U.S. Attorney Duane A. Evans announced that KENZIE FAULK, age 58, of New Orleans, pled guilty yesterday to an Indictment charging him with possessing a firearm while being a convicted felon and conspiracy to possess marijuana with the intent to distribute. 

According to court documents, on October 16, 2016, FAULK, a convicted felon, attempted to board a Southwest Airlines flight, departing from Louis Armstrong New Orleans International Airport, while he was in possession of a fully loaded revolver.  TSA personnel located the weapon in a bag that FAULK was attempting to carry aboard the plane, which was destined to Los Angeles.  TSA personnel became aware that a gun was inside of the bag when the TSA x-ray scan machine alerted to its presence. TSA agents confiscated the gun prior to FAULK boarding the plane.

In the days following his arrest, members of the FBI learned that FAULK was trafficking marijuana though the U.S. postal service.  FBI agents conducted a search of FAULK’s residence and located a wooden crate that had been shipped from Los Angeles to New Orleans.  After executing a search warrant, FBI agents located and confiscated three cellophane wrapped packages of high-grade marijuana inside of the crate, which was addressed to FAULK.

For the charge of possessing a firearm by a convicted felon, FAULK faced a maximum sentence of 10 years imprisonment.  For his participation in the drug conspiracy, FAULK faces a maximum sentence of five years imprisonment.  Judge Nannette Jolivette-Brown will sentence FAULK on April 5, 2018.

U.S. Attorney Evans praised the work of the Federal Bureau of Investigation and the TSA in investigating this matter. Assistant United States Attorney Brittany L. Reed is in charge of the prosecution.

BOSTON – A Springfield couple and three Vermont residents were arrested today and charged with federal drug offenses including conspiracy to distribute heroin and crack cocaine.

Nia Moore-Bush, a/k/a “Nia Dinzey,” 27; and Dinelson Dinzey, 34, both of Springfield, Mass.; Joshua Foster, 40; Tracy Parsons, 45; and Jamieson Gallas, 36, all of Barre, Vt., were each charged in an indictment unsealed today on one count of conspiracy to distribute and possess with intent to distribute heroin and crack cocaine.

According to court documents, beginning in at least October 2017, the five defendants conspired to distribute heroin and more than 28 grams of crack cocaine. 

Moore-Bush, Foster, and Parsons face mandatory minimum sentences of five years and up to 40 years in prison, a minimum of four years of supervised release, and a fine of up to $5 million.  Due to prior felony drug convictions, Dinzey and Gallas face mandatory minimum sentences of 10 years and up to life in prison, a minimum of eight years of supervised release, and a fine of up to $8 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Andrew E. Lelling and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Office made the announcement today.  The case was investigated by the ATF’s Springfield Area Firearms Enforcement Task Force with assistance of the Internal Revenue Service’s Criminal Investigations in Boston, ATF’s Burlington Field Office, the Massachusetts State Police and the Vermont State Police. Assistant U.S. Attorney Katharine A. Wagner of Lelling’s Springfield Office is prosecuting the case.

The details contained in the indictment are allegations.  The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

SACRAMENTO, Calif. — Abolghasseni “Abe” Alizadeh, 59, of Granite Bay, pleaded guilty today to wire fraud, bank fraud and making false statements to a federally insured financial institution, U.S. Attorney McGregor W. Scott announced.

According to court documents, Alizadeh, a Sacramento-area commercial real estate developer, restauranteur and owner of Kobra Properties, came up with a scheme to fraudulently purchase land that he planned to develop. Banks usually loan up to 60–65 percent of the loan-to-value ratio (LTV) on undeveloped commercial property. (LTV ratio is the comparison between the amount of the loan and the value of the property.) To circumvent the banks and fraudulently get a higher level of financing, Alizadeh submitted altered purchase contracts to the banks that greatly inflated the purported purchase price. The banks, which competed for Alizadeh’s business, were unaware that the purchase prices were inflated and sometimes loaned well in excess of the loan-to-value ratio. By concealing the true purchase price from the banks, Alizadeh received substantial amounts of cash, sometimes millions of dollars, at the close of escrow and avoided making the full down payment or, in some instances, any down payment.

