SACRAMENTO, Calif. — A number of arrests have occurred in a major federal investigation into drug trafficking throughout the country, United States Attorney Benjamin B. Wagner announced.

            According to court documents, agents arrested a total of 25 individuals in Vallejo, Stockton, Fairfield, Oakland, Los Angeles, New York, and Oklahoma City. Some of those arrested are Vallejo-based rappers and associates of an entertainment label known as “Thizz Entertainment.”

            Vallejo Police Chief Robert Nichelini stated: “This is another example of partnership that exists between the Drug Enforcement Administration and the Vallejo Police Department to improve the safety of our community and reduce the level of violence associated with drug dealing. We appreciate the efforts of the U.S. Attorney for the Eastern District of California in coordinating the investigation and prosecuting the persons involved in such a complex and dangerous criminal enterprise.”

            During the investigation, agents seized approximately 45,000 MDMA pills, approximately four pounds of crack cocaine, a half pound of heroin, and $200,000 in suspected drug proceeds. Agents also forfeited 230 acres of property valued at approximately $1 million as part of the investigation. As part of last Thursday’s takedown, agents executed three federal search warrants and seized approximately five pounds of marijuana, a loaded firearm, a 2010 Audi A6 with an estimated value of $60,000, and an Audi S5 with an estimated value of $50,000. Agents seized $67,238.00 in Vallejo and $6,831.00 in Sacramento for a total of $74,069 during the service of the federal search warrants.

            According to the criminal complaints, the DEA-led investigation uncovered a network of drug distributors working in the Crest neighborhood of Vallejo, along with individuals transporting large quantities of drugs outside of California to realize a larger profit. A number of the subjects of the investigation performed as rappers under the entertainment label known as “Thizz Entertainment.” The origins of Thizz Entertainment can be traced back to the notorious Vallejo-based robbery crews known as the Romper Room Gang. The primary activities of the Romper Room Gang included armed bank robberies, drug trafficking, and murder. The Romper Room Gang was active throughout the late 1980’s and 1990’s. However, as a result of Vallejo police investigations with the assistance from federal law enforcement, many Romper Room gang members were convicted of federal crimes and incarcerated for several years in the state and federal prison systems.

            Some of the individuals charged in the criminal complaint are alleged to be former members of the Romper Room Gang. According to the complaint, Thizz Entertainment started in 1999 as a record label promoting and producing rap artists from the San Francisco Bay Area, primarily from the Crest neighborhood of their hometown of Vallejo. The name “Thizz Entertainment” originates from the term “Thizz,” which is slang for the drug MDMA (also known as “Ecstasy”). In many songs by artists on the Thizz Entertainment label, the lyrics glorify and promote the use and distribution of MDMA pills.

            The complaint alleges that the targets of this investigation engaged in large-scale drug trafficking while also releasing rap albums under the Thizz Entertainment label. During the conspiracy, agents uncovered trafficking of MDMA, cocaine, cocaine base, heroin, Oxycodone, and marijuana, in violation of federal law. The complaint details drug shipments sent from the Vallejo area to Oklahoma City; Jamaica; Queens, N.Y.; Atlanta; and Milwaukee, Wisc.

            The following individuals were charged with multiple counts of drug trafficking in the two federal criminal complaints:
Michael Lott, performs under the name “Miami the Most” *Major Norton, performs under the name “Dubee” *Lawrence Kennedy Nelson Gaylord Franklin, performs under the name “Geezy” Clifford Bullock *Narco McFarland Sr., Latroy Cunningham *Eric Robinson Dante Barbarin *Eileen Knight Beshiba Cook Bruce Thurmon, performs under the name “Little Bruce” Damian Peterson Mikel Brown **Nicholas Ramirez *Ung Duong *Phat Nguyen *Marcus Davis **Tiffany Brown Andre Cawthorne *Michael Smiley *Anthony Young *Anthony Payton
*Arrested and detained in custody except where noted released. **Arrested and released. A preliminary hearing has been set for May 4, 2012.

            This case is the product of an extensive investigation by the DEA Sacramento District Office, the Vallejo Police Department, the El Dorado County Sheriff’s Department, and the Sacramento FBI Safe Streets Task Force. Assistant United States Attorney Jason Hitt is prosecuting the case.

            This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

            When prosecuted in federal court, drug traffickers typically receive much harsher sentences. In addition to the longer sentences imposed, unlike state court prisoners who are released early on parole, there is no early release on parole in the federal system.

            The charges are only allegations. Each of the defendants listed is presumed innocent, unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                             April 23, 2012                                                                                                                         

Former Attorney Lost Approximately $7 Million of $10 Million Invested With Him

 
           SAN FRANCISCO - Former attorney Robert G. Tunnell, Jr., was sentenced late Friday afternoon to almost five years in prison after pleading guilty to mail fraud and wire fraud resulting from his operation of a multi-year investment fraud scheme through which he defrauded his victims out of more than $7 million, United States Attorney Melinda Haag announced.
 
           Tunnell, 73, was an attorney until he resigned from the State Bar of California while charges that he diverted approximately $300,000 from his law firm to his own account were pending against him.  According to court documents, Tunnell held himself out as a successful investor, promising substantial returns while representing that he would invest funds in a conservative, safe and cautious manner.  Tunnell, however, engaged in risky trading activity with his investors’ money, losing approximately $7 million of the approximately $10 million investors – mostly family members and personal friends – entrusted to him from at least as early as January 2006 through his arrest in June 2011. Tunnell used most of the remaining money from his investors to repay other investors. Despite these substantial losses and other dissipation of funds, Tunnell consistently and falsely reported gains to his investors.
 
           A Criminal Complaint was filed against Tunnell on June 22, 2011. He was arrested on June 23, 2011. On June 24, 2011, Tunnell was released on bail. He pleaded guilty to mail fraud and wire fraud on Nov. 22, 2011.
 
           After Tunnell’s arrest, the victims in this case received reimbursement of their losses – a total of approximately $8.6 million – from a family member of Tunnell’s. That family member had no involvement in or knowledge of Tunnell’s scheme.
 
           The sentence was handed down by U.S. District Court Judge Charles R. Breyer. Judge Breyer also sentenced Tunnell to a three-year period of supervised release, including as a condition that after his release from prison, Tunnell must spend six months on home detention with electronic monitoring.  Judge Breyer ordered Tunnell to surrender by June 19, 2012, to begin serving his prison sentence.
 
           Doug Sprague is the Assistant U.S. Attorney who prosecuted the case with the assistance of legal assistant Rayneisha Booth.  The prosecution is the result of a three-month investigation by the Federal Bureau of Investigation, with assistance from the United States Commodity Futures Trading Commission.
 
            This law enforcement action is part of 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.

Docket #: 1:10-cr-00498 LJO

FRESNO, Calif.—United States Attorney Benjamin B. Wagner announced that United States District Judge Lawrence J. O’Neill sentenced Lonny Ray Haycock, 31, of Bakersfield, today to 24 years and 3 months in prison for the sexual exploitation of a minor for producing images of minors engaged in sexually explicit conduct. Following his release from prison, Haycock will serve 20 years of supervised release and be required to register as a sex offender for life.

According to court documents, on August 21, 2010, Haycock knowingly used a minor to engage in sexually explicit conduct for the purpose of producing child pornography. Haycock, a former information technology specialist with the Delano Joint Unified School District, used the Internet to transmit the images of child pornography. The minor used in the production of the sexually explicit images was under the age of 12 years.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Jeremy R. Jehangiri prosecuted the case.

The prosecution is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov, or call the U.S. Attorney’s Office for the Eastern District of California and ask to speak to the PSC Coordinator.

Docket #: 1:11-cr-000299 AWI

            FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that Chief United States District Judge Anthony W. Ishii sentenced Roman Santana, 29, of Modesto, to a year in prison for trafficking in counterfeit labels and counterfeit documentation and packaging, in connection with his distribution of counterfeit music CDs. Santana pleaded guilty on January 17, 2012.

            According to court documents, between May 2011 and July 25, 2011, Santana sold counterfeit music CDs, with accompanying counterfeit labels, documentation and packaging, to the public at the 7th Street flea market in Modesto. On July 25, 2011, approximately 2,385 counterfeit music CDs were seized from Santana’s possession.

            This case was the product of an investigation by the Federal Bureau of Investigation and the Sacramento Valley Hi-Tech Crimes Task Force. Assistant United States Attorney Henry Z. Carbajal III prosecuted the case.

 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     April 20, 2012                                                                                                                  (415) 436-6599  
 
            SAN JOSE, Calif. – Luis Angel Dimas was sentenced yesterday to 200 months in federal prison for his role in supplying four pounds of methamphetamine in a Drug Enforcement Agency sting operation, United States Attorney Melinda Haag announced.  Dimas, a Mexican national, is expected to be deported following the completion of his prison sentence.
 
            Dimas was convicted on Nov. 8, 2011, for two felony counts of distributing methamphetamine, and conspiracy to do the same, by a federal jury after a week long trial.  During the trial, evidence showed that Dimas agreed to supply his co-defendants, Jose Morales-Palacios and Alberto Vasquez-Rodriguez, with four pounds of methamphetamine in a drug transaction arranged by Palacios on Aug. 6, 2009, at a location on Piercy Road, in San Jose.  None of the men realized that the buyer of the methamphetamine was a person working undercover for the DEA and that the controlled purchase was conducted under the surveillance of law enforcement.  Dimas was arrested after he attempted to flee the scene and has remained in custody since his arrest.
 
            DEA agents recovered four pounds of methamphetamine from the scene.  Forensic testing revealed that the methamphetamine was more than 95 percent pure, and contained 1,686 grams of actual methamphetamine.  According to the National Institute of Justice, a novice user of methamphetamine typically ingests approximately 1/8 gram of methamphetamine to obtain the desired effects; a regular user ingests methamphetamine in 1/4 gram units.  
           
            Dimas, 30, formerly a resident of Milpitas, Calif., was indicted by a federal grand jury on Aug. 19, 2009.  He was charged with two felony counts of conspiracy to distribute methamphetamine, in violation of 21 U.S.C. § 846, and possession with intent to distribute methamphetamine, in violation of 21 U.S.C. § 841.  Both counts carry a mandatory minimum 10 year prison sentence, and up to life in prison. 
 
            Palacios and Rodriguez, also Mexican nationals, pled guilty before trial, and each received nine year prison sentences and are expected to be deported following the completion of their prison sentences.
 
            Dimas’ sentence was handed down by U.S. District Court Judge D. Lowell Jensen following a jury trial.  Judge Jensen also sentenced the defendant to a five-year period of supervised release.  Dimas will remain in custody pending designation to a Bureau of Prisons facility.
 
            Daniel Kaleba and Amber Rosen are the Assistant U.S. Attorneys who prosecuted the case, with the assistance of Lakisha Holliman and Kamille Singh.  The prosecution is the result of an investigation by the Drug Enforcement Agency.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     April 19, 2012                                                                                                                  (415) 436-6599  

 
            OAKLAND, Calif. – Mahendar “Mike” Singh  was sentenced yesterday to nine years in prison for conspiracy to commit sex trafficking, United States Attorney Melinda Haag announced.
 
            Singh, 40, pleaded guilty on Jan. 11, 2012, to sex trafficking conspiracy.  In pleading guilty, Singh admitted that he and his wife, co-defendant Helen Jean Singh (née Kearney), 22, both formerly of Sacramento, Calif., conspired to operate a prostitution enterprise between Spring 2011 and August 2011 in Sacramento County and multiple Bay Area counties.  Mahendar Singh admitted to recruiting teenage girls to provide sex services in exchange for money and drugs and to knowing that at least one of the teenagers was a juvenile.  He also admitted that he and his wife were able to maintain their victims’ services by providing them with money, clothing and drugs, promising them a family-like environment, and using and threatening the use of physical force.  The defendants used Internet websites to advertise the victims and cell phones to make arrangements with customers.  
 
            “Sex trafficking is a blight on our communities and, unfortunately, today’s technology makes it possible for modern day pimps to spread this blight far and wide,” United States Attorney Haag said.  “My office will continue to work closely with local, state and federal law enforcement authorities to help bring an end to sex trafficking and to help ensure that the perpetrators of this criminal activity are brought to justice.”
 
            “Today's sentence is a victory not only for the young victims of this particular case, but also for human dignity and the rule of law,” said Clark Settles, special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations San Francisco. “HSI is fully committed to working with our law enforcement partners, both local and international, to combat the crime of human trafficking. We encourage anyone who suspects that human trafficking is occurring in their community to report it to authorities immediately.”
 
            “Coercion of juveniles into prostitution is a particularly heinous crime,” said FBI San Francisco Special Agent in Charge Stephanie Douglas. “We are committed to working with our law enforcement partners to target individuals engaged in such sex trafficking, and to do all within the FBI's powers to protect the most vulnerable in our society.”   
 
            The sentence was handed down by U.S. District Court Judge Phyllis J. Hamilton.  Judge Hamilton also sentenced Mahendar Singh, who was and will remain in custody, to a five-year period of supervised release following his prison term.  A federal grand jury indicted Mahendar Singh and Helen Jean Singh on the sex trafficking conspiracy charge on Dec. 1, 2011.  Helen Singh, who is also in custody, pleaded guilty to the same charge on Jan. 18, 2012.  Her sentencing date has not yet been set.
                         
            Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal assistant Vanessa Vargas.  The prosecution is the result of a joint investigation by U.S. immigration and Customs Enforcement Homeland Security Investigations (HSI) and the Federal Bureau of Investigation (FBI) after an initial investigation and referral by the South San Francisco Police Department and with the assistance of the San Mateo County District Attorney’s Office, the Human Trafficking Prosecution Unit of the Criminal Section, Civil Rights Division, U.S. Department of Justice, and the Child Exploitation and Obscenity Section of the Criminal Division, U.S. Department of Justice.
 
                Anyone who suspects instances of human trafficking are encouraged to call the FBI, HSI, or the Human Trafficking Hotline at 1-888-3737-888. Anonymous calls are welcome. 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     April 18, 2012                                                                                                                 (415) 436-6599  
 

Overstated Deductions and Expenses

SAN  FRANCISCO – Ali Sedghi Vaziri of Napa, Calif., was arraigned in federal court yesterday after being charged by a federal grand jury in San Francisco with six counts of filing a false federal income tax return, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge Marcus Williams. 
                According to the indictment, which was unsealed yesterday, Vaziri, 47, was a medical doctor who owned and operated a medical practice in Napa.  For 2005 and 2006, Vaziri overstated his business expenses, when he knew his business expenses were substantially less than the amount stated on the returns.  For 2007 and 2008, Vaziri overstated his total deductions on his corporate income tax returns filed for Ali S. Vaziri MD, Inc., when he knew his total deductions were substantially less than the amount stated on the return.  This resulted in the reporting of incorrect amounts of non-passive loss on the 2007 individual income tax returns and non-passive income on the 2008 individual income tax returns that Vaziri filed.
 
                Vaziri pled not guilty to the charges and was released on a $250,000 secured bond.  He is next scheduled to appear in federal court on April 30 for a status hearing before United States District Court Judge James Ware.
 
                The maximum statutory penalty for each count of willfully subscribing a false income tax return, in violation of 26 U.S.C. § 7206(1) is three years in prison and a fine of $100,000.  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. 
 
                Katherine B. Dowling is the Assistant U.S. Attorney who is prosecuting this case with the assistance of Rawaty Yim.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation.
               
                Please note, an indictment contains only allegations against an individual and, as with all defendants, Vaziri must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

April 6, 2012                                                                                                                    (415)

 
Admitted to Defrauding Government of Over $4 Million

 
        OAKLAND - Balvinder Singh Chadha pleaded guilty in federal court in Oakland, California, this week to committing wire fraud and conspiring to violate the federal conflict of interest statutes, United States Attorney MELINDA HAAG announced.  His wife and co-defendant Jaspinder Kaur Chadha pleaded guilty earlier on March 28, 2012 to conspiring with Mr. Chadha.
 
        In pleading guilty, Mr. Chadha, 45, of Union City, California, admitted that he was an investor in and served as the de facto head of a company called Golden Pacific Logistics, Inc. (“GPL”) while employed as Manager of Postal Vehicle Service Operations at a United States Postal Service (“USPS”) facility in Oakland, California.  GPL was established for the purpose of obtaining truck leasing contracts with the USPS unit managed by Mr. Chadha.  In July 2005, Mr. Chadha endorsed GPL during the procurement process for an USPS truck leasing contract that was ultimately awarded to GPL.  Over the next four years, GPL billed USPS for trucks that were never leased, mileage that was never incurred, and servicing and maintenance costs that were never authorized under GPL’s contract.  Using his USPS position, Mr. Chadha authorized payments to GPL and requested at least 18 modifications of the original contract, which extended the time period of the contract and increased the number of trucks authorized for leasing.  All told, GPL billed and received $6,434,469.19, which included at least $4,432,156.82 in fraudulent billing.
 
        Additionally, Mr. Chadha and Ms. Chadha admitted to conspiring to violate the federal conflict of interest statute, which prohibited Mr. Chadha, as an USPS employee, from willfully participating in a contract in which he and his wife had a financial interest.  The Chadhas admitted that they engaged in a variety of measures to conceal Mr. Chadha’s association with GPL and create the appearance that Mr. Chadha and GPL were engaged in an arm’s length business relationship. 
 
           The United States Attorney charged the Chadhas in a two-count information filed on March 16, 2012.  Count One charged him with committing wire fraud, in violation of 18 U.S.C. § 1343, and Count Two charged him and co-defendant Jaspinder Singh Chadha, 39, with conspiring to willfully violate the federal conflict of interest statute (18 U.S.C. §§ 208 and 216(a)(2)), in violation of 18 U.S.C. § 371. In addition, the information contains a forfeiture allegation against Mr. Chadha in relation to the wire fraud offense. Pursuant to their respective plea agreements, Mr. Chadha pled guilty to both counts and Ms. Chadha pled guilty to Count Two.
 
         “As federal agencies, we have a responsibility to combat fraud and ensure taxpayers’ dollars are not being misspent,” said Clark Settles, special agent in charge for Homeland Security Investigations San Francisco.  “These guilty pleas should send a message about the serious consequences facing those who seek to exploit their position for personal gain at the expense of the American people.” 
 
         Joanne Yarbrough, Special Agent in Charge for the Major Fraud Investigations Division of the United States Postal Service Office of Inspector General said, ”the vast majority of Postal Service employees and contractors are hard working professional individuals dedicated to the furtherance of  Postal Service operations.  However, when employees and contractors violate the public trust, as in this case, the Major Fraud Investigations Division will investigate those individuals aggressively and seek prosecution to the fullest extent of the law.   The Major Fraud Investigations Division appreciates the US Attorney’s Office in the Northern District Of California for prosecuting the case and the assistance provided by the U.S. Immigration and Customs Enforcement in the investigation.”
 
        Mr. Chadha and Ms. Chadha were both released on bond.  Their sentencings are scheduled for July 11, 2012 before Judge Phyllis J. Hamilton in Oakland.  The maximum statutory term of imprisonment for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years and the maximum statutory term of imprisonment for conspiracy, in violation of 18 U.S.C. § 371, is 5 years.  Additionally, each count has maximum statutory penalties of $250,000 or twice the gross pecuniary gain or twice the gross pecuniary loss, whichever is greater; 3 years of supervised release; $100 mandatory special assessment; and restitution.  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.
 
        Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal assistants Vanessa Vargas and Jeanne Carstensen.  Assistant U.S. Attorney Susan Gray also provided assistance with the investigation and prosecution of this case.  The prosecution is the result of a multi-year joint investigation by the United States Postal Service Office of Inspector General's Major Fraud Investigations Division and the Asset Identification and Removal Group of Homeland Security Investigations.

