomas Perez Jewell, 54, pleaded guilty in federal court in Oakland today to one count of producing child pornography announced U.S. Attorney Melinda Haag of the Northern District of California and Assistant Attorney General Lanny A. Breuer of the Criminal Division. 
                                                                       
            During today’s plea hearing before U.S. District Court Judge Phyllis J. Hamilton, Jewell admitted to sexually molesting two minor victims and to producing child pornography of such molestation.  Jewell had been employed by Contra Costa County as a youth mental health counselor intern and had worked in that capacity at the Juvenile Hall in Martinez, California.  In addition, Jewell had a private practice where he purported to work as a life coach and mentor for youths.  Jewell’s molestation offenses were discovered when law enforcement executed a search warrant on his residence for suspected possession of child pornography.  
                                                                                               
            Jewell has been in custody since his arrest on November 18, 2011.  He is scheduled to be sentenced on February 29, 2012, before Judge Phyllis J. Hamilton in Oakland.  At sentencing, Jewell will face a minimum mandatory sentence of 15 years and a maximum sentence of 30 years, a fine of up to $250,000, a maximum term of life on supervised release, and will be required to register as a sex offender in accordance with state and federal law.    
                                   
            The case is being prosecuted by Assistant U.S. Attorney Joshua Hill and Trial Attorney Mi Yung Park of the Department of Justice Child Exploitation and Obscenity Section with the assistance of Vanessa Vargas.  This case was investigated by the Federal Bureau of Investigation, Walnut Creek Police Department, Pleasant Hill Police Department, and Martinez Police Department.
 

Project Safe Childhood

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

United States Attorney Benjamin B. Wagner
Eastern District of California
_____________________________________
FOR IMMEDIATE RELEASE                                                         CONTACT: LAUREN HORWOOD
Tuesday, November 22, 2011                                                                                   PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov

Docket #: 2:09-cr-293-EJG
 
 
                SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that after a five-day trial, a federal jury convicted Thomas Tanke, 67, previously of El Dorado Hills and presently of Monument, Colo., today of two counts of mail fraud and five counts of bank fraud for embezzling funds from his employer.
            This case is the product of an investigation by the FBI and the Sacramento County Sheriff’s Department. Assistant United States Attorneys S. Robert Tice-Raskin and Russell Carlberg are prosecuting the case.
                The evidence at trial established that Tanke was Vice President of Azteca Construction Inc. (Azteca) from July 6, 1999 until his resignation in July 2004. He oversaw the company’s East Coast Division operations from Azteca’s corporate office in Rancho Cordova and conducted construction management for various California projects. As part of his job responsibilities, Tanke approved payments for vendors and suppliers. Construction Equipment Rental & Services (CERS) owned much of the construction equipment and trucks that Azteca leased in its operations. Tanke embezzled funds from Azteca and CERS by depositing checks made out to the companies into his own bank account. He also defrauded Azteca by using Azteca checking accounts to pay for his own personal expenses.
                Evidence presented at trial showed that in 2004, when Azteca and CERS were winding down operations and selling off equipment, third party purchasers issued checks to buy the equipment. Tanke obtained these checks and deposited them into his business bank account. Some of the checks were for more than $30,000.
                Tanke fraudulently caused Azteca checks to be issued for payment to his various personal creditors, and in many instances, he signed the checks. Moreover, in some instances, Tanke submitted false invoices to suggest that the payments were for legitimate company expenses. For instance, Tanke submitted invoices for payment to “AFS” purportedly for a construction project. In reality, “AFS” was “Audi Financial Services,” and Tanke was paying for his personal vehicle from company funds. Tanke also paid off personal credit cards, bought jewelry, and bought an expensive bicycle using company checks.
                Tanke was remanded into custody after the jury returned its verdict. In remanding Tanke, United States District Judge Edward J. Garcia noted that the evidence admitted against Tanke at trial was “overwhelming.” Tanke is scheduled for sentencing on March 15, 2012 by Judge Garcia. He faces a maximum sentence of 20 years in prison, for each count of mail fraud, 30 years in prison for each count of bank fraud, and a $250,000 fine for each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

United States Attorney Benjamin B. Wagner
Eastern District of California
________________________
FOR IMMEDIATE RELEASE                                                         CONTACT: LAUREN HORWOOD
Thursday, November 17, 2011                                                                                 PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov

Docket #: 2:11-cr-0210-JAM

 
            SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced today that thirteen additional defendants were charged in two separate indictments in the Vera Kuzmenko mortgage fraud investigation.  The current indictments bring the total charged in this investigation to twenty-three.  The two most recent indictments involve some of the straw buyers that participated in the scheme. 
 