United States Attorney Melinda Haag
 Northern District of California
 

April 5, 2012                                                                                                                   
 
 
            SAN FRANCISCO - Josh Leo Johnson was sentenced yesterday to 12 months in custody and ordered to pay $130,000 in restitution to Sun Trust Mortgage for his role in a mortgage fraud scheme, United States Attorney MELINDA HAAG announced.
 
            The defendant, the current Vice President of the Hells Angels Sonoma Chapter,  pleaded guilty on December 13, 2011 to wire fraud.  According to the plea agreement, Johnson admitted that from 2006 until 2007, he was involved in a conspiracy with others to fraudulently obtain mortgage loans.  Specifically, in May 2007 he signed loan applications, containing materially false statements, for real property in Healdsburg, Calif.  These false statements caused interstate wire transfers of loan funds from mortgage lenders directly to Johnson’s account.  Some examples of the false statements contained in the loan applications included that Johnson was the owner of a fictitious company for several years and making a large and recurring salary.  The documents supporting the loan applications also contained altered bank statements in Johnson’s name to reflect a series of inflated balances in his bank account.  The loan applications Johnson submitted ultimately resulted in a loss to the lender of approximately $135,000, though the amount of loss in the overall conspiracy is at least several million dollars.
 
            Johnson, 36, of Santa Rosa, Calif., was indicted by a federal grand jury on September 1, 2011.  He was charged with conspiracy to commit bank and wire fraud, and wire fraud.  He pleaded guilty to wire fraud.
 
            The sentence was handed down by U.S. District Court Judge William Alsup.   Judge Alsup also sentenced the defendant to a three year period of supervised release with several special conditions, one of which was that half of his 12 month sentence must be served in federal prison while the remaining portion may be served in the form of home detention.

            Kathryn Haun is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Tech Daniel Charlier-Smith.  The prosecution is the result of a multi-year investigation by the Internal Revenue Service Criminal Investigations Division and the Federal Bureau of Investigation’s Santa Rosa Resident Agency.

United States Attorney Melinda Haag
 Northern District of California 

April 4, 2012                                                                                                                    
 
 

Charges Relate to Alleged Fraudulent Scheme
to Obtain Approval from Phone Companies to Place
Charges on Consumers’ Phone Bills Without Informing
Phone Companies of Prior Cramming Complaints

 
            SAN FRANCISCO - A federal grand jury in San Francisco indicted Roy Lin and John Lin, of San Francisco, on March 27, 2012, with six counts of mail fraud, one count of conspiracy to commit mail fraud, and three counts of engaging in monetary transactions using criminally derived property, United States Attorney MELINDA HAAG announced.
 
            The charges relate to the Lins’ operation of a business in San Francisco known as INC21.com Corporation.  INC21 and its related companies were in the business of providing Internet services to consumers, including on-line directory-based information services, web hosting, search engine optimization, and Internet faxing.  INC21 and its related companies commonly charged consumers for these services through the use of local exchange carrier (“LEC”) billing.  LEC billing enables third-party vendors to charge customers for products and services by placing charges onto the customers’ local telephone bills.  In order to obtain approval for LEC billing, the third-party vendors provided information to the phone companies (i.e., the LECs) through various billing aggregation companies.
 
            According to the indictment, Roy Lin, 43, and John Lin, 41, both of San Francisco, are alleged to have made numerous false representations on application forms submitted to billing aggregation companies for the purpose of gaining access to LEC billing after complaints had arisen regarding one or more of the INC21 companies.  For example, the Lins are alleged to have misled the billing aggregation companies and the LECs regarding the company-applicant’s relationship to other INC21 companies and to the defendants.  The Lins are also alleged to have provided false information about whether any state or federal agencies previously had taken regulatory action against an INC21 company, its affiliates, or its principals. After these misrepresentations were made, several of the defendants’ companies were approved for LEC billing.

            In 2010, the Federal Trade Commission filed a complaint for injunctive and other equitable relief against Roy Lin, John Lin, INC21, and several of its related companies.  The FTC complaint alleged that the defendants in that case had engaged in cramming of unwanted and unauthorized charges on consumers’ telephone bills.  In 2009, the United States also filed a separate civil asset forfeiture action.  In September 2010, Judge William H. Alsup granted summary judgment in the FTC case against the defendants in that case, ordered restitution in the amount of $37,970,929.57, and permanently enjoined the defendants from billing customers, either directly or through an intermediary, by placing any charges onto any telephone bill.  On March 30, 2012, the Ninth Circuit Court of Appeals affirmed Judge Alsup’s decision.
 
            Both defendants were arrested on April 4, 2012, in San Francisco and made their initial appearances in San Francisco that day.  Roy Lin was released on a $50,000 bond.  John Lin currently remains in custody pending the resolution of detention hearing.  The defendants’ next scheduled appearance is at 10:00 a.m. on April 5, 2012, for identification of counsel and for a detention hearing (as to John Lin) before United States Magistrate Judge Maria-Elena James.  
 
            The maximum statutory penalty for each count of mail fraud and for the conspiracy count in violation of 18 U.S.C. §§ 1341 and 1349, respectively, is 20 years’ imprisonment, 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. 
 
            Hallie Mitchell and Kyle Waldinger are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elizabeth Garcia and Rayneisha Booth.  The prosecution is the result of an investigation by the United States Postal Inspection Service and the Criminal Investigation Division of the Internal Revenue Service.
 
            Please note, an indictment contains only allegations against an individual and, as with all defendants, the Lins must be presumed innocent unless and until proven guilty.
 

United States Attorney Melinda Haag
 Northern District of California

April 4, 2012                                                                                                                    (415)
 

 
Defendants Convicted of Obstructing SEC Investigation into Misuse of
Investor Monies and False Filings in Connection with IPO

 
            OAKLAND, Calif. – For conspiring to obstruct an investigation of the Securities and Exchange Commission, Nasser V. Hamedani and Sholeh A. Hamedani were sentenced yesterday to 25 months and 20 months, respectively, in prison,  United States Attorney Melinda Haag announced. They were also ordered to perform a total of 1,750 hours of community service as part of their two-year terms of supervised release.
 
            The defendants, father and daughter, pled guilty on Nov. 9, 2011,  to violating 18 U.S.C. § 371 – conspiracy to obstruct justice.  According to the plea agreement, the Hamedanis admitted to making false statements while under oath and producing fraudulent documents in order to impede and obstruct the SEC’s investigation into the registration and sales of securities issued by the company known as The Children’s Internet, Inc. (TCI).   TCI was an internet start-up company based in San Ramon, Calif., that was in the process of developing and marketing software to protect and secure children’s access to the internet.
 
            Nasser Hamedani, 74, and Sholeh Hamedani, 44, both residents of Antioch, Calif., were indicted by a federal grand jury on May 12, 2009.  A superseding indictment was returned on July 21, 2009.  The two defendants were charged with conspiracy, securities fraud, false statements to accountants, false books and records, and obstruction of justice. 
 
            “Obstructing the SEC from carrying out its mission to protect investors and the integrity of the financial markets is a serious offense with serious consequences,” U.S. Attorney Haag said.   “This investigation demonstrates the U.S. Attorney’s office’s commitment to prosecuting individuals who make false statements and fabricate documents in response to investigations by our enforcement partners at the SEC.”
 
            In addition to their criminal convictions, the Hamedanis remain subject to final judgments entered by U.S. District Judge Claudia Wilken on Oct. 23, 2008, in the SEC’s civil action.  According to those Judgments, the Hamedanis were held jointly and severally liable for disgorgement and prejudgment interest of approximately $4.0 million, and were each fined $100,000 in civil penalties.  The final judgments also impose permanent injunctions against the Hamedanis from violating certain provisions of the federal securities laws, prohibit them from serving as an officer or director of a publicly reporting company and prohibit them from engaging in penny stock transactions.        
           
            Both sentences were handed down by Judge Wilken following guilty pleas on Count 10 of the Superseding Indictment in violation of 18 U.S.C. §§ 371 and 1505.   Judge Wilken also sentenced the defendants to a two-year period of supervised release with conditions including 90 days in a halfway house, community service, and restrictions on their financial activities.  The Judge also set a restitution hearing for May 22, 2011, at 2:30 PM in order to accommodate the large number of victims with potential claims against the defendants and coordinate any restitution with the existing Final Judgments.
 
            Timothy J. Lucey is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elise Etter.  The prosecution is the result of a two-year investigation by the FBI with the substantial assistance of the SEC’s San Francisco Regional Office.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                CONTACT:  JACK GILLUND March 26, 2011                                                                                                                    (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                              Jack.Gillund@usdoj.gov

 
Former Giants Payroll Manager Embezzled $2.2 Million

 
            SAN FRANCISCO – Robin M. O’Connor was sentenced today to 21 months in prison, and ordered to pay $1,456,865.60 in restitution for embezzling over $2 million from her former employer, the San Francisco Giants Baseball Club, United States Attorney MELINDA HAAG announced.
 
            Ms. O’Connor pleaded guilty on November 14, 2011, to wire fraud.  According to the plea agreement, Ms. O’Connor, a former payroll manager for the Giants, admitted to embezzling approximately $2.2 million from June 2010 through June 2011.  According to the plea agreement, Ms. O’Connor diverted money from the Giants and Giants employees by, among other methods, transferring into her personal bank accounts (i) funds derived from improperly reducing employee tax withholdings, (ii) funds intended to pay employee salary and expenses, and (iii) funds from fictitious paychecks that she created.  Ms. O’Connor has returned some of the funds, and forfeited certain assets as part of her obligation to pay restitution.
 
            Ms. O’Connor, 42, of American Canyon, was charged by complaint on July 7, 2011, and by information on November 3, 2011.  The information charged her with one  count of wire fraud in violation of Title 18, United States Code, Section 1343, to which she pleaded guilty pursuant to a plea agreement.
 
            Ms. O’Connor was arrested on July 8, 2011, and was released on that date on a $500,000 secured bond.  The sentence was handed down by U.S. District Court Judge James Ware following a guilty plea to the wire fraud count alleged in the Information.   Judge Ware also sentenced the defendant to a 3 year period of supervised release, during which she will be subject to other conditions.  The defendant will begin serving the sentence on June 11, 2012.
 
            Thomas E. Stevens is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND March 1, 2012                                                                                                                 (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 
                SAN FRANCISCO – A federal grand jury in San Francisco today indicted Mikal Xylon Wilde, of Humboldt County, with murder during narcotics offense, conspiracy to manufacture and distribute 1000 or more marijuana plants, manufacture and possession with intent to distribute 1000 or more marijuana plants, use of a firearm during and in relation to a drug trafficking offense and crime of violence, use of a firearm causing death in the form of murder, and possession of ammunition by a convicted felon, United States Attorney Melinda Haag announced. The defendant is alleged to have operated a marijuana farm with approximately 1500 marijuana plants in Humboldt County.  Wilde is also charged with having used a firearm during the course of the narcotics offense to kill Mario Roberto Juarez-Madrid, originally from Guatemala, who was working on the marijuana farm at the time of the murder on Aug. 25, 2010.
 
           The defendant is currently in custody in Humboldt County on state murder charges arising from the same incident. The defendant will make his initial appearance in federal court in Eureka before U.S. Magistrate Judge Nandor J. Vadas.
 
           The maximum statutory penalty for murder during narcotics offense is from 20 years to life in prison or death and a $10 million fine. The maximum statutory penalty for conspiracy to manufacture, distribute and possess 1000 or more marijuana plants and distribution and possession with intent to distribute 1000 or more marijuana plants in violation of Title 21, United States Code, Section 841(a)(1) is from 10 years to life in prison and a fine of $10 million. The maximum statutory penalty for use of a firearm causing death is up to life in prison or death and a $250,000 fine. The maximum statutory penalty for use of a firearm during a drug trafficking offense or crime of violence is not less than five years up to life in prison and a $250,000 fine.  The maximum statutory penalty for felon in possession of ammunition is 10 years in prison and a $250,000 fine. 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.
 
 “I want to thank United States Attorney Melinda Haag and her office for their commitment to the safety and security of the people of Humboldt County and her partnership and collaboration in this and many other cases involving allegations of violence in our communities,” said Humboldt County District Attorney Paul Gallegos.
 
           William Frentzen and Randall Luskey of the Organized Crime Strike Force are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Lilian ArauzHasse, Marina Ponomarchuk, and Daniel Charlier-Smith.  The prosecution is the result of a joint investigation by the Federal Bureau of Investigation, Humboldt County District Attorney Paul Gallegos and his Office, Humboldt County Sheriff’s Office, United States Marshals,  California Department of Justice, Eureka Police Department, Humboldt County Drug Task Force and California Highway Patrol.  
 
           Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Wilde must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                                         CONTACT:  JACK GILLUND February 29, 2012                                                                                                                               (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                                                   Jack.Gillund@usdoj.gov
                                               
            SAN FRANCISCO - A federal grand jury in San Francisco returned a 23-count indictment charging William Wise, formerly of Raleigh, North Carolina, and Jacquline Hoegel, of American Canyon, California, with conspiracy, mail fraud, and wire fraud on February 21, 2012, United States Attorney MELINDA HAAG announced.  In addition to those charges, Wise was also charged with money laundering, and Hoegel was charged with four counts of making and subscribing a false tax return, one count of obstruction, and one count of false statements.  These charges stem from Wise’s and Hoegel’s operation of a massive Ponzi scheme by which they marketed and sold fraudulent certificates of deposit (CDs) to more than 1,200 individuals who invested over $129.5 million to purchase the CDs.  As of March 2009, when the Securities and Exchange Commission shut down the scheme, CD purchasers had lost more than $75 million. 
 
            According to the indictment, William Wise, 62, and Jacquline Hoegel, 55, are alleged to have operated a long-running scheme to sell CDs issued by three entities – Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust.  Millennium Bank was a bank licensed in St. Vincent and the Grenadines, and was represented to be a wholly-owned subsidiary of United Trust of Switzerland, which was purportedly a private financial services company in Switzerland.  CD purchasers were told that Sterling Bank and Trust was an international private bank managed and administered in Switzerland.  Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust were all controlled by Wise, with Hoegel as his second-in-command.  Hoegel ran the Napa, California, office where most CD purchasers sent their funds, and from which the CDs were administered.    
 
            The CDs issued by issued by Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust all promised CD purchasers guaranteed rates of return – sometimes over 16% – that were allegedly based on overseas investments.  In fact, CD purchasers’ funds were not used for overseas investments that generated the promised returns; the funds were instead used to enrich Wise and Hoegel and to make interest payments to earlier CD purchasers. 

            The indictment was unsealed today, after the arrest and initial appearance of Jacquline Hoegel before Magistrate Judge Carolyn Delaney in Sacramento, California.  She was released on bond.  Ms. Hoegel’s next appearance will be on March 6, 2012, before the Honorable Elizabeth D. Laporte.  William Wise, a Canadian citizen, is believed to be in Canada, and a warrant for his arrest has been issued. 
 
            These criminal charges follow a civil suit filed by the Securities and Exchange Commission in U.S. District Court in Texas. 
 
            The maximum statutory penalty for each count of conspiracy, mail fraud, and wire fraud, in violation of 18 U.S.C. §§ 1341, 1343, and 1349, is 30 years, a fine of $1 million, and restitution.  The maximum statutory penalty for money laundering, in violation of 18 U.S.C. § 1957, is 10 years, a fine of $250,000, and restitution.  The maximum statutory penalty for each count of obstruction and making a false statement, in violation of 18 U.S.C. §§ 1505 and 1001, is 5 years and a fine of $250,000.  The maximum statutory penalty for each count of making and subscribing a false tax return is 3 years, a fine of $100,000, and restitution.  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 prosecution is the result of a lengthy investigation by the IRS-Criminal Investigations Division and FBI. and is the result of a joint investigation by the United States Attorney’s Office for the Northern District of California and the United States Attorney’s Office for the Eastern District of North Carolina.  In San Francisco, Tracie L. Brown is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth and Beth Margen.  In Raleigh, North Carolina, Evan Rikhye is the Assistant U.S. Attorney who is prosecuting the case.
 
            This prosecution is also part of 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. For more information on the task force, visit www.StopFraud.gov.
 
            Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Wise and Ms. Hoegel must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 28, 2012                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

 
Company grossed millions based on six years of fraud

 
            SAN FRANCISCO -  Peter Townsley pleaded guilty in federal court in San Francisco on February 22, 2012, to two counts of fraud in connection with the sale of fertilizer to organic farmers, United States Attorney MELINDA HAAG announced.
 
            In pleading guilty, Mr. Townsley admitted that while he was operating his business, California Liquid Fertilizer (“CLF”), in the Salinas Valley, he engaged in a scheme to defraud his organic farmer customers by misrepresenting the true ingredients in  CLF’s fertilizer, Biolizer XN.  CLF marketed Biolizer XN as an organic fertilizer that was approved for use in organic agriculture.  In entering his guilty pleas, Mr. Townsley admitted that from April 2000 through December 2006, he sold Biolizer XN with a label that claimed it was approved for use in organic farming when it actually contained chemical ingredients that were prohibited for use in organic farming.  During that period, CLF realized over $6.5 million in gross sales from the sale of Biolizer XN. 
 
            According to the plea agreement, Congress enacted the Organic Foods Production Act in 1990 in order to establish national standards governing the production and marketing of certain agricultural products as “organic.”  The United States Department of Agriculture subsequently enacted federal regulations governing organic agricultural production under the National Organic Program (“NOP”).  The NOP specifically regulated, among other things, what materials organic farmers could use in production, including what materials could be applied to the soil as fertilizer.
 
            Farmers can determine whether a fertilizer is suitable for use in organic production by checking the ingredients on the label.  Farmers can also check to see if the fertilizer itself has been approved by the Organic Materials Review Institute (“OMRI”).  OMRI is a non-profit organization that provides independent review of materials to determine their suitability for use in the production, processing, and handling of products marketed as “organic.” If OMRI approves a fertilizer, the manufacturer is permitted to market its product as “OMRI Listed.”
 
            According to the plea agreement, Mr. Townsley applied for OMRI approval of  Biolizer XN in 1998 and told OMRI that the fertilizer was made of fish, fish by-products, feathermeal, and water.  OMRI, thereafter, approved Biolizer XN for use in organic production.  Mr. Townsley admitted that by April 2000, he had changed the ingredients in Biolizer XN to a product containing ammonium chloride, a material prohibited from use in organic agriculture.  He did not notify OMRI of this change, falsely told OMRI that nothing had changed in Biolizer XN’s formulation when it was time for the annual renewal of Biolizer XN’s OMRI-approved listing, and continued to market Biolizer XN to organic farmers as an OMRI-approved product containing fish and feathermeal when he knew that neither of those facts was true.
 
            Mr. Townsley further admitted that by June 2001, he had again changed the formulation of Biolizer XN to include a different prohibited ingredient, ammonium sulfate.  Once again, he did not inform OMRI of this change, continued to certify to OMRI that the formulation had not changed from the information he originally submitted to OMRI, and continued to market and sell Biolizer XN to organic farmers as an OMRI- approved product that contained fish and feathermeal.  Mr. Townsley admitted that he knew these representations to CLF’s customers were false when he made them and that by deceiving his customers, he was able to ensure continued sales of Biolizer XN to organic farmers. 
 
            Mr. Townsley, 50, a citizen of Canada, was originally indicted by a federal Grand Jury on June 1, 2010, and a Superseding Indictment was filed on July 7, 2011.  In the Superseding Indictment, Mr. Townsley was charged with one count of conspiracy to commit mail fraud in violation of Title 18, United States Code, Section 1349, and seven counts of mail fraud in violation of Title 18, United States Code, Section 1341.  Mr. Townsley pleaded guilty to two counts of mail fraud based on his mailing of renewal certifications to OMRI in 2005 and 2006. 
 
            The sentencing of Mr. Townsley is scheduled for June 13, 2012, before Judge Charles R. Breyer in San Francisco.  The maximum statutory penalty for each violation of Section 1341 is 20 years imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.  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 the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco.  The prosecution is the result of a two-year investigation by the United States Department of Agriculture’s Office of Inspector General – Investigations and the Federal Bureau of Investigation.  The United States Attorney’s Office acknowledges the significant effort devoted to the investigation of this matter by the California Department of Food and Agriculture. 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND
February 22, 2012                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
SAN JOSE, Calif. – Elsa Lorena Solares of San Jose was charged yesterday by a federal grand jury in San Francisco with 29 counts of willfully attempting to evade and defeat part of the employment tax due by her clients, United States Attorney Melinda Haag and Special Agent in Charge, IRS Criminal Investigation, Marcus Williams announced.
            According to the indictment, Solares owned and operated a payroll service named JC 101 Services located in Mountain View, Calif.  As part of her services, Solares calculated each client’s payroll liabilities and the employment and unemployment tax due and owing to the IRS.  Solares also obtained funds, from her clients, in the amount of the employment and unemployment taxes due to the IRS and agreed to pay over those funds to the IRS. 
 
            The indictment further alleges that, in the 29 counts charged, Solares calculated the quarterly employment tax due for at least seven clients.  She collected those amounts from her clients then failed to file tax returns reporting the tax due and failed to pay the money over to the United States.  
 
            A warrant has been issued for Solares’ arrest.
 
            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 Newman 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 with the assistance of the Mountain View Police Department.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 21, 2012                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

            SAN FRANCISCO – A federal jury in San Diego found Eric Anthony Lopez guilty of delivering a threatening communication to United States District Court Judge Irma E. Gonzalez of the Southern District of California, United States Attorney Melinda Haag announced.  Because the U.S. Attorney’s Office for the Southern District of California was recused from the case, the case was prosecuted by the U.S. Attorney’s Office for the Northern District of California. 
 
            Lopez, who is serving a 25-year-to-life sentence in California prison after being convicted of first-degree murder in 2003, was convicted after a two-day jury trial in San Diego last week of a violation of Title 18, United States Code, Section 876(c).  Lopez sent a letter to Judge Gonzalez, threatening to “bring death” to her and “eliminate” her by introducing the judge to “Your Grim Reaper ‘Old Bacill[u]s Anthracis’ aka Anthrax.”
 
            The sentencing of Lopez is scheduled for May 14, 2012, before U.S. District Court Judge Larry Burns in San Diego.  The maximum statutory penalties for a violation of 18 U.S.C. § 876(c) are:  10 years in prison; three years of supervised release; 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.
 
            Richard Cheng and Christina McCall are the Assistant U.S. Attorneys who are prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 16, 2012                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 Seventh MS-13 member to receive life sentence in San Francisco
 
SAN FRANCISCO –Danilo Velasquez, aka “Triste”, a local leader of La Mara Salvatrucha, or MS-13, was sentenced yesterday in federal court in San Francisco by U.S. District Judge William H. Alsup to life in prison, announced U.S. Attorney Melinda Haag,  Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, and Director John Morton of U.S. Immigration and Customs Enforcement (ICE).  Velasquez was convicted in November 2011 by a federal jury of racketeering-related charges. At sentencing, Judge Alsup described the defendant as a “vicious murderer.”
 
Velasquez was 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. Velasquez joined the “20th Street” clique, or local MS-13 chapter, in 2004. Since its inception, MS-13 members have warred with rival gang members and sought to extort payments from other criminals in its territory. When the federal government indicted the majority of the 20th Street clique members on Oct. 22, 2008, Velasquez assumed leadership on the streets. The evidence presented at trial showed how Velasquez, 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.
 
During Velasquez’s trial, the government presented evidence of multiple murders committed by MS-13 members in 2008. Several of the victims were not involved in gangs or any illegal activity, including a 14-year-old, but were mistaken to be rival gang members by MS-13 members. 
 
The evidence at trial showed that on Feb. 19, 2009, Velasquez and fellow gang members Luis Herrera, aka “Killer” and Jaime Balam, aka “Tweety”, went looking to kill rival gang members in the San Francisco Bay area.  In the Excelsior District of San Francisco, they spotted a car of young Latino professionals - two were college graduates of UC Berkeley, one a law student at UC Hastings, one a bank employee, and another a student at City College in San Francisco who was working his way through school at the time.  According to evidence presented at trial, these victims were targeted because some of the men wore baseball caps in colors associated with rival gang members. None of the victims were gang members themselves.
 
Herrera, Velasquez and Balam followed the victims’ car into Daly City, boxed the car in at a red light, whereupon Velasquez and Balam flanked the victims’ car carrying semi-automatic handguns and began shooting.  By the time they finished firing, they had severely wounded two of the passengers and murdered a third passenger, Moises Frias Jr. Frias, who was 21-years-old, suffered nine gunshot wounds, including several to the head.  He died en route to the hospital. 
 
Herrera pleaded guilty mid-trial 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 and murdered Frias. Herrera was sentenced on Jan. 24, 2012, to 35 years in prison. Balam remains a fugitive.
 
Velasquez’s trial was the second of three consecutive federal trials of members of the 20th Street clique of MS-13. Six of Velasquez’s fellow MS-13 gang members were convicted in August 2011 after a five-month trial that involved more than 150 witnesses. The six gang members - Marvin Carcamo, aka “Psycho”; Angel Noel Guevara, aka “Peloncito”; Erick Lopez, aka “Spooky”; Moris Flores, aka “Slow Pain”; Jonathan Cruz-Ramirez, aka “Soldado”; and Guillermo Herrera, aka “Sparky” and Luis Herrera’s brother - were each sentenced to life in prison in December 2011. 
 
Today, a federal jury convicted the sole defendant in the third trial, Manuel Franco, aka “Dreamer,” on one count of violent crime in aid of racketeering (VICAR) conspiracy. 
 
           These cases were prosecuted by Assistant U.S. Attorneys Wilson Leung, Wil Frentzen, Derek Owens, 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.  These cases were investigated by Daly City Police Department, San Francisco Police Department and ICE Homeland Security Investigations.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 16, 2012                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 

Horizon Lines LLC to pay $1.5 million for years of dumping by one of its ships

 
            SAN FRANCISCO - Horizon Lines, LLC was sentenced Tuesday in front of the Honorable Richard Seeborg after pleading guilty to felony charges concerning violations of international and national oil pollution laws that occurred on a large container ship called the S/S Horizon Enterprise, United States Attorney Melinda Haag announced. As part of a plea agreement, the company was ordered to pay $1,500,000, with $500,000 of the monies going to environmental projects in the San Francisco Bay area.
 
            Horizon Lines pled guilty to two counts of making false statements based on their knowing failure to maintain an accurate Oil Record Book in which all transfers and discharges of oil and oily waste are required to be recorded.
 
            “Horizon’s intentional tampering with its pollution control equipment showed a blatant disregard for the environment,” U.S. Attorney Haag said.  “This case demonstrates our commitment to enforcing U.S. and international oil pollution laws to protect our natural resources.”
 
            According to the plea agreement, engineers aboard the S/S Horizon Enterprise intentionally tricked pollution control equipment that would otherwise ensure oily waste does not go overboard.  This created the possibility that oily waste could be released into the ocean.  To disguise this conduct from the U.S. Coast Guard, who is charged with inspecting ships to ensure compliance with U.S. and international oil pollution laws, engineers made false entries in the ship’s Oil Record Book which gave the false impression that the ship’s pollution control equipment had been operated properly when they knew it had not.  Horizon Lines admitted that similar conduct had occurred on board this ship going back several years.
 
            In addition to paying the $1 million fine and $500,000 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 on the S/S Horizon Lines or any other vessel in the company’s fleet.

            “We are pleased this case has been resolved, but even more satisfied to hear the company is taking steps to prevent any further incidents of pollution,” said Capt. Cynthia Stowe, the Coast Guard Captain of the Port of San Francisco.  “U.S. Coast Guard inspectors and investigators are hard at work each and every day inspecting ships for compliance with environmental protection laws and regulations.  When violations are found, we will continue to work closely with our partners to ensure violators are brought to justice and steps are taken to protect and restore the maritime ecosystems and natural resources important to the environmental and economic health of our nation and coastal communities.”
 
            The case was prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco.  The prosecution is the result of an investigation by the United States Environmental Protection Agency’s Criminal Investigative Division and United States Coast Guard Investigative Services.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 16, 2012                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
            SAN JOSE, Calif. – Antonio Bates was sentenced yesterday to 15 years in prison, for his aggravated sexual abuse of a child under 12, United States Attorney Melinda Haag announced.
 
            Bates pleaded guilty on May 18, 2011, to aggravated sexual abuse of a child under 12, in violation of 18 U.S.C. § 2241(c).  According to the plea agreement, Bates admitted to sexually abusing his step-daughter while they lived on military bases at Fort Riley, Kan., in Germany, and Fort Hunter-Liggett, in Monterey, Calif., from approximately 1990 through July 1996.   
           
            Bates, 46, from Anchorage, Alaska, was indicted by a federal grand jury on Nov. 17, 2010.  On April 20, 2011, the grand jury returned a Superseding Indictment, containing 11 counts.  Bates was charged with sexually abusing his minor step-daughter while they lived at Fort Hunter-Liggett from 1994 through July 1996.
 
            The FBI initiated the investigation when the victim notified the Anchorage, Alaska Police Department of the abuse, more than 10 years after the sexual abuse ended.
 
            “Our office takes sexual abuse crimes, particularly those against children, very seriously,” U.S. Attorney Haag said.  “We are grateful that the victim came forward and hope this lengthy sentence brings her some measure of relief.”
 
            The sentence was handed down by U.S. District Court Judge Lucy H. Koh, following a guilty plea to count three of the Superseding Indictment, aggravated sexual abuse with child under 12, in violation of 18 U.S.C. § 2241(c).   Judge Koh also sentenced the defendant to a five-year period of supervised release, registration as a sex offender, and ordered the defendant to pay the victim $26,444 in restitution.  The defendant, in custody since his arrest in November 2010, begin serving his sentence immediately.
 
            Grant Fondo and Amber Rosen are the Assistant United States Attorneys who prosecuted the case with the assistance of legal assistants Kamille Singh and Jeanne Carstensen, and Victim/Witness Specialist Deborah Kusber.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Anchorage, Alaska Police Department. 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 9, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 

Defendant and father sentenced for submitting false borrowing reports to Comerica

 
            SAN JOSE, Calif. – Ned Roscoe was sentenced yesterday to five years in prison, and his father John Roscoe was sentenced to five years probation with 12 months home detention, United States Attorney Melinda Haag announced.  Ned and John Roscoe were former owners and officers of Cigarettes Cheaper!, which at its height had nearly 800 retail stores nationwide and $1 billion in annual revenue.        
 
            Following a month-long jury trial, Ned Roscoe, 51, of Fairfield, Calif., was convicted on Feb. 22, 2011, of all 28 charges.  During the trial, evidence showed that Ned Roscoe had conspired to defraud and make false statements to Comerica Bank, committed 13 acts of bank fraud, and made 13 false statements to Comerica Bank when he knowingly submitted weekly borrowing base reports of inventory to Comerica from Aug. 22, 2003, through Nov. 14, 2003, with inflated inventory valuations, eventually inflating the inventory by more than $16 million.  The jury also found that Ned Roscoe had caused an additional false statement be made to Comerica Bank when he directed an employee to falsely explain the cause of the inventory inflation.  U.S. District Court Judge Ronald M. Whyte, who sentenced Ned Roscoe, found that Ned Roscoe’s actions caused a loss to the bank of more than $10.7 million.
           
            John Roscoe, 82, of Green Valley, Calif.  pleaded guilty on Jan. 21, 2011, to conspiracy to make false statements to Comerica Bank.  According to the plea agreement, John Roscoe admitted that from Aug. 22, 2003, through Nov. 24, 2003, Ned Roscoe intentionally prepared, or caused to be prepared, falsely inflated valuations of Company inventory reported to Comerica, that John Roscoe agreed with Ned Roscoe that he prepare, or cause to be prepared, these borrowing base reports, and that John Roscoe agreed that they be submitted to Comerica Bank.  John Roscoe further admitted that he was aware that an employee was directed to falsely explain the cause of the inventory inflation. 
           
            The Federal Bureau of Investigation initiated its investigation in 2004 after a referral from Comerica Bank.  Ned and John Roscoe were indicted by a federal grand jury on June 16, 2007.  On Sept. 30, 2011, the grand jury returned a second superseding indictment, containing 28 counts.   
 
            The sentences were handed down by Judge Whyte, who also sentenced Ned Roscoe to a five year period of supervised release.  Ned Roscoe is scheduled to begin serving his sentence on March 21, 2012.  John Roscoe will begin serving his sentence immediately.  Judge Whyte scheduled a hearing for March 5, 2012, to determine the amount of restitution Ned and John Roscoe will have to pay to Comerica.
 
            Eumi Choi and Grant Fondo are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kamille Singh.  The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation. 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 9, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
                                                                                                           

Victim-Investors Lost Homes, Retirement Savings, and Children’s College Education Funds as a result of David Prince’s Fraud

 
           SAN FRANCISCO – David Boyer Prince was sentenced yesterday to seven years in prison and ordered to pay restitution on investment fraud related charges, United States Attorney Melinda Haag announced.
 
            Following a three week trial, a federal jury on Oct. 5, 2011, convicted David Boyer Prince, 49, an attorney from Saratoga, Calif., of five counts of wire fraud in violation of Title 18, United States Code, Section 1343.  The jury did not reach a verdict on two other wire fraud counts with which Prince was charged.  Evidence at trial showed that Prince carried out an investment fraud scheme from August 2005 to January 2007, in which he defrauded more than 30 victims of $1.1 million. Prince recruited investors to invest in two investment funds—MJE Invest! and the Leopard Fund.  Prince lied to investors by promising them that their principal would be guaranteed, by assuring them that they would receive rates of return as high as five to 25 percent a month, by promising them their money would be invested in the stock market and by reassuring them about the legality of his investment funds because he is an attorney.  Prince also made false statements to the Texas State Securities Board regarding his investment activities.  Ultimately, Prince lost most of the investors money through risky options trading.  Evidence at trial showed that Prince intentionally used investor money to make payments to prior investors. Prince also converted investors’ funds into cash and for his personal use, such as credit card payments and the leasing of a Mercedes automobile.   
 
Evidence at sentencing showed that Prince’s fraud caused some of his investors to lose their homes, their children’s college education funds, and their chance of retirement.  In sentencing Prince, United States District Court Judge Charles R. Breyer emphasized Prince’s attorney status and the extremely vulnerable nature of his victims as aggravating factors in imposing his sentence.  Judge Breyer also sentenced the defendant to a three-year period of supervised release.  Judge Breyer ordered Prince to self-surrender by 4 p.m. yesterday to begin serving his sentence.
 
           Assistant United States Attorneys Joseph Fazioli and Allison Danner prosecuted the case with the assistance of Legal Assistants Kamille Singh and Nina Williams and Paralegal Specialists Alycee Lane and Lakisha Holliman.  The prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 8, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 
SAN FRANCISCO – On Tuesday, over 900 officers and agents executed arrest and search warrants in a large-scale takedown of individuals involved in narcotics trafficking and gang activity in the Bay Area, announced United States Attorney Melinda Haag; Stephanie Douglas, Special Agent in Charge of the FBI in San Francisco; Chief Ronald L. Davis of East Palo Alto Police Department; and Chief Bryan Roberts of Menlo Park Police Department.
 
Local, state and federal officers – including FBI SWAT Teams from San Francisco, Los Angeles, Sacramento, Portland, Phoenix and Las Vegas; officers from East Palo Alto and Menlo Park police departments –executed over 30 search warrants and arrested 27 and seized significant quantities of money, drugs, firearms, and several vehicles in “Operation Phallen Gardens”.  The majority of the arrests and searches occurred in the East Palo Alto and Menlo Park areas. 
 
The following individuals were taken into custody based upon federal charges and made their initial appearance earlier today in federal court in San Francisco:
 
Frederick Anderson, Jr., 53
Michael Barnes, 54
Dedeaux Maurice Brown, 37
Monique Burns, 38
Caezarine Kilo Donelson, 41
Veronica Elliot, 30
Fred Lamar Finney, 27
Annette Hamilton, 48
Elizabeth Head, 50
Bobby Lee Jones, Jr., 51
John Allen Keller, Jr., 24
Cristian Rios Mora, 19
Donald Poston, 36
John Wayne Price, 37
Prince Lee Prince, Jr., 38
Leslie Reese, 52
Donnell Robinson, 37
Jesus Segura, 31
Frederick Sims, 54
Stephanie Yvonne Smith, 54
Cellie Sturns, 53
Dustin Thomas, 25
Willie Charles White, 49
Benjamin Lee Williams, 55
Joseph Earl Lamont Williams, 30
Raymond Williams, 25 J. Jesse Ochoa Garcia, 41
 
The following individuals remain fugitives:
 
Tony Giovanni Joseph, 30
Derrick Lane, 39
Shawn Curtis McKnight, 49
Charles Edward Menifee, III, 20
Jesus Segura, 31
Joey Earl Williams, 48
 
The individuals were indicted by a federal grand jury or charged via criminal complaint for various narcotics trafficking related charges throughout the Bay Area. 
 
“This operation demonstrates the results that can be achieved when federal and community law-enforcement partners work together,” U.S. Attorney Haag said.  “Members of the San Francisco Safe Streets Task Force put their lives on the line every day to help make the Northern District of California a safe, productive and beautiful place to live.”
 
Operation Phallen Gardens is the result of a two-year, Organized Crime and Drug Enforcement Task Force (OCDETF) and San Francisco Safe Streets Task Force investigation.  The focus was on an associated group of individuals who supplied drugs, which included cocaine and methamphetamine, to multiple gangs in the area of East Palo Alto and Menlo Park. 
 
“This operation highlights how effective and important our task forces are in combating violent crime in our communities,” said Special Agent in Charge Stephanie Douglas of FBI San Francisco.  “The FBI and our local, state, and federal law enforcement partners are committed to working together to target those involved in gang activity and narcotics trafficking.” 
 
“This operation resulted in a significant blow against the scourge of gangs, drugs and violence in our communities,” said East Palo Alto Chief Ronald Davis.  “As gangs evolve and grow beyond jurisdictional boundaries, local, state and federal law enforcement agencies must collaborate and use our shared resources to effectively disrupt their activities and stem the violence.”
 
“Task forces of this nature are a crucial component for local law enforcement to effectively address violent crime and narcotic trafficking in their communities,” said Menlo Park Police Chief Bryan Roberts.  “These partnerships are a force multiplier for our operations.”
 
The OCDETF Program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations.  The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
 
The San Francisco Safe Streets Task Force consists of FBI agents, and police officers from East Palo Alto Police Department and Menlo Park Police Department.  This task force was established in 1996 as a part of the FBI Safe Streets Violent Crimes Initiative, which seeks to target violent crimes through coordinated investigations.
 
The United States Attorney’s Office of the Northern District of California, FBI San Francisco, East Palo Alto Police Department, and the Menlo Park Police Department thank the following agencies for their assistance during the operation: FBI Field Offices in Los Angeles, Sacramento, Portland, Phoenix, and Las Vegas; the United States Marshal Service; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; California Highway Patrol, San Mateo County Sheriff’s Office, Mountain View Police Department, Newark Police Department, Redwood City Police Department, Sunnyvale Police Department, Oakland Police Department, Stockton Police Department, Fremont Police Department, Santa Clara Police Department and Palo Alto Police Department.    
 