            In an indictment returned Thursday, November 3, 2011, a federal grand jury in Sacramento charged the following defendants with mail fraud, wire fraud and money laundering: Zhora Darmoyan, 44, of Rancho Cordova; Kristine Atoyan, 32, of Sacramento; Marat Galoyan, 26, of Sacramento; and Martin Atoyan, 46, of Rancho Cordova.  All of the defendants are related by blood or marriage to each other and to Vanik Atoyan, who was charged in the original Kuzmenko indictment.  According to the indictment, each of the defendants submitted fraudulent loan documents for the purchase of residential properties between August 2006 and March 2007.  In total, the defendants were responsible for the origination of over $3.3 million in residential mortgage loans.  None of the defendants ever intended to reside in the properties and quickly defaulted on their respective loans, resulting in foreclosure and a total loss to lenders of over $1.5 million. According to the indictment, in order to qualify for these homes, defendant Vera Kuzmenko prepared loan applications containing materially false information as to the straw buyers’ income, employment, assets and liabilities, and intent to occupy the residences, and defendant Aaron New, a licensed real estate broker, presented the fraudulent applications to lending institutions.
 

            In an indictment returned today, a federal grand jury in Sacramento charged the following additional defendants with mail fraud, wire fraud and money laundering: Irina Markevich, 26, of Rio Linda; Alex Markevich, 36, of Rio Linda; Anatoliy Markevich, 32, of Sacramento; Daniil Markevich, 34, of Escondido; Svetlana Markevich, 34, of Escondido; Natalya Markvich, 35, of West Sacramento; Daniil Piglitsin, 31, of Sacramento; Sergey Pukhkan, 50, of Rio Linda; and Marina Pukhkan, 49, of Rio Linda.  All of the defendants are related by blood or marriage to one another and to Veniamen Markevich, who was charged in the original Kuzmenko indictment.  According to the indictment, each of the defendants submitted fraudulent loan documents for the purchase of residential properties between February 2007 and March 2008.  The defendants were responsible for the origination of over $7.9 million in residential mortgage loans. None of the defendants ever intended to reside in the properties and quickly defaulted on their respective loans, resulting in foreclosure and a total loss to lenders of over $4.9 million.   According to the indictment, in order to qualify for these homes, defendant Vera Kuzmenko prepared loan applications containing materially false information as to the straw buyers’ income, employment, assets and liabilities, and intent to occupy the residences, and defendant Aaron New presented the fraudulent applications to lending institutions.   
 
            The twenty-three defendants charged to date in the Kuzmenko investigation were responsible for originating more than $27.1 million in residential mortgage loans on 39 homes purchased through straw buyers. All of the homes went into foreclosure, causing losses of approximately $15.9 million.
 
            The case is the product of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation.  Assistant U.S. Attorney R. Steven Lapham is prosecuting the case.
 
            The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
 
            This law enforcement action is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. One component of the FFETF is the national Mortgage Fraud Working Group, co-chaired by U.S. Attorney Wagner, which is tasked with combating mortgage fraud schemes. For more information on the task force, visit StopFraud.gov.

United States Attorney Benjamin B. Wagner
Eastern District of California
____________________________
FOR IMMEDIATE RELEASE                                                         CONTACT: LAUREN HORWOOD
Friday, November 18, 2011                                                                                      PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov
 

FRESNO, Calif. — United States Attorney Benjamin B. Wagner, FBI Special Agent in Charge Herbert M. Brown, Bakersfield Police Chief Greg Williamson, Kern County Sheriff Donny Youngblood, and Kern County District Attorney Lisa Green announced the arrests of 21 gang members in an early morning sweep today in Bakersfield. The defendants are charged with narcotics trafficking and firearms offenses. The majority of the defendants arrested today are charged federally; two are state cases.
 