Please note, an indictment contains only allegations and as in all cases, the 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 February 8, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
  

U.S. Citizens Alleged to Have Conveyed Valuable DuPont Technology to Companies Controlled by the Government of the People’s Republic of China
 

SAN FRANCISCO – A federal grand jury in San Francisco has charged five individuals and five companies with economic espionage and theft of trade secrets for their roles in a long-running effort to obtain U.S. trade secrets for the benefit of companies controlled by the government of the People’s Republic of China (PRC), announced United States Attorney Melinda Haag; Lisa Monaco, Assistant Attorney General for National Security at the Department of Justice; and Stephanie Douglas, Special Agent in Charge of the FBI San Francisco Division.
 
According to the superseding indictment, the government of the PRC identified as a priority the development of chloride-route titanium dioxide (TiO2) production capabilities.  TiO2 is a commercially valuable white pigment with numerous uses, including coloring paint, plastics, and paper.  To achieve that goal, companies controlled by the PRC government, specifically the Pangang Group companies named in the superseding indictment, and employees of those companies conspired and attempted to illegally obtain TiO2 technology that had been developed over many years of research and development by E.I. du Pont de Nemours & Company (DuPont).
 
According to the superseding indictment, the Pangang Group companies were aided in their efforts by individuals in the United States who had obtained TiO2 trade secrets and were willing to sell those secrets for significant sums of money.  Defendants Walter Liew, Christina Liew, Robert Maegerle, and Tze Chao obtained and possessed TiO2 trade secrets belonging to DuPont.  Each of these individuals allegedly sold information containing DuPont TiO2 trade secrets to the Pangang Group companies for the purpose of helping those companies develop large-scale chloride route TiO2 production capability in the PRC, including a planned 100,000 ton TiO2 factory at Chongqing, PRC.
 
According to the superseding indictment, the Liews, USA Performance Technology, Inc. (USAPTI), and one of its predecessor companies, Performance Group, entered into contracts worth in excess of $20 million to convey TiO2 trade secret technology to Pangang Group companies.  The Liews allegedly received millions of dollars of proceeds from these contracts.  The proceeds were wired through the United States, Singapore, and ultimately back into several bank accounts in the PRC in the names of relatives of Christina Liew.
 
The five individuals charged in the indictment are:
 
·         Walter Lian-Heen Liew (aka Liu Yuanxuan), 54, of Orinda, Calif.  Mr. Liew is a naturalized U.S. citizen and co-owner of USAPTI.  Mr. Liew is charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, attempted economic espionage, attempted theft of trade secrets, possession of trade secrets, conveying trade secrets, conspiracy to obstruct justice, witness tampering, conspiracy to tamper with evidence, and false statements.  Mr. Liew was charged in August 2011 with obstruction of justice and making false statements to the FBI.  He was arrested at that time and has been ordered detained pending trial based on a finding by Magistrate Judge Nathanael Cousins that he is a flight risk.  Mr. Liew’s next scheduled court appearance is before the Honorable Jeffrey S. White on Feb. 9, 2012, at 2:00 pm.
·         Christina Hong Qiao Liew (aka Qiao Hong), 49, of Orinda, Calif.  Mrs. Liew is a naturalized U.S. citizen and co-owner with her husband, Walter Liew, of USAPTI. Mrs. Liew is charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, attempted economic espionage, attempted theft of trade secrets, witness tampering, conspiracy to tamper with evidence, and false statements.  Mrs. Liew also was charged in August 2011 with obstruction of justice and making false statements to the FBI.  She was released by the court on conditions that include travel restrictions and electronic monitoring.   Mrs. Liew’s next scheduled court appearance is before the Honorable Jeffrey S. White on Feb. 9, 2012, at 2:00 pm.
·         Hou Shengdong, 42, a citizen of the PRC.  Hou was the vice director of the Chloride Process TiO2 Project Department for the Pangang Group Titanium Industry Company, Ltd.  According to the superseding indictment, Hou and other Pangang Group employees requested DuPont blueprints as a condition of working on the Pangang Group project.  Hou is charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, and attempted economic espionage.  A warrant has been issued for Hou’s arrest.
·         Robert Maegerle, 76, of Harbeson, Del.  Maegerle was employed by DuPont as an engineer from 1956 to 1991.  According to the superseding indictment, Maegerle had access to DuPont TiO2 trade secrets, including specific information regarding DuPont’s TiO2 facility at Kwan Yin, Taiwan.  Maegerle is charged with conspiracy to commit theft of trade secrets, attempted theft of trade secrets, conveying trade secrets, and conspiracy to obstruct justice.  Maegerle was arrested this morning in Harbeson, Del.
·         Tze Chao, 77, of Newark, Del.  Chao was employed by DuPont from 1966 to 2002.  Chao is charged with conspiracy to commit economic espionage.  Chao was served with a summons to appear in court in San Francisco on March 1, 2012, at 9:30 am for arraignment on the superseding indictment.
The superseding indictment also names five companies as defendants:
 
·         Pangang Group Company, Ltd. (Pangang Group).  Pangang Group is a state-owned enterprise controlled by the State-Owned Assets Supervision and Administration Commission of the PRC State Council and located in Sichuan Province, PRC.
·         Pangang Group Steel Vanadium & Titanium Company, Ltd. (PGSVTC).  PGSVTC is a subsidiary of the Pangang Group.
·         Pangang Group Titanium Industry Company, Ltd.  Pangang Group Titanium is a subsidiary of PGSVTC and was the entity directly responsible for constructing the 100,000 ton chloride-route TiO2 factory at Chongqing, PRC.  Pangang Group Titanium entered into an agreement with USAPTI in 2009 under which USAPTI conveyed DuPont TiO2 technology to Pangang Group Titanium and its employees.
·         Pangang Group International Economic & Trading Co. (PIETC).  PIETC is a subsidiary of PGSVTC and is responsible for financial matters related to the construction of the Chongqing TiO2 factory.  PIETC signed a 2009 agreement with USAPTI under which DuPont technology was transferred.
·         USA Performance Technology, Inc. (USAPTI).  USAPTI is an Oakland, California-based engineering consulting company owned and operated by Walter and Christina Liew.  According to the superseding indictment, USAPTI succeeded two other companies owned by the Liews -- Performance Group USA and LH Performance -- which also were used in the conspiracy to convey DuPont trade secrets to PRC-based companies.
Each of the five corporate defendants named in the superseding indictment are charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, and attempted economic espionage.  Summonses were issued to each corporate defendant requiring them to appear in court in San Francisco on March 1, 2012, at 9:30 am for arraignment on the superseding indictment.
 
DuPont is a company based in Wilmington, Del., that manufactures a wide variety of products, including TiO2.  DuPont invented the chloride-route process for manufacturing TiO2 in the late-1940s and since then has invested heavily in research and development to improve that production process.  The global titanium dioxide market has been valued at roughly $12 billion, and DuPont has the largest share of that market.
 
The chloride-route process is more efficient and cleaner than the sulfate-route process prevalent in the PRC.  The superseding indictment alleges that the object of the defendants’ conspiracy was to convey DuPont’s secret chloride-route technology to the PRC companies for the purpose of building modern TiO2 production facilities in the PRC without investing in time-consuming and expensive research and development.
 
DuPont reported information to the FBI that its TiO2 trade secrets had been misappropriated.  The FBI opened an investigation in March 2011.
 
“As today’s case demonstrates, technology developed by U.S. companies is vulnerable to concerted efforts by competitors – both at home and abroad – to steal that technology,” U.S. Attorney Haag said.  “Fighting economic espionage and trade secret theft is one of the top priorities of this Office and we will aggressively pursue anyone, anywhere who attempts to steal valuable information from the United States.”
 
Assistant Attorney General Monaco said:  “The theft of America’s trade secrets for the benefit of China and other nations poses a substantial and continuing threat to our economic and national security, and we are committed to holding accountable anyone who robs American businesses of their hard-earned research.  I thank the agents and prosecutors who helped bring about this important case.”
 
FBI Special Agent-in-Charge Stephanie Douglas stated: “The conduct alleged in the superseding indictment reveals a methodical effort by foreign interests to misappropriate valuable U.S. technology by using individuals operating within our borders.  The goal of this scheme was to obtain the benefit of research and development investments by U.S. companies, without making the same investment of time and money.  This is not only unfair, but it does great damage to the U.S. economy and as a result undercuts on national security.  The FBI is committed to rooting out commercial espionage that puts U.S. companies at a disadvantage in the global market.”
 
The maximum statutory penalty for each of the charges alleged in the superseding indictment is as follows:
 
·         Count One, conspiracy to commit economic espionage, in violation of 18 U.S.C. § 1831(a)(5):  15 years imprisonment, $500,000 fine, and restitution.  The fine for an organizational defendant is not more than the greatest of $10,000,000 or twice the pecuniary gain or loss.
·         Count Two, conspiracy to commit theft of trade secrets, in violation of 18 U.S.C. § 1832(a)(5):  10 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.   The fine for an organizational defendant is not more than the greatest of $5,000,000 or twice the pecuniary gain or loss.
·         Count Three, attempted economic espionage, in violation of 18 U.S.C. § 1831(a)(2) & (4):  15 years imprisonment, $500,000 fine, and restitution.   The fine for an organizational defendant is not more than the greatest of $10,000,000 or twice the pecuniary gain or loss.
·         Count Four, attempted economic espionage, in violation of 18 U.S.C. § 1831(a)(3) & (4):  15 years imprisonment, $500,000 fine, and restitution.  The fine for an organizational defendant is not more than the greatest of $10,000,000 or twice the pecuniary gain or loss.
·         Count Five, attempted theft of trade secrets:, in violation of 18 U.S.C. § 1831(a)(2) & (4):  10 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.  The fine for an organizational defendant is not more than the greatest of $5,000,000 or twice the pecuniary gain or loss.
·         Counts Six and Seven, possession of trade secrets: in violation of 18 U.S.C. § 1832(a)(3):  10 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.  The fine for an organizational defendant is not more than the greatest of $5,000,000 or twice the pecuniary gain or loss.
·         Count Eight, conveying trade secrets, in violation of 18 U.S.C. § 1832(a)(2):  10 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.  The fine for an organizational defendant is not more than the greatest of $5,000,000 or twice the pecuniary gain or loss.
·         Count Nine, possession of trade secrets, in violation of 18 U.S.C. § 1832(a)(3):  10 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.  The fine for an organizational defendant is not more than the greatest of $5,000,000 or twice the pecuniary gain or loss.
·         Count Ten, conspiracy to tamper with witnesses and evidence: in violation of 18 U.S.C. § 1512(k):  20 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.
·         Counts Eleven and Twelve, witness tampering: in violation of 18 U.S.C. § 1512(b)(1):  20 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.
·         Count Thirteen, conspiracy to tamper with evidence: in violation of 18 U.S.C. § 1512(k):  20 years imprisonment, $250,000 fine or twice the gross gain or loss, and restitution.
·         Count Fourteen, false statements in a matter within the jurisdiction of the executive branch: in violation of 18 U.S.C. §§ 1001(a)(2) & 2:  5 years imprisonment, $250,000 fine, and restitution.
The case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco, and the Counterespionage Section of the U.S. Department of Justice in Washington, D.C.  The investigation, which is on-going, is being conducted by the FBI.
 
Please note, an indictment contains only allegations and, as in all cases, the 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 February 7, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

Defendants plead guilty to Conspiracy to Commit Bank Fraud and Wire Fraud, Money Laundering, Tax Evasion, and Harboring an Illegal Alien

 
            OAKLAND, Calif. –  Edith Nelson, Ronald Nelson, Nelda Asuncion and Cristeta Lagarejos pleaded guilty in federal court in Oakland on Feb. 3, 2012, to charges relating to a far-reaching mortgage loan fraud scheme involving at least 20 properties in the Northern District of California and more than $20 million in loan proceeds, United States Attorney Melinda Haag, Acting Special Agent in Charge, IRS Criminal Investigation, Clarissa Balmaseda, and Special Agent in Charge, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Clark Settles announced.  Edith Nelson and Ronald Nelson also pleaded guilty to income tax evasion and harboring an illegal alien.
 
            In pleading guilty, Edith Nelson, 53, and Ronald Nelson, 76, a married couple, admitted to the facts set forth in their plea agreements, which include the following: The Nelsons owned and operated Placement Services, a referral service located in Pleasant Hill, Calif., that placed elderly people into residential care home facilities.  On or about Aug. 21, 1998, the State of California Department of Social Services ordered the immediate exclusion of Ronald Nelson and Edith Nelson (under her former name Edith Grutas) from all facilities licensed by the Department based upon various violations of licensing requirements.  Despite the exclusion order, the Nelsons continued to operate numerous residential care home facilities for the elderly and other properties in the identities of others used to purchase the properties (straw buyers).  As part of this scheme, at least 63 loans, totaling approximately $20,754,700 in loan proceeds, were obtained from financial institutions based on false and fraudulent representations.  Ronald and Edith Nelson maintained full control over the properties by directing the straw buyers to sign grant deeds that either transferred title of the property to Edith Nelson or added her name to the title on the property.  A number of straw buyers were instructed to open bank accounts that were then controlled by Ronald and Edith Nelson.
 
            In also pleading guilty, Nelda Asuncion, 68, a real estate agent and co-owner of Realty World Pacific West in Concord, Calif., and Cristeta Lagarejos, 49, a real estate agent and broker, and the owner of Legacy Financing in Pleasant Hill, admitted to joining the scheme to commit mortgage loan fraud with the Nelsons.  In furtherance of this scheme, mortgage loan applications were prepared in the names of straw buyers that contained materially false and fraudulent statements such as employment information and grossly inflated income and assets intended to enhance the likelihood that the mortgage lenders would approve the loan applications. Nelda Asuncion and Cristeta Lagarejos determined the qualifying income that the lenders required for approval of mortgage loans, and falsely placed that amount on the loan applications, instead of the straw buyers’ actual income. Nelda Asuncion sent faxes to Placement Services with a summary of the employment information fraudulently placed on the loan applications prepared by Realty World Pacific West. Edith Nelson then falsely corroborated the employment information placed on the loan applications when the lenders called to verify employment.
 
            As also set forth in their plea agreements, Ronald and Edith Nelson hired care givers, whom they knew were illegally present in the United States, to work at their numerous residential care home facilities for the elderly purchased through straw buyers, but which the Nelsons controlled.  The care givers worked long hours at less than minimum wage and often resided in the same facilities where they worked.  Many of the Nelsons’ illegal alien workforce were paid under the table in cash and did not pay taxes.  The Nelsons never reported any of their illegal alien employees to immigration authorities because their intent was to conceal them from detection.
 
            In their plea agreements, Ronald and Edith Nelson have agreed to pay restitution in the amount of $5,223,476.90, which includes restitution for lending institutions and other victims of the mortgage loan fraud, taxes owed based upon their income tax evasion, and back wages in the amount of $1,546,246.40 owed to the Nelsons’ employees and former employees as determined by the U.S. Department of Labor.  Nelda Asuncion has agreed to pay restitution in the amount of $2,838,868.54.  Cristeta Lagarejos has agreed to pay $318,500 in restitution.
 
            “We have all paid the price for mortgage loan fraud, which has had a devastating effect on the United States’ economy,” U.S. Attorney Haag said.   “The Department of Justice will continue to vigorously pursue and prosecute offenders of mortgage loan fraud and violators of immigration law as occurred in this significant case.”
 
            “IRS-CI takes mortgage fraud seriously.  The impact of these types of crimes cannot be overstated.  Fraud in the mortgage industry has played a major role in almost crippling this nation’s economy,” said Clarissa Balmaseda, Acting Special Agent in Charge, IRS-Criminal Investigation.  “IRS-CI is committed to pursuing individuals who commit this type of offense.”  “Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”
 
            “The defendants’ actions in this case were calculated and brazen,” said Clark Settles, Special Agent in Charge for ICE Homeland Security Investigations in San Francisco.  “They exploited their foreign workers; they exploited our nation’s legal immigration system; and they exploited the mortgage-lending process.   Fortunately, through our joint investigative efforts, we exposed this large-scale fraud scheme and now those involved will be held accountable for the considerable harm they caused.”
 
            The sentencing of all four defendants is scheduled for May 11, 2012, before Judge D. Lowell Jensen in Oakland. The maximum statutory penalty for conspiracy to commit wire fraud and bank fraud, in violation of 18 U.S.C. § 1349,  is 30 years in prison and a $1 million fine. The maximum statutory penalty for monetary transactions using criminally derived property, in violation of 18 U.S.C. § 1956(a), is 10 years in prison and a $250,000 fine.  The maximum statutory penalty for income tax evasion under 26 U.S.C. § 7201 is five years in prison and a $100,000 fine.  The maximum statutory penalty for harboring an illegal alien under 8 U.S.C. § 1324(a)(1)(A)(iii) is five years and a $250,000 fine.  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.
 
            Deborah Douglas is the Assistant United States Attorney who is prosecuting the case with the assistance of Paralegal Noble Hughes. The prosecution is the result of an extensive investigation by the IRS-Criminal Investigation, and U.S. Immigration and Customs Enforcement, Homeland Security Investigations.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND February 1, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 
            OAKLAND, Calif. – Emmanuel Odion Esezobor was sentenced yesterday to 18 months in prison and ordered to pay $39,973.62 in restitution for stealing public money and passing counterfeit U.S. obligations, United States Attorney Melinda Haag announced.
 
            Esezobor, 51 of Hayward, Calif., was convicted by a jury on Oct. 27, 2011, after a three-day trial on one count of theft of public money, in violation of 18 U.S.C. § 641, and seven counts of passing counterfeit U.S. obligations, in violation of 18 U.S.C. § 472.  During the trial, evidence showed that, in February and March 2011, Esezobor issued himself $13,800 worth of U.S. postal money orders and purported to pay for those money orders with counterfeit $100 bills.  The evidence further showed that Esezobor knew these bills were counterfeit and had passed similar counterfeit bills at his credit union in Hayward in November 2010.
 
            The sentence was handed down by U.S. District Court Judge Claudia Wilken.  At sentencing, Judge Wilken found that the defendant stole a total amount of $43,500 from the Alamo Post Office.  As a result, she ordered restitution in the amount of $39,973.62, the remaining balance owed to the Alamo Post Office.  Judge Wilken also sentenced the defendant to a three-year period of supervised release.  The defendant will begin serving his sentence on March 13, 2012.
 
            Esezobor was indicted by a federal grand jury on April 14, 2011.
 
            Brian Lewis and Joshua Hill are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Noble Hughes, Janice Pagsanjan, and Vanessa Vargas.  The prosecution is the result of a year-long investigation by the U.S. Postal Service Office of Inspector General and the U.S. Secret Service.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                           CONTACT:  JACK GILLUND January 27, 2012                                                                                                                   (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                                      Jack.Gillund@usdoj.gov
 
            SAN JOSE, Calif. – A criminal information was filed Wednesday, charging Brandon Ruddick with one count of conspiracy to commit wire fraud, eight counts of wire fraud and one count of possession of 15 or more unauthorized access devices, United States Attorney Melinda Haag announced.
                                                                                               
            According to the information, Ruddick, 28, formerly of Portland, Ore., used stolen credit card account information to purchase tickets to sporting events, concerts and live performances on the StubHub website.  Ruddick purchased tickets himself and directed his co-conspirators to use the stolen credit card information to purchase tickets on his behalf.  The StubHub tickets were purchased without the knowledge and authorization of the credit card account holders.  In return for making purchases on his behalf, Ruddick deposited money directly into the bank accounts of his co-conspirators and sent them money through the Western Union wire service.
 
            The information also alleges that, once the tickets were purchased from the StubHub website, Ruddick or his co-conspirators sent them to brokers across the United States who re-sold the tickets on Ruddick’s behalf.  Ruddick allowed his brokers to keep a portion of the sale price from each ticket and directed them to deposit the remainder of the sale price into his bank accounts.  After receiving payment, the brokers sent the StubHub tickets to the purchasers by either e-mail or mail.