Seventeen federal indictments against 19 persons have been brought in the past several weeks and were unsealed today. Charged in the federal indictments and arrested today were 16 individuals, all of Bakersfield:
 
 
 
Ronnie Alexander, 43                                                                         Dorian Jones, 37
Ray Allen, 28                                                                                       Ernest Joe Kerr, 48
Fellie Martin Bradford Jr., 45                                                             Darius Dewayne Key, 28
Dupree Demery, 31                                                                            Elbert Stokes, 41
Charles Denwitty, 48                                                                          Demetrius Tanner, 24
Andre Johnson, 35                                                                               Darrick Leroy Williams, 42
Samuel Johnson, 27                                                                            Frank Wright III, 43
Tyrone Joseph Johnson Jr., 38                                                             Wyman Young, 40
 
 

 
Three additional federal defendants were already in federal custody: Michael Deshawn Charles, 34; Bruce Leon Daniels, 45; and Tonriko Shropshire, 25. Two additional defendants in this investigation were also already in custody and are being prosecuted by the Kern County District Attorney’s Office. Additional defendants are being sought.
 
At least two other defendants were charged with firearms offenses in previous indictments. Several others have been charged in cases brought by the District Attorney.
 
The arrests are the culmination of a lengthy investigation by the Kern County Violent Crime Gang Task Force, an FBI task force made up of the Bakersfield Police Department, the Kern County Sheriff’s Office, the California Highway Patrol, and the California Department of Corrections and Rehabilitation. The U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and several other law enforcement agencies also participated in the investigation. Over the past year, the Kern County Violent Crime Gang Task Force has targeted the criminal activities of the East Side Crips, a criminal street gang in Bakersfield, and those who supply guns and drugs to the gang.
 
Today’s operation involved more than 100 federal, state, and local law enforcement agents. The federal cases are being prosecuted by Assistant U.S. Attorney Elana Landau. In addition to the defendants being prosecuted federally, a large number of additional gang members and associates identified in the course of the investigation are currently being prosecuted by the Kern County District Attorney’s Office. U.S. Attorney Wagner expressed his appreciation for the close collaboration and teamwork demonstrated by the many agencies that participated in the investigation and in today’s operation.
 
U.S. Attorney Wagner said: “The East Side Crips are a violent street gang whose members have been involved in shootings, robberies, drug dealing, and other illegal activities that have terrorized neighborhoods in this city. My office, along with the Bakersfield Police, other local law enforcement agencies, community leaders, parents, service providers, and government agencies, have participated in the Safe Community Partnership, an effort to assist gang members in giving up violence and becoming productive members of their community. Members of this gang were warned that if they continued to engage in violence, law enforcement would respond vigorously. Members of the East Side Crips continued to engage in drive-by shootings and other violent acts, and today we have responded. Those gang members who are convicted of federal crimes can expect to spend a lengthy time behind bars, in federal institutions far away from Bakersfield.”
 
“Today’s arrests demonstrate the FBI’s active participation in the Safe Streets Violent Crime Initiative and the success of multi-jurisdictional collaboration,” said Special Agent in Charge Brown. “The only way to dismantle the criminal organizations — from street-level thugs to leadership — that invade and destroy our communities is with the collective effort of all law enforcement partners.”
 
Bakersfield Police Chief Williamson stated, “This operation was directed at the single most violent criminal street gang in Bakersfield. With the assistance of the U.S. Attorney’s Office and the FBI, we have seriously damaged the gang’s ability to make money and operate in our community.”
 
Many of the defendants are charged with trafficking in crack cocaine, which carries a mandatory minimum penalty of five years in prison and a maximum of 40 years in prison. Some defendants are charged with being a felon in possession of a firearm, which carries a maximum sentence of 10 years in prison. If convicted, however, the actual sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
 
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

United States Attorney Benjamin B. Wagner
Eastern District of California
______________________________________________________________________________
FOR IMMEDIATE RELEASE                                                         CONTACT: LAUREN HORWOOD
Monday, November 21, 2011                                                                                   PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov

Docket #: 1:11-CR-00406-LJO
 
 
            FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that John Marcus Desenberg, 44, formerly of Newbury Park, Calif., was arrested today by FBI agents in Southern California. On November 17, 2011, Desenberg was charged in a 10-count indictment unsealed today alleging mail fraud.
 
            According to the indictment, Desenberg was purportedly in the business of rescuing homeowners from foreclosure. Doing business as Creative Lending Solutions, Desenberg offered homeowners a “Fresh Start” program that would find an investor to purchase homes from distressed homeowners. Some of the proceeds of the sale would be used to make mortgage payments for the next 12 months. The property owners were allowed to stay in the homes and work on repairing their credit so that at the end of the period, they could obtain new mortgages and purchase their homes back from the investors.
 
            According to the indictment, Desenberg made false representations that he would be monitoring the situation for the next 12 months, and that he would ensure the investor made the mortgage payments. Although Desenberg made these promises, he did not monitor the 12-month credit-repair period, nor did he ensure the mortgage payments were being made. Eventually homeowners lost their homes to foreclosure, with more than $300,000 in equity lost.
 
            U.S. Attorney Wagner said, “Mortgage fraud schemes victimize homeowners, not just mortgage lenders. Foreclosure rescue schemes target homeowners when they are most vulnerable — when they are in fear of losing their homes. We will continue to focus on detecting and prosecuting those who perpetrate such schemes.”
 
            If convicted, Desenberg faces a maximum statutory penalty for each count of mail fraud of 20 years in prison, a $250,000 fine and up to three years supervised release following incarceration. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
 
            The case is the product of an investigation by the Federal Bureau of Investigation and the Merced County District Attorney’s Office. Assistant United States Attorneys Michele Thielhorn and Jeremy Jehangiri are prosecuting the case.
 
            The charges are only allegations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

United States Attorney Melinda Haag
 Northern District of California
 
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 17, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                                Jack.Gillund@usdoj.gov
 
                                   

 
Former Cupertino Man Sold Restricted Microwave Amplifiers
to People’s Republic of China Without a License
 

            SAN JOSE, Calif. – Fu-Tain Lu, formerly of Cupertino, Calif., pleaded guilty in federal court in San Jose today to selling sensitive microwave amplifiers to the People’s Republic of China without a license, United States Attorney Melinda Haag announced.
 
            In pleading guilty, Lu admitted that he was the owner and founder of Fushine Technology, Inc. (Fushine), a California corporation formerly located in Cupertino.  Fushine was an exporter of electronic components primarily used in communications, radar and other applications.  At the time of the offense, Fushine had a sales representative agreement with Miteq Components, Inc. (Miteq), a New York-based manufacturer of microwave and satellite communications components and subsystems.
 
            Lu, 64, admitted that, on March 1, 2004, Fushine submitted a purchase order to Miteq for one microwave amplifier and requested that Miteq notify Fushine immediately if an export license was required.  Miteq responded that the part was controlled for export to China.  Nonetheless, on April 2, 2004, Fushine exported the amplifier to co-defendant Everjet Science and Technology Corporation (Everjet), located in the People’s Republic of China, without having obtained a license or license exception from the United States Department of Commerce.  Lu further admitted that the amplifier he shipped was restricted for export to China for reasons of national security.
 
            Lu, along with the two corporate defendants, Fushine and Everjet, were first indicted on April 1, 2009.  A superseding indictment was returned on Feb. 17, 2010.  In addition to the count of conviction, the indictment also charged him with conspiring to violate United States export regulations, and lying to federal agents who were investigating that conduct.  The indictment alleged that the defendants knew about the licensing restrictions and specifically sought to circumvent them.  The superseding indictment quoted from an internal company e-mail in which an Everjet employee told a Fushine employee, “Since these products are a little bit sensitive, in case the maker ask [sic] you where the location of the end user is, please do not mention it is in China.” The indictment also quoted from another e-mail in which Lu advised a subordinate to pretend that the intended end-user for an item was in Singapore rather than China.
 