            StubHub, Inc. is a company based in San Francisco that hosts a website that allows parties to sell and purchase tickets to sporting events, concerts and live performances from around the United States.  StubHub users register on the website by creating a user id and entering an e-mail address, physical address, bank account or credit card account number.  Once a user establishes an account, the user is able to search for available tickets for sporting events, concerts and live performances and make purchases.  After a user purchases tickets, StubHub either mails the purchased tickets to the physical address listed for the user’s account, or emails the tickets to the user at the email address listed for the account.

            Ruddick, who currently lives in Washington state, is scheduled to make his initial appearance in federal court in San Jose at 9:30 a.m. on April 12, 2012, before Magistrate Judge Howard R. Lloyd.        
 
            The maximum statutory penalty for each count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349 is 20 years and a fine of $250,000, plus restitution if appropriate.  The maximum statutory penalty for each count of wire fraud in violation of 18 U.S.C. § 1343 is 20 years and a fine of $250,000, plus restitution if appropriate.  The maximum statutory penalty for each count of possession of 15 or more unauthorized access devices in violation of 18 U.S.C. § 1029(a)(3) is 10 years and a fine of $500,000, 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. 
 
            Hanley Chew is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elise Etter.  The prosecution is the result of an investigation by the United States Secret Service.
 
            Please note, an information contains only allegations against an individual and, as with all defendants, Mr. Ruddick must be presumed innocent unless and until proven guilty.

FOR IMMEDIATE RELEASE                                                      CONTACT: LAUREN HORWOOD
Friday, January 27, 2012                                                                           PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                       usacae.edcapress@usdoj.gov

            SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that a federal grand jury returned an indictment yesterday charging two defendants with mail fraud and money laundering in connection with a mortgage fraud scheme that resulted in losses of at least $180,000 to lenders. Charged are Andrey Kim, 28, of Sacramento; and Sultanmurod Rashidov, 29, of Brooklyn, N.Y.  Kim was indicted for another mortgage fraud scam last month. He is scheduled to appear on the new charges on January 31, 2012, before Magistrate Judge Carolyn K. Delaney. Rashidov is believed to be out of the country.

            According to court records, Kim and Rashidov were responsible for taking out more than $236,000 in home equity loans for a single property in West Sacramento. As part of the loan application process, Kim allegedly submitted false and fraudulent information related to his gross monthly income and outstanding mortgage balance. About a year after obtaining a $58,800 home equity loan, Kim signed a deed granting joint ownership of the property to Rashidov. The indictment alleges that Rashidov then submitted a home equity loan application containing false and fraudulent information related to his employer, gross monthly income, and outstanding mortgage balance. After obtaining $178,000 from the lender, Rashidov defaulted on the loan.

            This case is the product of a joint investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Dominique N. Thomas is prosecuting the case.

            If convicted of mail fraud, the defendants face a maximum statutory penalty of 30 years in prison and a $1 million fine. If convicted of money laundering, they face a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted, 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 defendant is 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
Friday, January 27, 2012                                                                                          PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov

Ninth Guilty Plea in the Investigation to Date

            SACRAMENTO, Calif. – A real estate investor pleaded guilty today in U.S. District Court in Sacramento to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Calif., Sharis A. Pozen, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division, and Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, announced.

            Kenneth A. Swanger, 41, of Woodland, pleaded guilty to conspiring with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. The primary purpose of the conspiracy was to suppress and restrain competition and to obtain selected real estate offered at San Joaquin County public foreclosure auctions at noncompetitive prices, the department said in court papers.

            According to the court documents, after the conspirators’ designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group’s illicit profit. The illicit profit was divided among the conspirators in payoffs. According to his plea agreement, Swanger participated in the scheme beginning in or about June 2009 until in or about October 2009.
            To date, nine individuals, including Swanger, have pleaded guilty in U.S. District Court for the Eastern District of California in connection with the investigation. They are: Anthony B. Ghio; John R. Vanzetti; Theodore B. Hutz; Richard W. Northcutt; Yama Marifat; Gregory L. Jackson; Walter Daniel Olmstead; and Robert Rose. In addition, four other investors, Wiley C. Chandler, Andrew B. Katakis, Donald M. Parker and Anthony B. Joachim, and one auctioneer, W. Theodore Longley, were indicted by a federal grand jury in Sacramento on Dec. 7, 2011.
            “This type of illegal scheme undermines the transparency and integrity of the competitive market for residential real estate. Today’s guilty plea sends a clear message that the Department of Justice does not tolerate anticompetitive conduct that harms consumers,” said Acting Assistant Attorney General Pozen. “The Antitrust Division will continue to work with its law enforcement partners to prosecute the perpetrators of anticompetitive schemes in public real estate foreclosure auctions in the Sacramento area and into northern California.”
 “The Department of Justice is bringing greater scrutiny to auctions of foreclosed properties as part of our effort to root out fraud in the real estate industry in all its forms,” said U.S. Attorney Wagner. “The days when a few players could rig these auctions for their own benefit are ending.”
            Swanger pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine. Swanger also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.
            These charges arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the Antitrust Division’s San Francisco Office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office. Trial attorneys Anna Pletcher and Tai Milder from the Antitrust Division’s San Francisco Office and Assistant U.S. Attorney Russell L. Carlberg are prosecuting the case. 
            Today’s charges are part of efforts underway 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 task force is the national Mortgage Fraud Working Group, co-chaired by U.S. Attorney Wagner. For more information on the task force, visit www.StopFraud.gov.
            Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 26, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

HIGH-LEVEL WEST COAST DRUG TRAFFICKING RING DISMANTLED

 
            SAN FRANCISCO – A federal grand jury in San Francisco indicted 20 defendants on Jan. 17 for drug related charges that include conspiracy to distribute five kilograms or more of cocaine, 280 grams or more of cocaine base and 500 grams or more of methamphetamine, United States Attorney Melinda Haag announced.
 
            According to the Indictment, which was unsealed yesterday, the defendants engaged in a long-term narcotics conspiracy.  The indictment also alleges that 15 of the defendants distributed illegal narcotics or possessed illegal narcotics with the intent to distribute them.
 
            According to the Indictment, two of the defendants, Antonio Jose Diaz-Rivera, a/k/a Jose Angel Monroy, a/k/a Magico, a/k/a Miguel; and Santos Cabrera-Arteaga, a/k/a Chelé, are alleged to have operated continuing criminal enterprises by committing a series of drug trafficking crimes while working in concert with at least five other people whom they organized, supervised or managed, and by obtaining substantial income and resources from the enterprise. 
 
            The following defendants were charged in the indictment that alleges a narcotics conspiracy:

 
1.                              Antonio Jose Diaz-Rivera, a/k/a Jose Angel Monroy, a/k/a Magico, a/k/a Miguel, 35, of San Francisco.
2.                              Chabelita Lnu, a/k/a Isabel.
3.                              Fatima Carolina Segovia, 32, of Hayward, Calif.                       
4.                              Fnu Lnu, a/k/a Alé.
5.                              Fnu Lnu, a/k/a Gata.
6.                              Franklin Almendarez, a/k/a Pelon, 31, of Oakland, Calif.
7.                              Fortunato Rodelo-Lara, a/k/a Nato, 42, of San Mateo, Calif.
8.                              Javier Antonio Cabrera-Arteaga, a/k/a Piloto, 26, of Seattle.
9.                              Jesus Almendares-Vasquez, a/k/a Wilfredo, 36, of San Jose, Calif.
10.                          Jesus De La Paz Lopez-Soto, a/k/a Catrin Soto, a/k/a El Catrin, 34.
11.                          Joel Lnu, a/k/a Jose Cortez, a/k/a Tavo, a/k/a Estrada.
12.                          Jose Evaristo-Rauda, a/k/a Yuquita, 44, of San Francisco.
13.                          Jose Tobar-Galdamez, a/k/a Renaud, 47, of Hayward.
14.                          Juan Carlos Monroy, a/k/a Juanito, a/k/a Chapulincito, 20.
15.                          Layser A. Cabrera, a/k/a Felix Antonio Escobar, 25.
16.                          Luis Cabrera-Banegas, a/k/a Tigre, 26.
17.                          Luis Fernando Aguilar-Soto, 46.
18.                          Marcos Antonio Flores, 49, of Vallejo, Calif.
19.                          Santos Cabrera-Arteaga, a/k/a Chelé, 30.
20.                          Tilo Rodriguez-Hernandez, a/k/a Dixon Rodriguez, a/k/a Teodoro, 24.
 
 

            Of those charged, the following defendants were arrested and arraigned in federal court in San Francisco, yesterday:
 
 
 
•                                 Antonio Jose Diaz-Rivera, arrested in San Francisco.
•                                 Jose Evaristo-Rauda, arrested in South San Francisco.
•                                 Fatima Carolina Segovia, arrested in Hayward.
•                                 Jose Tobar-Galdamez, arrested in Hayward.
∙                 Fortunato Rodelo-Lara, arrested in San Mateo.
∙                 Marcos Antonio Flores, arrested in Vallejo.                    
∙                 Jesus Almendares-Vasquez, arrested in San Jose.
∙                 Javier Antonio Cabrera-Arteaga, arrested in Seattle.
 
            All of the defendants who were arrested in the Bay Area have detention hearings or status hearings scheduled next week or the following week in federal court in San Francisco before Magistrate Judge Jacqueline Scott Corley or Magistrate Judge Maria-Elena James.
 
            The maximum statutory penalty for conspiracy to distribute and to possess with Intent to distribute cocaine, cocaine base, and methamphetamine, in violation of 21 U.S.C. §§ 846, 841(b)(1)(A)(ii), 841(b)(1)(A)(iii), and 841(b)(1)(A)(viii); operating a continuing criminal enterprise, in violation of 21 U.S.C. § 848(a); possession with intent to distribute and distribution of cocaine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(ii); possession with intent to distribute and distribution of cocaine base, in violation of  21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(iii); and possession with intent to distribute and distribution of methamphetamine, in violation of  21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(viii), is life in prison and a fine of up to $4 million.  The maximum statutory penalty for possession with intent to distribute and distribution of cocaine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)©, is 20 years in prison and a fine of up to $1milliion.  The maximum statutory penalty for possession with intent to distribute and distribution of cocaine, in violation of  21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(ii); and for distribution of cocaine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(B)(ii), is 40 years in prison and a fine of up to $2 million.  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. 
 
            In addition to those charged in the narcotics conspiracy, two defendants Armando Antonio Monroy, 48, of San Francisco, and Jorge Peraza-Rivas, 37, of San Francisco, were each charged in an indictment, issued on Jan. 10 and unsealed yesterday, that alleges one count of conspiracy to commit wire fraud and two counts of wire fraud.  They face a maximum of 30 years in prison and a fine of the greater of $1 million or twice the gain or loss from the offense for each count.  Both defendants were arrested in San Francisco. 
 
            Twenty-three defendants were charged by criminal complaint on Jan. 23, 2012, in a related investigation in Seattle.  20 of them were arrested yesterday in the Seattle area. 
 
            The prosecution is the result of a four-year investigation by the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigations, San Francisco Police Department, and Oakland Police Department.  In addition, the Federal Bureau of Investigation, San Mateo County Narcotics Task Force, the Daly City Police Department, the Richmond Police Department, the Southern Alameda County Major Crimes Task Force, the California Department of Justice Bureau of Investigations, the Alameda County Narcotics Task Force, the High Intensity Drug Trafficking Area, the U.S. Marshals Service, and U.S. Immigration and Customs Enforcement Homeland Security Investigations assisted in the investigation. 
 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 24, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
  

Defendant Ran Multiple Grow Houses In Suburban Neighborhoods  

 
            OAKLAND, Calif. – Peng Li was sentenced last week to 10 years in prison for distributing and conspiring to distribute more than 1,000 marijuana plants, United States Attorney Melinda Haag announced.
 
            Li was convicted in September on two drug trafficking charges after a trial by jury.  During the trial, evidence showed that Li and his associates operated three indoor marijuana grow houses in suburban residential neighborhoods in Antioch, Pinole, and Bay Point, Calif., as well as a marijuana processing location in Oakland.  According to the evidence offered at trial, Li and his associates rented the houses, constructed elaborate electrical bypasses to power their growing lights with stolen electricity, used voluminous amounts of chemical fertilizers, and destroyed walls and ceilings inside the houses to build ventilation and hydration systems.  According to witnesses at trial, Li and his associates grew approximately 3,000 marijuana plants in this manner over multiple grow cycles.  The evidence at trial also showed that at least one of the houses in a residential area of Pinole appeared to have been burglarized by unknown parties. 
           
            “Indoor marijuana grow operations are illegal under federal law,” U.S. Attorney Haag said.  “Moreover, they threaten the safety of our residential neighborhoods by greatly increasing the risk of burglaries, environmental damage and fires.”
 
            Li, 29, of Antioch, was originally indicted by a federal grand jury on July 15, 2008.  He was charged with manufacturing, distributing, and possessing with intent to distribute marijuana, and conspiring to do the same.
 
            The case was the result of a multi-year operation dubbed Operation Triple Stack, led by the San Francisco office of the Federal Bureau of Investigation, under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF), a multi-agency task force that coordinates long-term narcotics trafficking investigations.  The San Francisco Police Department, Oakland Police Department, and U.S. Drug Enforcement Administration also participated in Operation Triple Stack, which targeted a group of ecstasy and marijuana traffickers.  The investigation was conducted in coordination with related ecstasy-trafficking investigations in Sacramento and Denver, resulting in the apprehension of more than 50 individuals nationwide.
 
            The 10-year sentence was handed down by U.S. District Court Judge Phyllis J. Hamilton on Jan. 18, 2012.  Judge Hamilton also sentenced the defendant to a four-year period of supervised release, and ordered the seizure of a Rolex watch that prosecutors said was worth approximately $6,000 and was purchased using illegal drug proceeds.

Michigan Man Sentenced to 25 Years in Prison for Participating in Child Pornography Ring and Producing Child Pornography

 
            RIVERSIDE, California – A Michigan man was sentenced today to 25 years in federal prison for filming his sexual abuse of a young boy and distributing a video to members of an international child exploitation enterprise.

            Joshua Boras, 34, of Lapeer, Michigan, was sentenced by United States District Judge Virginia A. Phillips. In December 2010, Boras pleaded guilty to one count of participation in a child exploitation enterprise and one count of production of child pornography.

            The sentencing of Boras was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, United States Attorney André Birotte Jr. and Assistant Director in Charge Steve Martinez of the FBI's Los Angeles Field Office.

            Boras was affiliated with the “Lost Boy” online bulletin board, which according to court documents and proceedings was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography. Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board approximately three years ago. As a result of the investigation, 16 named defendants were charged in the United States and arrested for their roles in the bulletin board. To date, 15 defendants have pleaded guilty or have been convicted at trial, and one defendant died in custody.

            Boras is the second Lost Boy defendant to be sentenced. Previously, Christopher Klein, aka “Mr. Bean,” of Columbus, Ohio, was sentenced to 15 years in federal prison.

            Thirteen defendants are pending sentencing, including Billy Wade Carroll, of Dayton, Ohio, who faces a mandatory minimum sentence of 35 years in federal prison when he is sentenced by Judge Phillips on Wednesday.

            In addition to the 16 defendants named in the Lost Boy indictment, approximately six more men have been charged with child molestation as a result of the investigation. The investigation also led to the identification of 27 domestic victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.

            According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, the judicial cooperation arm of the European Union. Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania. Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network. Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals. Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom. 

            According to court documents, Lost Boy had a thorough vetting process for new members, who were required to post child pornography to join the organization. Once accepted, members were required to continue posting child pornography to remain in good standing and to avoid removal from the board. According to court documents, Lost Boy members advised one another on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.

            In addition to his participation in Lost Boy, Boras filmed his sexual abuse of a minor boy and distributed these images to some of the members of the Lost Boy board.

            International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand. Three suspects in Romania, one in France, and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom. Law enforcement have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.

            The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team. The High Technology Investigative Unit of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division, along with Eurojust, have provided invaluable assistance during the investigation. 

            The Lost Boy case is being prosecuted by the United States Attorney’s Office in Los Angeles and the Child Exploitation and Obscenity Section at the Justice Department.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 19, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
           SAN FRANCISCO - A federal jury has convicted an Oakland man, Mauricio Aguilera, age 45, of one count of possessing cocaine with intent to distribute it and distributing it and one count of conspiracy to distribute cocaine, United States Attorney MELINDA HAAG announced.  The  guilty verdict on Wednesday, January 18, followed a five-day jury trial before Senior U.S. District Court Judge Charles B. Breyer in San Francisco. 
 
           The evidence at trial showed that, on March 15, 2009, Aguilera drove from Oakland to Novato and delivered approximately three kilograms of cocaine to Marin County drug distributor David Morgan.  Law enforcement officers observed Aguilera drive to a residence in Novato and monitored wiretaps on two telephones used by Aguilera.  The following day, a search warrant was executed in Novato, the three kilograms of cocaine and other drugs were recovered, and Morgan, who was on site, was arrested.  Aguilera was arrested on November 4, 2009.  Additional evidence at trial established that Aguilera had supplied Morgan with cocaine over a several-year period and that Aguilera was part of a long-running cocaine distribution conspiracy.
 
           The conviction results in a mandatory minimum prison sentence of 10 years and a maximum of life.  The government filed an information before trial under Title 21 United States Code section 851 alleging a prior felony drug offense conviction that may increase Aguilera’s mandatory minimum prison sentence to 20 years.  Aguilera’s sentence will be determined at his April 25, 2012, sentencing hearing before Judge Breyer.  Morgan, who pleaded guilty on October 29, 2009, to the sole count of conspiracy to distribute cocaine is currently scheduled to be sentenced on February 29, 2012.  Pursuant to his plea agreement, Morgan forfeited to the government $491,951.00 seized on March 16, 2009.  Aguilera and Morgan’s sentences will be decided by the Court after consideration of federal sentencing statutes and guidelines. 
 
           Immediately following the trial, Aguilera was remanded to the custody of the U.S. Marshal and will remain in federal custody until his April 25, 2012, sentencing before Judge Breyer in San Francisco.
           
           Tom Colthurst and Ben Tolkoff are the Assistant U.S. Attorneys who prosecuted the case, with the assistance of paralegal Michelle Alter and legal technicians Jacquelyn Lovrin and Nina Burney.  The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), U.S. Immigration and Customs Enforcement (ICE) ,Oakland Police Department, Marin County Sheriff’s Office, Alameda Police Department, Alameda County Narcotics Task Force, South Alameda County Narcotics Task Force, Contra Costa County Sheriff's Office, San Pablo Police Department, Alameda County Sheriff's Office, San Leandro Police Department, the San Francisco Police Department, and the California Department of Justice/Bureau of Narcotics Enforcement.  The investigation is part of this district’s Organized Drug Enforcement Task Force (OCDETF) program.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 19, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov

            SAN FRANCISCO - Today the United States Attorney’s Office for the Northern District of California announced that on January 17, 2012, Kurt S. Hovan, of Belvedere, Calif., pled guilty to mail fraud stemming from Mr. Hovan’s fraudulent use of “soft dollars” and his subsequent obstruction of an investigation being conducted by the Securities and Exchange Commission (SEC).
 
            According to the Plea Agreement, Mr. Hovan, 44, admitted to participating in a scheme to circumvent provisions of the Securities Exchange Act of 1934 by using “soft dollars” to pay his brother’s company a monthly salary, some of which his brother’s company then kicked back to pay rent for Mr. Hovan’s company, Hovan Capital Management, LLC (HCM).  “Soft dollars” are credits from a brokerage firm on commissions generated by client trades in brokerage firm accounts.  Brokerage firm clients, such as a registered investment adviser firm like HCM, are allowed to use those credits to pay for research services to benefit the investment adviser’s clients.  The investment adviser, however, must disclose its use of these “soft dollar” credits, and the investment adviser is prohibited from using these credits to pay for its own benefit instead of its clients’ benefit.
 
            Mr. Hovan also admitted that in response to requests from SEC examiners, he falsified documents making it appear that his brother’s company had done outside research that qualified it to receive “soft dollars” and supplied these false documents to the SEC.  Mr. Hovan also admitted that when the SEC asked him about these documents, he falsely stated under oath that he had not created them.
 
            Mr. Hovan is scheduled to be sentenced on May 15, 2012, before the Honorable Judge Richard Seeborg.  The maximum statutory penalty for mail fraud, in violation of Title 18, United States Code, Section 1341, is 20 years in prison, a $250,000 fine, and 3 years of supervised release.  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.
 
            Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth.  The prosecution is the result of a 5-month investigation by the Federal Bureau of Investigation, with substantial assistance from the San Francisco Regional Office of the Securities and Exchange Commission.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 17, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
            SAN JOSE - A federal jury has convicted a San Jose man, Reynaldo Pedregon, Jr., of one count of possessing methamphetamine with intent to distribute it, United States Attorney MELINDA HAAG announced.  The  guilty verdict on Wednesday, January 11, followed a three-day jury trial before Senior U.S. District Court Judge D. Lowell Jensen in San Jose. 
 
            The evidence at trial showed that, on January 5, 2010, Reynaldo Pedregon was a fugitive and subject to an outstanding federal arrest warrant issued in December of 2009.  At the time he absconded, Reynaldo Pedregon was under the supervision of the United States District Court Probation Office, following a prior conviction for a drug trafficking offense.  Deputies from the U.S. Marshals Service (USMS) located Reynaldo Pedregon at an address in San Jose on January 5, 2010, and he was arrested without incident.  When U.S. Probation officers later searched the room in which Pedregon had been staying, they discovered approximately 1/4 pound of methamphetamine.   
 
            The conviction results in a mandatory minimum prison sentence of 10 years and a maximum of life.  The government filed an information before trial under Title 21 United States Code section 851 alleging a prior felony drug offense conviction that may increase  Pedregon’s mandatory minimum prison sentence to 20 years.  The defendant’s sentence will be determined at his March 29, 2012, sentencing hearing before Judge Jensen.  Pedregon’s sentence will be decided by the Court after consideration of federal sentencing statutes and guidelines. 
 
            Pedregon has been in continuous custody since his arrest and will remain in federal custody until his March 29, 2012, sentencing before Judge Jensen in San Jose.
 
            Allison Marston Danner and Grant Fondo are the Assistant U.S. Attorneys who  prosecuted the case, with the assistance of legal technicians Nina Burney and Kamille Singh.  The prosecution is the result of a joint investigation by the Probation Office of the United States District Court and the Federal Bureau of Investigation, with the assistance of the USMS, the Drug Enforcement Administration, and the San Jose Police Department.

Former L.A. County Sheriff's Deputy Agrees to Plead Guilty to Federal Corruption Charge for Agreeing to Accept $20,000 in Bribes

 
            LOS ANGELES – A former Los Angeles County Sheriff’s deputy was charged today with agreeing to accept $20,000 in bribes in exchange for smuggling contraband into the Men’s Central Jail.

            In a criminal information filed in United States District Court, Gilbert Michel, 38, was charged with one count of bribery of a public official.

            In a plea agreement also filed today, Michel agreed to plead guilty to the charge and to cooperate in an ongoing investigation.

            The case against Michel was announced by United States Attorney André Birotte Jr. and Thomas E. Perez, the Assistant Attorney General for the Civil Rights Division.

            Michel, who resigned from the Los Angeles Sheriff’s Department in September 2011, was assigned to the Men’s Central Jail in downtown Los Angeles. The criminal information charges that the LASD is a local organization which receives federal funds and that Michel, as deputy sheriff, was responsible for the care, custody and security of inmates housed at the jail.

            In the plea agreement, Michel admits that he agreed to accept $20,000 in cash in exchange for smuggling contraband into the jail for delivery to an inmate. The contraband included a cell phone, cigarettes and a note – which in jail parlance is called a “kite.”

            The charge of bribery of a public official carries a statutory maximum penalty of 10 years in federal prison.
            Michel is expected to make his initial court appearance in this case on Tuesday, January 17.
            The case against Michel is part of an ongoing investigation being conducted by the Federal Bureau of Investigation.

            The case is being prosecuted by the United States Attorney’s Office for the Central District of California in conjunction with the Justice Department’s Civil Rights Division.   

SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that Alexander Popov, 47, of Los Angeles, was sentenced today by United States District Judge Morrison C. England Jr. to eight years and one month in prison for committing health care fraud and conspiring to commit health care fraud. He was found guilty by a jury on July 8, 2011. 

In sentencing, Judge England found that Popov, a medical doctor, was responsible for more than a million dollars in fraudulent billings submitted to Medicare and more than $600,000 in payments made on false claims.  Popov abused his position of trust as a physician and endangered the health of patients.  Evidence at trial showed that Popov gave false testimony and manufactured evidence at trial, amounting to an obstruction of justice.  In particular, a letter produced by Popov on the eve of trial, and supposedly written years earlier while the conspiracy was in progress.   

According to testimony presented at trial, from February 2006 through August 2008, Vardges Egiazarian, 63, of Panorama City, owned and controlled three health care clinics in Sacramento, Richmond, and Carmichael. Egiazarian and others recruited doctors to submit applications to Medicare for billing numbers. Popov assumed the role of co-owner and practitioner at the Sacramento clinic, and claims were be submitted to Medicare under his name for medical services purportedly  rendered at the clinic.

In fact, Popov never treated a single patient at the clinics. Clinic patients, almost all of whom were elderly and non-English speaking, were recruited and transported to the clinics by individuals who were paid according to the number of patients they brought to the facilities. Rather than being charged a co-payment, the patients were paid for their time and the use of their Medicare eligibility, generally in the amount of $100 per visit. Patient charts were created falsely stating that each patient received comprehensive exams and a broad array of diagnostic tests.  Few of these tests were ever performed, none were performed based on any medical need, and clinic employees filled out other portions of the charts using preprinted templates.  Some clinic employees admitted to performing various tests on themselves, and placing the results in patient files.

Patient files were then transported to Southern California, where Popov would sign them indicating he provided or approved the treatments therein, and sign related billing forms.  These files were then used to support billing submitted to Medicare for treatments and services that were unnecessary, never performed, or both.  In all, the three clinics submitted more than $5 million worth of fraudulent claims to Medicare, $1.7 million of which was actually paid. In return for their roles, Popov and the other involved physicians received 20 percent of the billings paid under their respective provider numbers.

In pronouncing sentence, Judge England stated that the conspiracy was “a very sophisticated operation.”  Dr. Popov requested leniency on the basis of the benefits he had provided and could continue to provide to society in his role as a physician.  The Judge rejected this, stating, “a physician should be held to a higher standard rather than a lower standard. … People trust their doctors, people want to trust their doctors … this was about making money. … He used his profession, he used his education, he used his intelligence in the worst possible way.  It’s extremely troubling.”

This case is the product of an investigation by the Office of the Inspector General for the Department of Health and Human Services and the Federal Bureau of Investigation. Assistant United States Attorneys Philip Ferrari and Jean M. Hobler prosecuted the case. 

“The actions perpetrated by this individual illustrate the complete disregard for government sponsored healthcare programs, including the Medicare program,” said Ivan Negroni, Special Agent‑in‑Charge of the San Francisco Region for the United States Department of Health and Human Services.  “HHS‑OIG is dedicated to working with our law enforcement partners to pursue and apprehend those who take advantage of Medicare.”

Others who have previously pleaded guilty in this matter include:

$          Vardges Egiazarian, currently serving 78 months in prison.

$          Derrick Johnson, a doctor involved with the Richmond clinic, who is currently awaiting sentencing on March 22, 2012.

$          Nazaret Salmanyan, an unlicensed ultrasound technician who worked in the clinics and is awaiting sentencing on January 26, 2012.

$          Zoya Belov, a nurse licensed in Russia but not the United States, who is awaiting sentencing on May 10, 2012.

$          Shushanik Martirosyan, who billed Medicare as part of the scheme, who is awaiting sentencing on May 10, 2012.

$          Migran Petrosyan, one of the businessmen, who is awaiting sentencing on March 29, 2012.

$          Liw Jiaw Saechao, aka Jenny Saechao, who recruited patients for the clinics and is awaiting sentencing on March 29, 2012.

Emilio Cruz, another physician charged in the superseding indictment in this case, was arrested on July 21, 2011, and remains in custody pending trial. His next court hearing is scheduled for February 23, 2012. The charges in the superseding indictment as to Dr. Cruz are only allegations and he 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 January 12, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

Admits to Sex Trafficking of Teenagers

 
            OAKLAND -  Mahendar “Mike” Singh pleaded guilty yesterday in federal court in Oakland, California, to conspiracy to violate the federal sex trafficking law, United States Attorney MELINDA HAAG announced.
 
            In pleading guilty before United States District Court Judge Phyllis J. Hamilton, defendant Mahendar Singh, 40, admitted that he and a co-defendant, both formerly of Sacramento, conspired to operate a prostitution enterprise between Spring 2011 and August 2011 in Sacramento County and multiple Bay Area counties.  He admitted to recruiting teenage females to provide sex services in exchange for money and drugs and to knowing that at least one of the teenagers was a juvenile.  Mahendar Singh also admitted that he and his co-defendant were able to maintain their victims’ services by providing them with money, clothing, and drugs, promising them a family-like environment, and using and threatening the use of physical force.  An affidavit filed in connection with this case alleged that the defendants used an Internet website to advertise their victims and employed cell phones and text-messaging to make arrangements with customers.
 
            A federal grand jury indicted Mahendar Singh and his co-defendant on sex trafficking conspiracy charges on December 1, 2011.  Mahendar Singh remains in custody and is scheduled to next appear on March 28, 2012 for sentencing before Judge Hamilton in Oakland, California.  His co-defendant remains released on bond pending trial.
 
            The maximum statutory penalty for conspiring to commit sex trafficking, in violation of 18 U.S.C. § 1594(c), is lifetime imprisonment, a fine of $250,000, forfeiture, and restitution.  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. 
 
            Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal assistant Jeanne Carstensen.  The prosecution is the result of a joint investigation by the Federal Bureau of Investigation (“FBI”) and Homeland Security Investigations, U.S. Department of Homeland Security (“HSI”), with the assistance of the South San Francisco Police Department, the San Mateo County District Attorney’s Office, and the Human Trafficking Prosecution Unit of the Criminal Section, Civil Rights Division, U.S. Department of Justice.
 
            Anyone who suspects instances of human trafficking are encouraged to call the FBI, HSI, or the Human Trafficking Hotline at 1-888-3737-888.  Anonymous calls are welcome. 

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 11, 2012                                                                                                              (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
 
            OAKLAND, Calif. – Linda Lee Kreiter pleaded guilty in federal court in Oakland Monday to filing false tax returns, United States Attorney Melinda Haag and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced.
 
            In pleading guilty, Kreiter admitted to filing false tax returns for the tax years 2005, 2006, 2007 and 2008 by failing to report cash income she had obtained while working as a business manager at the Oakland Downtown Auto Center.  Kreiter admitted to deliberately failing to report $142,967.92 in cash income, representing a total tax loss of $56,022.
 
            Kreiter, 54, of Galt, Calif., was charged by information on Dec. 15, 2011.  She was charged with four counts of filing false tax returns in violation of 26 U.S.C. § 7206(1). 
 
            The sentencing of Kreiter is scheduled for April 24, 2012, before United States District Court Judge Claudia Wilken in Oakland.  The maximum statutory penalty for each count in violation of  26 U.S.C. § 7206(1) is three years of in prison and a fine of $100,000, plus restitution.  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.
 
            Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan.  The prosecution is the result of an investigation by the Internal Revenue Service Criminal Investigation.

One of the Longest Health Care Fraud Sentences Imposed in the Central District of California

 
            WASHINGTON – The pastor of a now defunct Los Angeles church who owned and operated several fraudulent durable medical equipment (DME) supply companies was sentenced today to 180 months in prison for his role in a $14.2 million Medicare fraud scheme, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced.
 
Christopher Iruke, 61, was also ordered to pay $6.7 million in restitution, jointly and severally with his co-conspirators, by U.S. District Judge Terry J. Hatter of the Central District of California. In addition, Judge Hatter ordered Iruke to serve three years of supervised release following his prison term.
 
            In August 2011, a jury found Iruke and his wife, Connie Ikpoh, 49, and one of their employees, Aura Marroquin, guilty of conspiracy and health care fraud offenses following a two-week trial in Los Angeles.
 
According to evidence introduced at trial, Iruke and Ikpoh were pastors at Arms of Grace Christian Center, a church that operated from 5700 Crenshaw Boulevard in Los Angeles, where Iruke and Ikpoh also operated Pascon Medical Supply, a fraudulent DME supply company. Iruke and Ikpoh hired several of their parishioners at Arms of Grace to assist them in running Pascon and another fraudulent DME supply company, Horizon Medical Equipment and Supply Inc.  Horizon was owned by Ikpoh, who also worked as a nurse at two Los Angeles-area hospitals. 
 
            According to evidence presented at trial, Iruke, Ikpoh, Marroquin and their co-conspirators used fraudulent prescriptions and documents that Iruke purchased from a number of illicit sources to bill Medicare for expensive, high-end power wheelchairs and orthotics that were medically unnecessary or never provided. These power wheelchairs cost approximately $900 per wheelchair wholesale, but were billed to Medicare at a rate of approximately $6,000 per wheelchair. 
 
            Evidence introduced at trial established that when it appeared to Iruke that he would have to close Pascon due to an audit by Medicare, Iruke convinced his sister, Jummal Joy Ibrahim, and a member of Arms of Grace to allow him to use their names and identities to open two new fraudulent DME supply companies. These companies, Contempo Medical Equipment Inc. and Ladera Medical Equipment Inc., also operated from Los Angeles. After Pascon and Horizon closed, Iruke and his co-conspirators continued to operate the fraud scheme from Contempo and Ladera.
 
            Witnesses who sold fraudulent prescriptions and documents to Iruke testified that they and others paid cash kickbacks to street-level marketers to offer Medicare beneficiaries free power wheelchairs and other DME in exchange for the beneficiaries’ Medicare card numbers and personal information. These witnesses testified that they and their associates used this information to create fraudulent prescriptions and medical documents which they sold to Iruke and the operators of other fraudulent DME supply companies for $1,100 to $1,500 per prescription. 
 
            Trial testimony established that Iruke took extensive efforts to conceal the fraud scheme and his involvement with the companies. One witness who worked at the companies testified that Iruke directed her and Marroquin to lie to state and Medicare inspectors about his involvement with Contempo and Ladera when the inspectors visited the companies. 
 
            Witness testimony established that shortly after agents visited Ladera, Iruke directed Marroquin and Darawn Vasquez, a member of Arms of Grace who worked at the supply companies, not to talk to law enforcement. Iruke provided Marroquin and Vasquez with cellular telephones, and directed them to use the phones in order to prevent law enforcement from intercepting their conversations. Iruke and Vasquez then met at Arms of Grace, and shredded evidence of the fraud scheme. 
 
            Witness testimony and evidence introduced at trial also established that within a few weeks of the agents visiting Ladera, Iruke closed Contempo and Ladera, which prompted agents to serve Iruke and his attorneys with subpoenas for the files of the companies. Instead of producing the files, Iruke directed that the files be brought to an auditorium used by Arms of Grace, where Iruke, Ikpoh, Marroquin and others altered and destroyed documents within the files to remove evidence of the fraud scheme. Law enforcement agents found Marroquin with these files when they arrested her.
 
            Evidence introduced at trial showed that as a result of this fraud scheme, Iruke, Ikpoh, Marroquin and their co-conspirators submitted more than $14.2 million in fraudulent claims to Medicare, and received approximately $6.7 million in reimbursement payments from Medicare. The evidence at trial showed that Iruke and Ikpoh diverted most of this money from the bank accounts of the supply companies to pay for the fraudulent prescriptions and documents which Iruke purchased to further the scheme, and to cover the leases on their Mercedes vehicles, home remodeling expenses and other personal expenses.
 
            Ikpoh is scheduled to be sentenced on Feb. 27, 2012. Vasquez and Ibrahim pleaded guilty to conspiracy and false statement charges in February 2011 and March 2011, respectively, and are awaiting sentencing. On Dec. 9, 2011, Judge Hatter sentenced Marroquin to time served and three years of supervised release. 
 
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region for the HHS Office of the Inspector General (HHS-OIG); and Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office.
 
            The case was prosecuted by Trial Attorney Jonathan Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Kirman of the Central District of California. The case was investigated by HHS-OIG with assistance from the California Department of Justice. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
 
            Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,160 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
 
            To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND January 9, 2012                                                                                                                (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
Manufactured and Sold Counterfeit Global VR Game Packs, Submitted False Information in Mortgage Applications To Secure More Than $3 Million in Loans From Countrywide Home Loans
 
            SAN JOSE, Calif. – The former chief technology officer of Santa Clara, Calif., video game developer Global VR, and the former owner of NexTune Corporation, d/b/a UltraCade Technologies, pleaded guilty Friday to conspiracy to commit mail and wire fraud, and conspiracy to commit bank fraud, U.S. Attorney Melinda Haag announced.  The charges were contained in separate indictments but consolidated for the guilty pleas.
 
            David Foley, 46, of Los Gatos, Calif., admitted that, as charged in the first indictment, he manufactured thumb drives, known as “game packs,” containing video gaming software that could be loaded onto arcade video game machines made for the home market.  Foley illegally produced the products from his home while working as the chief technology officer of Global VR, which had previously acquired all rights to produce and sell games under the UltraCade name.  After producing the game packs, Foley sold the products to a co-defendant located in Milford, Conn., and agreed to sell the game packs to the public using packaging and advertisements that falsely represented the goods to have been genuinely manufactured by UltraCade.  Foley thereafter received payment for the illegally manufactured game packs by mail and wire.
 
            Foley further admitted that, as charged in the second indictment, he defrauded Countrywide Home Loans (now owned and operated by Bank of America) of mortgage and home equity line of credit loans in the amounts of $2,624,475 and $374,925.  He did this by falsely claiming that he was still employed at Global VR.  Foley had been fired from his job by the time the loan applications were submitted.  Foley admitted that he instructed a co-defendant to contact Countrywide Home Loans to falsely confirm his continued employment, after his employment had been terminated and prior to receiving the funds.
 
            United States District Court Judge Edward J. Davila allowed Foley’s continued release on a $100,000 bond and ordered him to return to court on April 30, 2011, at 9 a.m. for sentencing.                                                                            
 
            The maximum statutory penalty for Conspiracy to Commit Mail Fraud in violation of 18 U.S.C. § 1349 is 20 years in prison and a fine of $250,000 or twice the gross gain or loss, a mandatory special assessment and restitution.  The maximum statutory penalty for Conspiracy to Commit Bank Fraud in violation of 18 U.S.C. §1349 is 30 years in prison, a mandatory special assessment, and a fine of $1 million and restitution.  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. 
 
            Assistant U.S. Attorney Richard C. Cheng of the Computer Hacking and Intellectual Property (CHIP) Unit is prosecuting the case with the assistance of legal assistant Tracey Andersen.  The prosecution is the result of a lengthy investigation by the Federal Bureau of Investigation.

Some of the Prescriptions are Linked to Drug Overdose Deaths

 
            SANTA ANA, California – A Santa Barbara physician was arrested this morning on federal drug trafficking charges for allegedly writing prescriptions for powerful painkillers, such as OxyContin, for “patients” who were drug addicts – some of whom diverted the pills they received to the black market and or suffered fatal overdoses from the narcotics. 

            Julio Gabriel Diaz, 63, who operates the Family Medical Clinic in Santa Barbara, was arrested this morning at his Goleta residence by special agents with the Drug Enforcement Administration and officers with the Santa Barbara Police Department.