            In the plea agreement, Lu also agreed to forfeit 36 additional microwave amplifiers that were seized on March 24, 2010, but that were not included in the superseding indictment.
 
            “Export regulations are vital to protecting the competitiveness and national security of the United States,” said United States Attorney Melinda Haag.  “My office will continue to work vigorously with our law enforcement partners to prosecute willful violations of those regulations.”
 
            U.S. Attorney Haag also expressed her appreciation to the agencies who conducted and assisted with the investigation, including the Department of Commerce Office of Export Enforcement, the Federal Bureau of Investigation, and the Department of Homeland Security’s Immigration and Customs Enforcement as well as Customs and Border Protection.
 
            The sentencing of Lu is scheduled for 9 a.m. on Feb. 21, 2012, before U.S. District Court Judge Ronald M. Whyte, sitting in San Jose.  The maximum statutory penalties for the count of conviction – violation of export regulations (50 U.S.C. § 1705(b) and 15 C.F.R. 764.2(a)) – are 10 years in prison and a $50,000 fine.  Any sentence following conviction, however, would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 
 
            David R. Callaway  is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen and Rawaty Yim.  The prosecution is the result of a joint investigation by the Department of Commerce, the Federal Bureau of Investigation, and U.S. Immigrations and Customs Enforcement Homeland Security Investigations. 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 17, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov

Possession Of Firearms Alleged; $235,524 Cash Seized

 
            SAN FRANCISCO - A federal grand jury in San Francisco returned an indictment in which three Bay Area residents are charged variously with conspiracy; possession with intent to distribute oxycodone and oxymorphone; distribution of oxycodone and oxymorphone; and possession of a firearm by a felon, United States Attorney Melinda Haag announced.
 
            Kim Whatley, 51, of Hayward, Calif., was charged with one count of conspiracy to possess with intent to distribute and to distribute oxycodone, three counts of possession with intent to distribute and distribution of oxycodone and/or oxymorphone, and one count of possession of a firerarm by a felon. Lobis Burton, 72, of Pittsburg, Calif., was charged with one count of conspiracy to possess with intent to distribute and to distribute oxycodone and two counts of possession with intent to distribute and distribution of oxycodone.  Ella Mae Simpson, 54, of Hayward, Calif., was charged with one count of conspiracy to possess with intent to distribute and to distribute oxycodone, three counts of possession with intent to distribute and distribution of oxycodone, and one count of possession of a firerarm by a felon. 
 
            According to the indictment, which was unsealed yesterday, the three defendants conspired to possess and distribute oxycodone. The defendants also each allegedly engaged in individual hand-to-hand sales of oxycodone and oxymorphone in the Bay Area.  In addition, the indictment alleges that Whatley and Simpson are both convicted felons and each possessed a firearm.  The indictment also containes forfeiture allegations for the firearms and $235,524 in cash that was seized by the government.
 
            The maximum statutory penalty for each count of Conspiracy to Possess with Intent to Distribute and to Distribute Oxycodone and each count of Possession with Intent to Distribute and Distribution of Oxycodone and/or Oxymorphone, in violation of Title 21, U.S.C. §§ 846, 841(a)(1), and (b)(1)(C) is 20 years in prison and a fine of $1,000,000.  The maximum statutory penalty for each count of Felon in Possession of a Firearm, in violation of Title 18, U.S.C. § 922(g)(1) is 10 years in prison and a fine of $250,000.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 
 
            The defendants are scheduled for their initial appearance in District Court on Dec. 9, 2011, before U.S. District Court Judge Susan Illston.
 
            Katherine Dowling and Natalie Wight are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rawaty Yim.  The prosecution is the result of a seven month, multi-district investigation by the Federal Bureau of Investigation, Drug Enforcement Agency, and Health and Human Services.
 