            Diaz was arrested pursuant to a criminal complaint filed in United States District Court that charges him with distribution of controlled substances.

            “The illegal sale and abuse of prescription narcotics is a growing problem that feeds addictions and leads to other criminal conduct,” said United States Attorney André Birotte Jr. “Many of the illegal prescription drugs that find their way to the street come from doctors who prescribe them for money without medical justification. These doctors are drug dealers and they will face stiff penalties in federal court.”

            The affidavit in support of the criminal complaint outlines evidence “that Diaz has written prescriptions for large quantities of controlled substances that are not medically necessary or indicated. As a result, highly addictive prescription controlled substances, including oxycodone [a drug often sold under the brand name OxyContin] and hydrocodone [a drug often sold under the brand names Vicodin and Norco], have been diverted from legitimate medical use into the community for an illegitimate use.”

            The affidavit discusses a series of fatal drug overdoses linked to narcotics prescribed by Diaz. A patient who died in November 2011 appeared to have been injecting prescription medication that was prescribed by Diaz. The investigation into that death found that “in the six weeks before [the patient]’s death, Diaz prescribed to [the patient] a total of 2,087 pills, or an average of 63 predominantly Schedule II and III pills per day.”

            Doctors, nurses and other personnel with Santa Barbara Cottage Hospital wrote to the Medical Board of California and gave statements to investigators to complain about Diaz, according to the affidavit. One letter to the Medical Board said Diaz “is often described as a ‘doctor you can get anything from’ by patients.” A therapist in the psychiatric department at Cottage Hospital told investigators that “people referred to Diaz as the ‘Candy Man’ and that people drove from out of town to see him ‘because they knew he was the man to go to for drugs.’”

            Cottage Hospital doctors believed that Diaz posed such a threat that they prepared a spreadsheet documenting emergency room visits by patients who had been prescribed narcotics by Diaz, according to the affidavit. “The spreadsheet demonstrated Diaz’s pattern of over-prescribing and the direct relationship between the prescriptions received and ER visits and admissions,” a DEA special agent wrote in the affidavit.

            Furthermore, two female patients who were admitted to the Cottage Hospital ER told hospital staff “that they were getting narcotics from Diaz in exchange for sexual favors,” according to the affidavit. “They alluded to numerous friends also receiving narcotics from Diaz in exchange for sexual favors.”

            The affidavit also outlines a study by one insurance company that documents nearly $1 million in claims to the company for prescriptions written by Diaz over a three-year period.

            “Prescription drug abuse has reached epidemic levels – in 2010, about 12 million Americans reported non-medical use of prescription painkillers,” said Timothy J. Landrum, DEA Special Agent in Charge. “DEA is committed to working with our law enforcement partners to ensure those who endanger our citizens by distributing these dangerous drugs for no medical purpose are brought to justice.”

            A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

            Diaz will be held in jail overnight pending a scheduled court appearance tomorrow afternoon in federal court in Santa Ana.

            The charge of illegal distribution of a controlled substance by a medical practitioner carries a penalty of up to 20 years in federal prison.

            The investigation into Diaz was conducted by the Drug Enforcement Administration and the Santa Barbara Police Department, which received the assistance of the California Medical Board.

United States Attorney Benjamin B. Wagner
Eastern District of California
___________________________
FOR IMMEDIATE RELEASE                                                         CONTACT: LAUREN HORWOOD
Friday, December 16, 2011                                                                                      PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov

Docket #: 2:11-CR-429 JAM
 
 
            SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced today that Anthony Vincent Zito, 48, of Saugus, pleaded guilty on Thursday to one count of conspiracy to commit fraud involving aircraft parts in interstate or foreign commerce.
 
            This case is the product of an extensive investigation by the Inspector General for the Department of Transportation and the FBI, along with the Inspectors General of the Department of Homeland Security and Department of Defense. Assistant United States Attorney Kyle Reardon is prosecuting the case.
 
            According to court documents, WECO Aerospace Systems Inc. is an aircraft parts repair and overhaul business. Its customers included private, for-profit aviation companies in California, Florida, Georgia, Pennsylvania, Indiana, and Arizona, as well as government entities who operated aircraft such as the City of Los Angeles and the Department of Homeland Security. WECO’s primary repair station was in Lincoln, and it had a second repair station in Burbank. Zito started working for WECO in Burbank in 1994, and by 2008, he had become the WECO Burbank Facility Manager.
 
            Under FAA regulations, repairs and overhauls must be conducted in accordance with component maintenance manuals (CMM). These manuals direct the steps that a certified aviation repairman must take to complete a repair or overhaul of an aircraft part in order to ensure the highest level of safety for repaired and overhauled aircraft parts and to ensure the part’s airworthiness.
 
            According to the plea agreement, Zito conspired with others in WECO to conceal certain facts about the repairs from customers and the FAA. Zito was aware that WECO Burbank did not perform some of the tests necessary to comply with the CMM, used parts that were not approved for service by the FAA, charged customers for used parts as if they were new, and falsely certified on FAA forms that parts had been repaired and overhauled in accordance with the CMM.
 
            Records show that between 2004 and 2007, WECO Burbank serviced 610 150SG starter generators at an average cost to the client of $1,300, and they serviced 534 23-Series starter generators at an average cost to the client of $1,100. These units came from at least 79 different victims. The total loss to customers at WECO Burbank for repairs and overhauls that were not done properly was approximately $1,380,400.
 
            Zito is scheduled to be sentenced by United States District Judge Kimberly J. Mueller on May 14, 2012. He faces a maximum statutory penalty of 15 years in prison, a fine of $500,000, and three years of supervised release. 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.
 
            Charges are pending against Jerry Edward Kuwata, 60, of Granite Bay; Michael Dennis Maupin, 58, of Arbuckle; Scott Hamilton Durham, 39, of Roseville; Christopher Warren MacQueen, 53, of Lincoln; and Douglas Arthur Johnson, 52, of Granite Bay. Their next court date is set for January 12, 2012. The charges are only allegations, and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

(760) 435-4688 HYPERLINK "mailto:Lmata@ci.oceanside.ca.us" Lmata@ci.oceanside.ca.us
(760) 801-1917 Cell December 15, 2011

REWARD OFFERED FOR BIG 5 ROBBERY INFORMATION

On December 5, 2011 the Big 5 Sporting Goods Store was robbed by three men at gunpoint. A significant number of firearms (rifles and shotguns) were stolen during the robbery. The suspects are still outstanding. The Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) has offered a reward of $5,000 for information leading to the arrest and conviction of the suspects responsible for the robbery. "A gun theft like this is a precursor to a violent crime and ATF and OPD will do whatever necessary to get these guns off the street, “ said John A. Torres, Special Agent in Charge ATF Los Angeles Field Division. “We cannot do this alone; we are asking for the public’s help in recovering these stolen firearms and have offered a reward for the public’s assistance.”   

San Diego County Crime Stoppers has offered an additional $1,000 for information leading to the arrest of the robbery suspects, making the total reward $6,000.

Anyone with information regarding the robberies can contact San Diego County Crime Stoppers at 1-888-580-8477 or ATF Gun Hotline 1-800-ATF-GUNS; (800) 283–4867

United States Attorney Melinda Haag
 Northern District of California
 

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

Obtained Fake ID’s To Cash Treasury Checks

 
SAN FRANCISCO – An Oakley, Calif., resident pleaded guilty yesterday to engaging in a conspiracy to file false claims with the Internal Revenue Service, United States Attorney Melinda Haag and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced.
 
According to his plea agreement, in June 2010, Jason Moore, aka John McCoy, obtained an Internet account in another person’s name, which was used to file false tax returns.  Both Moore and other participants in the scheme filed false tax returns using the computer at Moore’s residence.  The defendant then obtained fake identification to cash the fraudulent Treasury checks issued in the names of individuals whose identities had been stolen.  During 2010, $194,307 in false claims were filed from his residence.  Moore has agreed to repay the fraudulent claims that were issued as part of his plea agreement.
 
Moore, 23, formerly of Pittsburg, Calif., was indicted on June 9, 2011, and pleaded guilty to conspiring to file a false claim against an agency of the United States.  Moore is currently detained pending his sentencing, which is scheduled for Feb. 22, 2012.
 
             The maximum statutory penalty for each count of conspiring to file a false claim against an agency of the United States, in violation of Title 18 U.S.C. § 286, is 10 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.
 
Thomas Newman 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 Internal Revenue Service Criminal Investigation.

United States Attorney Melinda Haag
 Northern District of California
 

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

Buyers would pay up to $10,000 for rare Clipperton Angelfish
 

            SAN FRANCISCO  - Steven Robinson was sentenced yesterday to a month and a half in prison for his illegal importation of fifty-two Clipperton Angelfish, U.S. Attorney Melinda Haag announced.
 
            The Clipperton Angelfish (Holacanthus limbaughi) is a rare species of fish found only in the waters of Clipperton Island, an uninhabited atoll under French authority.  Fishing for the Clipperton Angelfish in the Clipperton atoll requires permission from the French government. Because the fish is so rare, each live fish can command several thousand dollars in the U.S. markets and up to $10,000 in the Asian markets.
           
            Robinson, 58, of Hayward, Calif., a tropical fish dealer, pleaded guilty on Aug. 17, 2011, before United States Magistrate Judge Nathaniel Cousins to a Class A misdemeanor for his role in unlawfully collecting the rare and unique species of fish and then importing the fish into the United States for commercial purposes under a false declaration.  In pleading guilty, Robinson admitted that in late April 2009, he took a four-day voyage to the Clipperton atoll for the purposes of finding and collecting Clipperton Angelfish without a permit.  Robinson further admitted that on May 4, 2009, through his company Cortez Marine International, he imported 52 Clipperton Angelfish but labeled the fish as a different and more common species of angelfish known as Holacanthus passer or “Blue passer,” which are found in Mexican waters where Robinson was permitted to fish. Robinson further admitted that once the fish were brought into the United States, he deceived federal wildlife authorities for several days by continuing to claim the fish were Blue passer when he knew the fish were Clipperton Angelfish.
 
            The sentence was handed down by U.S. Magistrate Judge Cousins. Judge Cousins also sentenced the defendant to a $2,000 fine and a one-year period of supervised release. The defendant is scheduled to begin serving the sentence on Jan. 30, 2012.
 
            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 one-year investigation by the United States Fish & Wildlife Service.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND December 14, 2011                                                                                                          (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

 
Admitted to Fraudulently Transferring More Than $1 Million from Bank Account of Deceased Contra Costa County Resident

 
            OAKLAND, Calif. – A New York attorney pleaded guilty in federal court in Oakland today for fraudulently transferring more than $1 million from the bank accounts of a deceased Contra Costa County resident and then failing to pay taxes on that income, United States Attorney Melinda Haag and Special Agent in Charge, IRS Criminal Investigations, Scott O’Briant announced.
 
Igor Purlantov pleaded guilty in front of United States District Court Judge Saundra B. Armstrong.  Following the guilty plea, Judge Armstrong sentenced Purlantov to 24 months in prison.
 
            In pleading guilty, Purlantov, 35, of New York, admitted to engaging in a scheme to defraud a deceased family friend by fraudulently adding himself on to the friend’s HSBC bank account in Geneva and then transferring more than $1 million to his own accounts in London before transferring some of the money to his accounts in New York.  The scheme occurred from October 2004 through February 2005.  The defendant then failed to pay taxes on the stolen income.
 
In his plea agreement, Purlantov accepted full responsibility and agreed to fully reimburse the beneficiaries of his deceased friend in the amount of $1,175,666 and to pay back taxes to the IRS in the amount of $293,048.25.
 
            Purlantov was charged by information on June 9, 2011, with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of tax evasion, in violation of 26 U.S.C. § 7201.  He pleaded guilty to both counts.
 
Purlantov was ordered by Judge Armstrong to self surrender to begin his sentence on Jan. 27, 2012.  The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison and a fine of $250,000, plus restitution.  The maximum statutory penalty for tax evasion, in violation of 26 U.S.C. § 7201, is five years in prison and $250,000 and restitution.
 
            Maureen Bessette is the Assistant U.S. Attorney who prosecuted the case with the assistance of supervisor legal tech Kathleen Turner.  The prosecution is the result of a two-year investigation by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation.

United States Attorney Benjamin B. Wagner
Eastern District of California
______________________________
FOR IMMEDIATE RELEASE                                                         CONTACT: LAUREN HORWOOD
Tuesday, December 13, 2011                                                                                   PHONE: 916-554-2706
www.usdoj.gov/usao/cae                                                                                  usacae.edcapress@usdoj.gov

Docket #: 2:11-cr-511-JAM

14 Individuals Charged in the Continuing Investigation

 
            SACRAMENTO, Calif. — A U.S. District Court in Sacramento today unsealed an indictment against four real estate investors and one auctioneer or “crier” for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Sharis A. Pozen, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division, and Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, announced.
 
The indictment, which was returned by a federal grand jury in Sacramento on December 7, 2011, charges Wiley C. Chandler, 47, of Lodi; Andrew B. Katakis, 47, of Danville; Donald M. Parker, 48, of Valley Springs; Anthony B. Joachim, 44, of Stockton; and W. Theodore Longley, 62, of Roseville, with conspiring with other unnamed co-conspirators to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions. The indictment also charges Longley, the crier, with aiding and abetting the conspirators.
 
Earlier today, Chandler was arrested at his home in Lodi, Katakis was arrested at his place of business in Modesto, and Longley was arrested at his home in Roseville. Parker surrendered himself to the U.S. Marshal today. All four were arraigned before U.S. Magistrate Judge Kendall J. Newman today in Sacramento. An arrest warrant has been issued for Joachim.
 
            According to the indictment, Chandler, Katakis, Parker, Joachim, Longley, and co‑conspirators agreed to suppress and restrain competition by rigging bids to obtain selected properties offered at public auctions in San Joaquin County. The conspirators also devised a scheme to fraudulently acquire title to selected properties sold at the public auctions and to divert money to co-conspirators that would have gone to the beneficiaries. The indictment alleges that the conspiracy lasted from at least September 2008 until at least October 2009. The charges are only allegations, and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
 
“The ongoing investigation demonstrates the Antitrust Division’s resolve to stop conspiracies that suppress competition at real estate foreclosure auctions.” said Acting Assistant Attorney General Pozen. “The division will continue to work with our law enforcement partners to investigate bid-rigging conspiracies in real estate foreclosure auctions in the Sacramento area and northern California.”
 
            U.S. Attorney Wagner said: “The indictment unsealed today alleges that the defendants engaged in conspiracy, deceit, and heavy-handed tactics to take advantage of a depressed housing market. This indictment follows a lengthy investigation and a series of guilty pleas by other participants in this activity. But our work is not done. Anticompetitive practices in real estate foreclosure auctions not only harm financial institutions, but drive down home values for other homeowners throughout the region. My office will continue to investigate and prosecute such conduct.”

            According to the court documents, after the conspirators’ designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group’s illicit profit, and it was divided among the conspirators in payoffs.
 
            To date, eight individuals have pleaded guilty in U.S. District Court for the Eastern District of California in connection with the investigation: Anthony B. Ghio, John R. Vanzetti, Theodore B. Hutz, Richard W. Northcutt, Yama Marifat, Gregory L. Jackson, Walter Daniel Olmstead, and Robert Rose. In addition to those who have pleaded guilty, on November 22, 2011, Kenneth A. Swanger was charged with participating in bid-rigging conspiracies at public real estate foreclosure auctions.
 
            Chandler, Katakis, Parker, Joachim, and Longley are charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine. They are also charged with conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.
 
            These charges arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the Antitrust Division’s San Francisco Office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office. Trial attorneys Anna Pletcher, Richard Cohen and Tai Milder from the Antitrust Division’s San Francisco Office and Assistant U.S. Attorney Russell L. Carlberg are prosecuting the case.
 
            These charges are part of efforts underway 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 task force is the national Mortgage Fraud Working Group, co-chaired by U.S. Attorney Wagner. For more information on the task force, visit www.StopFraud.gov.
 
            Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700, or contact the Sacramento FBI at 916-481-9110.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND December 8, 2011                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                                Jack.Gillund@usdoj.gov

 
SAN FRANCISCO – The sixth San Francisco-area member of La Mara Salvatrucha (MS-13) convicted in August 2011 on racketeering related charges was sentenced today to life in prison, 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.

Guillermo Herrera, aka “Sparky,” 21, was sentenced by U.S. District Judge William Alsup in the Northern District of California.  Herrera and his five codefendants were convicted by a jury on Aug. 30, 2011, after a five-month trial.  Codefendants Marvin Carcamo, aka “Cyco”, 31; Angel Noel Guevara, aka “Peloncito”, 31; Moris Flores, aka “Slow Pain”, 22; Erick Lopez, aka “Spooky”, 23; and Jonathon Cruz-Ramirez, aka “Soldado”, 22, were all sentenced to life in prison on Nov. 30, 2011. 
 
“Hopefully these sentences help to bring closure to the victims and family members who suffered needlessly from the senseless acts of violence that these individuals committed,” U.S. Attorney Haag said.  “These individuals terrorized a community.  For their crimes, they will spend the rest of their lives behind bars.”
 
“Mr. Herrera and his fellow MS-13 gang members spread fear and violence throughout the Bay Area,” said Assistant Attorney General Breuer.  “They committed horrific acts of assault and murder on behalf of their criminal enterprise.  Today’s sentence marks another important step forward in our steadfast efforts to protect Americans from violent crime.” 
 
            “While nothing can make amends for the suffering this defendant and his fellow gang members caused, the court’s actions ensure these cold-blooded criminals will never again be able to hold our communities hostage to fear,” said Special Agent Settles.  “And though this longstanding case is drawing to a close, HSI’s efforts are ongoing as we continue to work closely with local law enforcement to identify, attack and dismantle transnational street gangs that are attempting to stake out turf in the Bay Area.”
 
According to evidence presented at trial, MS-13 is a violent, transnational gang organized in local chapters called “cliques.”  Herrera was a member of the 20th street clique of MS-13.
 
According to evidence presented at trial, the 20th street clique operated in the Mission District of San Francisco since the 1990s, and grew more violent and aggressive as membership increased and the gang expanded.  The 20th street clique primarily warred with rival gang members, but also engaged in extortion and narcotics distribution.  The evidence at trial showed that Herrera joined the 20th street clique of MS-13 in 2007 and participated in the extortion, or “taxing” of a group of individuals who sold fraudulent documents on MS-13 turf, centered at 20th and Mission Streets.  MS-13 members demanded a portion of the profits these individuals earned and used violence and threats of violence to obtain their percentage.
 
According to evidence presented at trial, on July 11, 2008, Herrera shot and killed Armando Estrada, one of many individuals MS-13 extorted.  Cruz-Ramirez drove Herrera to 20th and Mission Streets, where Herrera spotted Estrada, chased him, and shot him in the back of the head at close range with a shotgun.  The motive for the murder was for MS-13 to maintain control over the group it extorted, a group that had resisted 20th street members the previous day.  Both Cruz-Ramirez and Herrera were convicted of the racketeering murder of Armando Estrada.
 
On Nov. 29, 2011, in a separate trial, a jury convicted 20th street member Danilo Velasquez of multiple racketeering offenses.  Velasquez’s codefendant, Luis Herrera, aka “Killer,” and brother of Guillermo Herrera, pleaded guilty mid-trial to seven racketeering related counts, including use of a firearm causing the murder of Moises Frias.  Luis Herrera is scheduled to be sentenced by Judge Alsup on Jan. 24, 2012.  Velasquez is scheduled to be sentenced on Feb. 14, 2012, and faces a maximum sentence of life in prison. 
 