            Please note, an indictment contains only allegations against an individual and, as with all defendants, these defendants must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 16, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 

Whistleblower to receive $250,000 for reporting violations

 
            SAN FRANCISCO - Dianik Bross Shipping Corp., S.A., and Chief Engineer Vassili Samoilenko were sentenced yesterday after pleading guilty to felony charges concerning violations of international and national oil pollution laws that occurred on a large bulk carrier called the M/V Kostas N, United States Attorney Melinda Haag announced.  As part of a plea agreement, the company was ordered to pay $650,000, with $150,000 of the monies going to environmental projects in the Bay Area.  Samoilenko was sentenced to more than three months of community confinement, with credit for time served.  Samoilenko will be returning immediately to Estonia, where he resides.
 
                        Samoilenko, 54, pled guilty to two counts of obstructing justice arising from his falsification of an Oil Record Book that was presented to the United States Coast Guard to demonstrate compliance with international and national oil pollution laws.  Dianik Bross pled guilty to one count of violating the Act to Prevent Pollution From Ships based on their knowing failure to maintain an accurate Oil Record Book. 
 
            “By falsifying documents in an attempt to cover up the unlawful discharge of pollutants, the company and the chief engineer showed a blatant disregard for the environment,” said U.S. Attorney Haag.  “This case should send a strong message and underscore the fact that the federal government is committed to protecting our natural resources.”
 
            According to the two plea agreements, a criminal investigation into activities aboard the M/V Kostas N was launched in August 2011 after a crew member passed a note to a Coast Guard inspector during a routine inspection alleging that the ship’s chief engineer had caused the dumping of oily waste and sludge by circumventing pollution prevention equipment required by law.  Engine department operations on the M/V Kostas N can generate large quantities of both oily waste and sludge.  Any and all transfers or discharges of such waste must be recorded in the Oil Record Book.
 
            The investigation uncovered that chief engineers aboard the ship, including Samoilenko, would regularly allow harmful quantities of oily waste to be discharged illegally overboard by tricking the pollution control equipment so that it would not detect when water containing oil was discharged overboard.  Moreover, in July of this year, Samoilenko pumped a harmful quantity of sludge from the sludge tank to the boiler blowdown pipe, which discharged the sludge directly to the ocean.  None of these unlawful discharges were recorded in the Oil Record Book and, instead, entries were made to give the appearance that the ship was in compliance with pollution laws. 
 
            In addition to paying the $500,000 fine and $150,000 for environmental projects in the Bay Area, the company must also implement a comprehensive, environmental compliance plan to minimize the chance that such wrongful conduct could again occur not only on the M/V Kostas N, but on any of the vessels in the company’s fleet.
 
            U.S. District Court Judge James Ware further ordered that the crew member who notified the Coast Guard of the illegal discharges be awarded $250,000 under the Act to Prevent Pollution from Ships which provides that whistleblowers may receive an award of up to one-half of fines collected under that statute.
 
           “Yesterday’s court action demonstrates that neither the government nor the public will tolerate flagrant violations of U.S. laws,” said Nick Torres, Special Agent in Charge of the Environmental Protection Agency’s criminal enforcement program in California.  “The oceans must be protected from shipping companies that look to cut corners by dumping waste illegally.”
 
            “The Coast Guard is deeply committed to protecting the marine environment and considers deliberate failure to comply with U.S. and International Maritime Pollution regulations, and attempting to deceive government regulators in doing so especially egregious acts,” said Coast Guard Capt. Cyndi Stowe, commander of Sector San Francisco.  “The Coast Guard has no tolerance for such illegal acts and this case sends a strong message to the shipping community and citizens of the world that violators will be held accountable and prosecuted to the fullest extent.”
 
            Stacey Geis is the Assistant U.S. Attorney who prosecuted the case with the assistance of Rania Ghawi.  The prosecution is the result of a three-month investigation by the United States Environmental Protection Agency’s Criminal Investigative Division and United States Coast Guard Investigative Services.

         LOS ANGELES – A Reseda man has been sentenced to five years in federal prison for illegally storing toxic and explosive hazardous wastes in his backyard, materials that posed an imminent danger to nearby residents.  The sentence is the longest handed down by a California federal judge in a hazardous waste case.

            Edward Wyman, 64, was convicted of the felony environmental crime on April 5, 2011, by a federal jury following a five-day trial. In addition to convicting Wyman of violating the federal Resource Conservation and Recovery Act (RCRA), the jury made a special finding that Wyman’s conduct knowingly placed another person in imminent danger of death or serious bodily injury.

            In handing down the five year sentence, United States District Judge George H. King stated that “[t]hese are not victimless or hyper-technical offenses,” but rather constituted “a real and present danger” to Wyman’s family and neighbors. 

Judge King also ordered that Wyman pay $800,000 to the United States Environmental Protection Agency for costs associated with a 47 day clean-up response.  During the clean-up, USEPA contractors were forced to call out the Los Angeles Police Department Bomb and Arson Squad officers seven separate times to deal with possible explosives mixed into the burned debris.

            Wyman was charged in June 2009, soon after firefighters responded to a report of a fire and explosions at Wyman’s residence.  Because of the ammunition that was being “cooked off” in the fire, firefighters had to wear bullet proof vests.  Investigators at the scene discovered a large cache of toxic materials, including thousands of rounds of corroded ammunition, highly reactive lead-contaminated waste from shooting ranges, hundreds of pounds of decades-old gunpowder and military M6 cannon powder, and industrial solvents that contained 1,1,1-trichloroethane and tetrachloroethylene (two potent chemicals that are listed as hazardous substances under federal law).  Wyman did not have a permit to store any of the materials.

            "Today's sentence demonstrates the serious nature of federal environmental crimes," according to United States Attorney André Birotte Jr.  "Federal environmental regulations exist to protect both public safety and the environment.  The Department of Justice is committed to protecting the environment and to prosecuting persons who  threaten the community through their illegal actions."

            This case is the result of an investigation by the United States Environmental Protection Agency and the Federal Bureau of Investigation.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 15, 2011                                                                                                         (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

            SAN FRANCISCO – A member of the Central Divis Playas gang was sentenced yesterday to nine years in prison, United States Attorney Melinda Haag announced.  Following a jury trial, Gregory Walker, Jr., a/k/a “Fella,” was convicted on June 30, 2011, of being a felon in possession of ammunition. 
 
            Evidence during the four-day trial showed that Walker got into a shootout on Turk and Steiner Streets in San Francisco during the evening rush hour.  Children and other passersby were present at the time of the shooting, which closed down Turk Street and a nearby school for several hours.  At that time, the defendant was on felony probation for illegal possession of a firearm.  Surveillance cameras recorded the defendant shooting across the crowded street during rush hour at another individual who was also shooting.  However, all suspects fled the scene and the defendant was not apprehended until he was shot in Oakland, Calif., in the Fall of 2010.  Walker has been in custody since his arrest.
           
            Walker, 20, was indicted by a federal grand jury on Nov. 22, 2010.
 
            The sentence was handed down by U.S. District Court Judge Samuel Conti following a jury trial on one count of violating 18 U.S.C. § 922(g).  Judge Conti also sentenced the defendant to a three-year period of supervised release.  The terms of his supervised release prohibit him from associating with other members of the Central Divis Playas, also known as CDP, a gang operating in San Francisco’s Western Addition neighborhood.  The defendant began serving the sentence immediately.
 
            Tarek Helou and Kathryn Haun are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Ana Guerra, Yani Osorio, and Elise Etter.  The prosecution is the result of a joint investigation by the Federal Bureau of Investigation and the San Francisco Police Department’s Gang Task Force.

Third Defendant in Case Makes Initial Appearance Today in Federal Court

 
            LOS ANGELES – The third of four defendants charged in a money laundering scheme related to a narcotics ring that sent a powerful and often-abused cough syrup from Southern California to Texas, where it was distributed under street names such as “purple drank,” is scheduled to make his initial appearance this afternoon in United States District Court.

            Christopher Lamont Crawford, 38, of Houston, was arrested in Texas on October after being named in an indictment that charges him and three others in a conspricy to launder money obtained from the unlawful distribution of promethazine.