            These cases were prosecuted by  Assistant U.S. Attorneys Wil Frentzen, Andrew M. Scoble, David Hall, and W.S. Wilson Leung of the Strike Force and Violent Crimes Section of the Northern District of California, and Trial Attorney Theryn G. Gibbons of the Organized Crime and Gang Section of the Justice Department’s Criminal Division, with the assistance of Legal Assistants and Paralegals Kevin Costello, Christine Tian, Marina Ponomarchuk, and Ponly Tu.  The case was investigated by Special Agents Benjamin Horton, John Moore, and Alicia MacDonald, and Linguist Brenda Rodriguez of ICE HSI, with the assistance of the San Francisco Police Department and the Daly City Police Department.

United States Attorney’s Office
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND December 8, 2011                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                                Jack.Gillund@usdoj.gov
 
 

Ordered to Pay $65 Million in Restitution

 
            SAN JOSE, Calif. – Ausaf Umar Siddiqui was sentenced today to six years in prison for his role in a kickback scheme to defraud Fry’s Electronics, Inc. (Fry’s), the United States Attorney’s Office, and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced.
 
            According to his plea agreement, Siddiqui worked for Fry’s from 1998 through December 2008.  In 2003, Fry’s named him its vice president of merchandising and operations.  In that position, he was responsible for the procurement of inventory for Fry’s stores.  Siddiqui, however, did not have the authority to execute vendor agreements that provided for kickbacks to him or to two companies he controlled. 
 
            According to court documents, beginning in 2004 and continuing through November 2008, Siddiqui devised a scheme to defraud Fry’s.  In order to induce Fry’s vendors to pay money to him and not Fry’s, he created and controlled two sham companies, PC International, LLC and International Marketing Resources, LLC (IMR), which conducted no business other than to receive fraudulently induced payments from Fry’s vendors.  Siddiqui represented to Fry’s that he would obtain merchandise from Fry’s vendors at a lower price if Fry’s authorized him, as vice president of merchandising and operations, to enter sale contracts on Fry’s behalf with Fry’s vendors directly instead of buying merchandise through sales representatives to whom the vendors would be obligated to pay sales commissions for arranging such purchases by Fry’s.  Siddiqui failed to disclose to Fry’s that he made secret deals with vendors for them to make payments to PC International and IMR based on the amount of merchandise purchased by Fry’s.  The vendors had secret agreements with Siddiqui to pay him via PC International or IMR, kickbacks to do business with Fry’s.  On numerous occasions, the vendors advanced kickback payments to him before Fry’s actually paid the vendors for the merchandise.  The vendors also made “loans” amounting to millions of dollars to him through PC International and/or IMR. 
 
            In addition, to imposing a six-year term of imprisonment, the court ordered Siddiqui to pay restitution in the amount of $65,584,864.  The court ordered the forfeiture of $16,578.22 of funds found in a PC International bank account, $38,329.92 of funds from a personal bank account, a 2006 Mercedes Benz CLS 55, a 2002 Ferrari 360, items found in his briefcase including $30,100 in cash, 3,100 British Pounds, 240 Euros, ten Wells Fargo debit cards and three SmartOne Visa debit cards.
 
            Siddiqui was indicted on Jan. 6, 2009, and charged with five counts of wire fraud, in violation of Title 18 U.S.C. § 1343 and four counts of money laundering in violation of Title 18 U.S.C. § 1957.  He pleaded guilty to one count of each.
 
Siddiqui was taken into custody immediately following the verdict.
           
            Thomas Moore is the Assistant U.S. Attorney who prosecuted the 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 December 7, 2011                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
            SAN FRANCISCO – James Stanley Ward, Edward George Locker and Richard Ferguson Tipton pleaded guilty in federal court in San Francisco to conspiracy to commit mail and wire fraud, United States Attorney Melinda Haag announced.  Ward and Locker entered their guilty pleas on Dec. 6, 2011.  Tipton entered his plea today.
 
            In pleading guilty, the defendants admitted that they deceived investors in Mountain View, California-based private money lender Jim Ward & Associates, Inc. (JWA), and its successor, JSW Financial, Inc. (JSW).  Using funds obtained from investors, the defendants, through JWA and JSW, arranged and serviced private money loans to borrowers who built single family homes.  JWA and JSW offered investors the opportunity to invest in fractional interests in these loans and in the Blue Chip Realty Fund, LLC (Blue Chip) and Shoreline Investment Fund, LLC (Shoreline).
 
            According to the defendants’ plea agreements, JWA and JSW generated and provided documents to investors that represented that Blue Chip and Shoreline made and invested in loans that were secured by deeds of trust on real property.  However, the defendants knew that those representations were false, because JWA and JSW did not secure investments in Blue Chip and Shoreline.
 
            Ward, 65, of Delaware, Ohio; Locker, 36, of Highland Heights, Ohio; and Tipton, 62, of Palo Alto, Calif., were indicted by a federal grand jury on June 21, 2011, and charged with eighteen counts alleging conspiracy to commit mail and wire fraud, mail fraud, and wire fraud, in violation of 18 U.S.C. Sections 1349, 1341, and 1343.  Under the terms of their plea agreements, Ward, Locker, and Tipton each pleaded guilty to conspiracy to commit mail and wire fraud.
 
            Ward and Tipton initially appeared in federal court on July 21, 2011, and were released upon posting $100,000 unsecured bonds.  Locker initially appeared on Aug. 9, 2011, and was also released on a $100,000 unsecured bond.
 
            Ward, Locker and Tipton are currently scheduled to be sentenced before Judge William H. Alsup in San Francisco, pursuant to the following schedule:  March 13, 2012 (Ward), June 5, 2012 (Locker), and June 26, 2012 (Tipton).
 
            The maximum statutory penalty for conspiracy to commit mail and wire fraud in violation of 18 U.S.C. Section 1349 is twenty years imprisonment and a fine of $250,000, or twice the gross gain or loss, whichever is greater, plus restitution.  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 E. Stevens is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim.  The prosecution is the result of a two-year investigation by the Federal Bureau of Investigation.  The United States Attorney’s Office recognizes the valuable assistance of the San Francisco Regional Office of the Securities and Exchange Commission in this matter.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND December 6, 2011                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 

 
Husband arraigned today; Wife to Appear December 8

 
            OAKLAND, Calif. – A federal grand jury in the Northern District of California indicted Mahendar “Mike” Singh and Helen Jean Singh (née Kearney), formerly of Sacramento, Calif., of conspiring to violate the federal sex trafficking law, United States Attorney Melinda Haag announced.  Filed on Dec. 1, 2011, the indictment alleges that the couple conspired to traffic teenage females to provide sex acts to customers in exchange for money and other things of value.                                                             
 
            Mahendar Singh was arraigned today and pleaded not guilty before United States Magistrate Judge Laurel Beeler in Oakland.  Helen Jean Singh is scheduled to be arraigned on December 8.  According to the indictment, Mahendar Singh, 40, and Helen Jean Singh, 22, recruited teenage females by promising money, drugs, and a “family-like environment,” maintained control over them by providing drugs, using physical force and threats of physical force, and fostering a climate of fear, and used the Internet to advertise their prostitution enterprise, which spanned from Sacramento County to multiple Bay Area counties.
 
            An affidavit filed in support of the criminal complaint filed in the same matter indicated that the couple was arrested on Aug. 20, 2011, after the South San Francisco Police Department responded to a motel near San Francisco Airport and found Mahendar Singh with a 19-year old and two 16-year olds.  The affidavit alleges that the defendants used an Internet website to advertise their victims and employed cell phones and text-messaging to make arrangements with customers.
 
            Mahendar Singh is presently being held in federal custody and is scheduled to next appear on Jan. 11, 2012, before United States District Judge Phyllis J. Hamilton in Oakland.  Helen Jean Singh was previously released on bond.  Her next hearing will be set at her arraignment, which is scheduled to take place on December 8. 
 
            The maximum statutory penalty for conspiring to commit sex trafficking, in violation of 18 U.S.C. § 1594(c), is lifetime imprisonment, a fine of $250,000, forfeiture, and restitution.  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. 
 
            Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal assistant Jeanne Carstensen.  The prosecution is the result of a joint investigation by U.S. Immigration and Customs Enforcement Homeland Security Investigations, and the Federal Bureau of Investigation, with the assistance of the South San Francisco Police Department and the San Mateo County District Attorney’s Office.
 
            Anyone who suspects instances of human trafficking are encouraged to call HSI, FBI, or the Human Trafficking Hotline at 1-888-3737-888.  Anonymous calls are welcome. 
 
            Please note, an indictment contains only allegations against an individual and, as with all defendants, Mahendar Singh and Helen Jean Singh must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND December 6, 2011                                                                                                            (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                               Jack.Gillund@usdoj.gov
 
                SAN FRANCISCO – A federal grand jury in San Francisco charged Brandon David Hill, 55, of Santa Rosa, Calif., with five counts of wire fraud in a false billing scheme that allegedly caused losses in excess of $1.6 million to approximately 846 victim companies throughout the United States and Canada, United States Attorney Melinda Haag announced. 
 
                The indictment, which was unsealed today, charged that Brandon Hill carried out a scheme to defraud from 2002 through 2008 while operating two lighting product distribution businesses: Premier Lighting Products, in Sonoma, and Marin Counties, Calif., and later, Superior Lighting Products, in Santa Rosa, Calif.  Allegedly, Hill sent invoices to companies falsely indicating that these companies owed payments for light bulbs that, in fact, the companies had never ordered.  According to the indictment, Hill typically initiated the scheme by calling the victim company by telephone and falsely claiming that the company had already placed a sales order to buy light bulbs.  Allegedly, Hill usually told the company that he would be shipping light bulbs to the company and asked for the shipping and billing addresses.  Thereafter, Hill usually sent, by facsimile, a fraudulent invoice to the company for the light bulbs that it allegedly ordered even though the company had never agreed to purchase the light bulbs.  Thereafter, Hill often followed up by telephone and sought payment on the false invoice.
 
                Brandon Hill was arrested by the United States Postal Inspection Service in San Francisco this morning.  He appeared before Magistrate Judge Elizabeth Laporte, who released him, and ordered that he appear again on Dec. 9, 2011, at which time conditions for his pre-trial release will be set.       
 
                The maximum statutory penalty for each count of wire fraud, in violation of 18 U.S.C. § 1343, is 20 years 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. 
 
                Assistant United States Attorney Adam A. Reeves is prosecuting the case with the assistance of Beth Margen and Rayneisha Booth.  The prosecution is the result of a long-term investigation by the United States Postal Inspection Service.    
 
                Please note, an indictment contains only allegations against an individual and, as with the defendants, Brandon Hill must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag
 Northern District of California
 

FOR IMMEDIATE RELEASE                                                                                     CONTACT:  JACK GILLUND December 2, 2011                                                                                                           (415) 436-6599  
WWW.USDOJ.GOV/USAO/CAN                                                                                Jack.Gillund@usdoj.gov
 
SAN FRANCISCO – Five San Francisco-area members of the La Mara Salvatrucha (MS-13) gang were sentenced yesterday to life in prison, announced U.S. Attorney Melinda Haag and  Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
 
Marvin Carcamo, aka “Cyco,” 31; Angel Guevara, aka “Peloncito,” 30; Moris Flores, 22; Jonathan Cruz-Ramirez, 22; and Erick Lopez, aka “Spooky,” 23, were sentenced by U.S. District Judge William Alsup in the Northern District of California. 
 
The five defendants were convicted by a jury on Aug. 30, 2011, after a five-month trial.  According to the evidence presented at trial, MS-13 is a transnational gang principally composed of individuals of Salvadoran descent that originated in Los Angeles and eventually spread throughout the United States and the world.
 
MS-13 is organized into local chapters, known as “cliques.”  The San Francisco clique — called the “20th Street clique” or simply “20th Street,” after the location it claimed as its home base — has existed since the early 1990s.  Since its founding, 20th Street’s principle purpose was to attack and kill rival gang members, including members of the various Norteño and Sureño gangs in the Bay Area of California, as well as individuals who cooperated with law enforcement or defied the gang’s will.
 
According to the evidence presented at trial, Carcamo and Guevara were MS-13 members since the early 2000s.  By 2007, they ascended to the leadership of 20th Street and pushed a new “program,” presented by gang leaders in Los Angeles and El Salvador, that increased violence against rivals and extorted “tax” payments from criminals.
 
Carcamo and Guevara directed members of 20th Street to threaten micaros — individuals who sold counterfeit identification cards, known as “micas” — who operated in 20th Street’s territory in the Mission District.  In addition, Carcamo and Guevara extended their ambitions by trying to take over the taxation of drug dealers in parts of the Tenderloin District, territory traditionally claimed by the 11th Street Sureño gang.  20th Street’s expansion attempt prompted complaints from the 11th Street Sureños, to which Carcamo and Guevara responded with threats of violence.
 
According to evidence at trial, by December 2007, Carcamo was arrested for robbery and Guevara was arrested for stabbing three individuals.  Flores took over the leadership of the 20th Street clique and, guided by Carcamo and Guevara from jail, continued to pursue the violent new program.  As a result, members of 20th Street became particularly violent in 2008.
 
Among other acts of violence, during the early morning of March 30, 2008, Lopez shot and killed Ernad Joldic and Philip Ng in the vicinity of Persia and Athens Street in the mistaken belief that the victims were Norteño gang members.  On May 31, 2008, because of micaro resistance to paying the tax that MS-13 demanded, Cruz-Ramirez shot and killed micaro leader Juan Rodriguez as Rodriguez sat in a car in the vicinity of Laura and Huron Streets. 
 
On July 11, 2008, following a fight the day before between members of 20th Street and micaros, Cruz-Ramirez drove fellow gang member Guillermo Herrera to the vicinity of 20th and Mission Streets, where Herrera chased down micaro Armando Estrada and killed him on a busy street.  During the early morning of July 31, 2008, in response to Flores’s order to retaliate for the non-fatal shooting of a 20th Street member’s family by a suspected Norteño, a group of 20th Street members pursued 14-year old Ivan Miranda and, believing he was a Norteño, stabbed him to death in the vicinity of Persia and Madrid Streets.
 
All five defendants were convicted of racketeering (RICO) conspiracy, conspiracy to commit murder in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering and possession of a firearm in furtherance of a crime of violence.  Guevara was also convicted of three counts of attempted murder in aid of racketeering and three counts of assault with a dangerous weapon in aid of racketeering for his role in trying to kill three individuals in December 2007.  Cruz-Ramirez was also convicted of the racketeering murder of Armando Estrada and related firearms charges.  Lopez was also convicted of the racketeering murders of Ernad Joldic and Philip Ng and related firearms charges. 
 
Co-defendant Guillermo Herrera was also convicted in August 2011 and is scheduled to be sentenced by Judge Alsup on Dec. 8, 2011.  He faces a mandatory minimum sentence of life in prison for a racketeering murder charge.
 
On Nov. 29, 2011, in a separate trial before Judge Alsup, a jury convicted Danilo Velasquez of multiple racketeering offenses.  According to evidence presented during trial, Velasquez took over the leadership of the 20th Street clique after Moris Flores’s arrest in October 2008.  He is scheduled to be sentenced on Feb. 14, 2012, before Judge Alsup and faces a maximum term of life in prison.
 
            These cases were prosecuted by  Assistant U.S. Attorneys Wil Frentzen, Andrew M. Scoble, David Hall, and W.S. Wilson Leung of the Strike Force and Violent Crimes Section of the Northern District of California, and Trial Attorney Theryn G. Gibbons of the Organized Crime and Gang Section of the Justice Department’s Criminal Division, with the assistance of Legal Assistants and Paralegals Kevin Costello, Christine Tian, Marina Ponomarchuk, and Ponly Tu.  The case was investigated by Special Agents Benjamin Horton, John Moore, and Alicia MacDonald of Homeland Security Investigations, with the assistance of the San Francisco Police Department and the Daly City Police Department. 

Ontario man allegedly possessed more than 500,000 explicit images

 
            RIVERSIDE, California –  An Ontario pipefitter, who allegedly amassed one of the largest collections of child pornography ever found, is among eight Inland Empire men arrested this morning by federal agents as part of a coordinated enforcement effort targeting the possession and trafficking of child pornography.

            Michael Peterson, 58, was taken into custody at his residence this morning by agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Peterson is charged in a three-count criminal complaint with possessing, receiving and distributing child pornography. In July, ICE HSI agents executed a search warrant at Peterson’s home and seized several computer hard drives and a laptop computer. A forensic analysis of those devices revealed more than 500,000 images and 7,500 videos of suspected child pornography. Peterson initially came under suspicion based on a lead obtained during an undercover investigation by Delaware-based HSI agents targeting a peer-to-peer file sharing network. 

            “Child exploitation crimes victimize the most vulnerable members of our society,” said United States Attorney André Birotte Jr. “The victimization of children for sexual purposes is one of the most heinous crimes imaginable, and that is why prosecuting child predators is one of the top priorities of the Justice Department.”

            Debra Parker, the assistant special agent in charge for ICE HSI in Riverside and San Bernardino counties, stated: “Every time these illegal images are produced, transmitted or viewed, a child is victimized. We owe it to the young victims in these cases to pursue the offenders aggressively, since many of the children who are sexually exploited by those who produce child pornography will bear the emotional scars for rest of their lives.”
            Another man arrested this morning was David Christopher Jelaca, a 37-year-old registered nurse from La Quinta, who is charged in a criminal complaint with distribution of child pornography, attempted distribution of child pornography to a minor, possession of child pornography and enticement of a minor for illegal sexual purposes. Agents from the Imperial Valley Internet Crimes Against Children Task Force, which includes HSI, began investigating Jelaca after he posted an advertisement on Craigslist soliciting a “Dirty Daddy who likes to share his daughter’s dirty panties.” In email exchanges with undercover Task Force agents, Jaleca acknowledged having had sexual contact with girls as young as 15 and fantasizing about sexual relations with girls as young as 12. Subsequently, agents searched Jelaca’s home, seizing computers and related media that were found to contain more than 26,000 still images and 55 movie files of suspected child pornography.

            The six other defendants arrested this morning are:

               Alexander Scott Branson, 25, of Upland, who was indicted for receiving and possessing child pornography;

               Ronald Sousa, 67, of Cathedral City, who was indicted for possessing and distributing child pornography;

               Bolivar Arnoldo Guillen, 59, of Rancho Cucamonga, who is charged in a criminal complaint with possession of child pornography;

               Ronald R. Jaenson, 66, of Colton, who is charged in a criminal complaint with possession of child pornography;

               John Anthony Serrano, 37, of Barstow, who is charged in a criminal complaint with receiving, possessing, and distributing child pornography;

               Anthony Starkweather, 20, of Mentone, who is charged in a criminal complaint with receiving, possessing, and distributing child pornography; and

            The eight defendants arrested this morning are scheduled to make their initial court appearances this afternoon in United States District Court in Riverside.

            A ninth man was arrested this week as part of the federal child exploitation crackdown. Enrique Garcia, 26, of Hemet, was arrested by FBI agents on Wednesday after being indicted by a federal grand jury for possessing and distributing child pornography. During an initial appearance in United States District Court in Riverside yesterday, Garcia was freed on bond and ordered to appear for an arraignment in federal court in Los Angeles on December 5.

            Indictments and criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed innocent unless proven guilty in court.

            The charge of possession of child pornography carries a statutory maximum sentence of 10 years in federal prison. The charges of distribution of child pornography and receipt of child pornography each carry a mandatory minimum sentence of five years in prison and a statutory maximum sentence of 20 years.

            The cases are part of the Department of Justice’s Project Safe Childhood, which brings together federal, state and local law enforcement authorities to locate, apprehend and prosecute individuals who exploit children using the Internet. For additional information on the PSC initiative, go to www.projectsafechildhood.gov.

            The investigations conducted by ICE are part the agency’s Operation Predator, a nationwide initiative to identify, investigate and arrest those who sexually exploit children. As part of Operation Predator, ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423.

            Suspected child sexual exploitation or missing children may be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.

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.