            In addition to Crawford, the two-count indictment charges:

               Lucita Uy, 70, of Claremont;
               Uy’s son, Lemuel Libunao, 42, of Claremont; and
               Kendra Patrice Manigault, 44, of Houston, who was arrested on October 12 and has a court hearing in Houston scheduled for this afternoon.

Uy and Libunao were arrested on October 6 and subsequently pleaded not guilty to two counts: conspiracy to launder money and conspiracy to structure cash transactions to evade federal reporting requirements. When Uy and Libunao were arraigned, the case was assigned to United States District Judge Otis D. Wright II, who scheduled a trial for November 29.

            Promethazine is commonly known on the street as “purple drank,” “syrup,” “purple liquid” and “lean,” with the latter name coming from the abuser’s difficulty in standing up straight. Promethazine is a central nervous system depressant which can cause death if it is combined with alcohol.

            According to court documents, Uy acquired three pharmacies – Plaza Pharmacy in Santa Ana, Value Plus Pharmacy in Long Beach, and Blue Rose Pharmacy in Buena Park – so she could obtain promethazine from wholesale distributors. From September 2004 through July 2008, Uy allegedly spent more than $1.1 million to purchase nearly 100,000 pints of promethazine. While a one-pint bottle of promethazine costs no more than $9 at the wholesale level, the same bottle sells for as much as $600 on the streets of Houston.  After purchasing the promethazine, Uy allegedly had the drug shipped to Texas.

            The indictment alleges that Crawford and Manigault acquired promethazine from Uy, unlawfully distributed the narcotic, and provided Uy with the proceeds of the sales. According to the indictment, Uy, along with Libunao and Crawford, deposited more than $6.9 million in cash and more than $2.7 million in money orders into bank accounts.

            An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
            In conjunction with the indictment, IRS - Criminal Investigation is seeking to forfeit property allegedly obtained with the proceeds of the illegal distribution scheme. The property to be forfeited includes seven real properties located in Monrovia, Claremont and Houston; $64,500 in cash; a 2007 Mercedes Benz S550; a 2007 Honda CRV; a 2007 Toyota Tundra; and 11 luxury watches, including a Rolex trimmed in diamonds.

            “The allegations against Uy and her co-conspirators indicate they intended to enrich themselves by engaging in conduct that put the lives of others at risk,” said IRS-Criminal Investigation Special Agent in Charge Leslie P. DeMarco. “One of the government’s most powerful weapons is the ability to seize through asset forfeiture the property obtained through this illegal distribution scheme, including real estate, cash, vehicles and jewelry. By taking away their assets and profits, we deprive them of the proceeds of their criminal activity.”

            If they are convicted of the charges in the indictment, Uy and Libunao would face a statutory maximum sentence of 25 years in federal prison, while Crawford and Manigault would each face up to 20 years in prison.

            The investigation in this case was conducted by IRS - Criminal Investigation and the Drug Enforcement Administration.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND November 3, 2011                                                                                                           (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
            SAN JOSE, Calif. – Facing charges of income tax evasion, a Monterey, Calif., woman made her initial federal court appearance in San Jose yesterday, United States Attorney Melinda Haag announced. 
 
            Cheryl Savage was indicted by a federal grand jury in San Francisco on Oct. 4, 2011.  According to the indictment, She is alleged to have under-reported her taxable income for the 2004, 2005 and 2006 tax years.
 
            Savage is currently out on bond.   She is next scheduled to appear in federal court at 10 a.m. on Nov. 30, 2011, for trial setting before United States District Court Judge Lucy H. Koh.
 
            The maximum statutory penalty for each count of income tax evasion in violation of 26 U.S.C. §7201 is five years in prison and a fine of $250,000, plus restitution if appropriate.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 
 
            The case is being prosecuted by Assistant United States Attorney Cynthia Stier, with the assistance of Kathy Tat.  The prosecution is the result of an investigation by Internal Revenue Service Criminal Investigation. 
 
            Please note, an indictment contains only allegations against an individual and, as with all defendants, Cheryl Savage must be presumed innocent unless and until proven guilty.