Alizadeh was assisted in this scheme by co-defendant Mary Sue Weaver, 64, currently of Scottsdale, Arizona and formerly of Lincoln, California, who was employed at a local title company. According to the plea agreement, Alizadeh would write checks for the down payment, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not.

On April 29, 2005, Alizadeh submitted a fraudulent purchase contract to Central Pacific Bank, which induced the bank to lend him nearly $4 million for the purchase of 10.3 acres of property. This loan represented over 96 percent loan-to-value ratio. Similarly, on October 21, 2005, Alizadeh received over $22 million in funding and loans to purchase the Turtle Island property, when in actuality, the original purchase price was $10 million. In March 2006, Alizadeh also falsely claimed to Bank of Sacramento that he was paying $36 per square foot for a piece of property where he intended to build a TGI Friday’s restaurant. In reality, Alizadeh was paying only $21 per square foot. This resulted in a $650,000 inflation of the true purchase price. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of over $22 million.

This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorney Michael D. Anderson and Heiko P. Coppola are prosecuting the case.

Alizadeh is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on March 30, 2018. Co-defendant Weaver pleaded guilty to one count of wire fraud and one count of bank fraud on December 15, 2017, and is scheduled for sentencing on March 23, 2018. Alizadeh and Weaver face a maximum statutory penalty of thirty years in prison on each count and a $1 million fine. 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.

SACRAMENTO, Calif. —Nathan Alexander Drury, 39, of Chico, pleaded guilty today to Production of Child Pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, between January 1, 2012, and December 1, 2014, Drury filmed a 47-second video of a nude child who was under the age of 12. The video that Drury produced shows the child being sexually abused.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, and the Chico Police Department. Assistant U.S. Attorney Brian A. Fogerty is prosecuting the case.

Drury has been in custody since he was arrested on March 23, 2015.

Drury is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on April 6, 2018. Drury faces a mandatory minimum sentence of 15 years in prison. The maximum statutory penalty is 30 years in prison and a $250,000 fine. 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.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

BOSTON – An MS-13 member pleaded guilty today in federal court in Boston to racketeering conspiracy involving the murder of a 15-year-old boy in Lawrence.

Josue Alexis DePaz, a/k/a “Gato,” 21, a Salvadoran national formerly residing in Lawrence, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy.  U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for April 6, 2018.

DePaz was identified as a member of MS-13’s Everett Loco Salvatrucha (ELS) clique, which operated in the greater Boston area. When interviewed by law enforcement officers, DePaz admitted that on July 5, 2015, he was one of two men who stabbed a 15-year-old boy to death in O’Connell Park in Lawrence. In conversations recorded by law enforcement during the investigation, MS-13 members identified DePaz as one of the men who murdered the victim. DePaz was subsequently arrested in a house in Somerville with several other MS-13 members. A search warrant at the house resulted in the recovery of a firearm, several large knives, photographs of MS-13 members flashing gang signs, and a large volume of MS-13 paraphernalia, including blue and white hats, bandanas and rosary beads. According to court documents, MS-13 members frequently wear blue and white items of clothing to signify their membership in the gang.            

After a three-year investigation, DePaz was one of 61 individuals named in a superseding indictment targeting the criminal activities of alleged leaders, members, and associates of MS-13 in Massachusetts. DePaz is the 28^th defendant to plead guilty in this case.

DePaz faces up to life in prison, five years of supervised release, and will be subject to deportation upon the completion of his sentence.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; Somerville Police Chief David Fallon; and Herndon (VA) Police Chief Maggie A. DeBoard made the announcement.

United States Attorney Duane A. Evans announced that LAZARO VILLATORO-BODDEN (“VILLATORO-BODDEN”), age 36, pleaded guilty on January 10, 2018, to a one-count Bill of Information for illegal use of a social security number in violation of Title 42, United States Code, Section 408(a)(7)(B). 

According to court records, VILLATORO-BODDEN knowingly and with the intent to deceive, falsely represented that a social security number was assigned to him by the Commissioner of Social Security when, in fact, as VILLATORO-BODDEN knew, the social security number had not been assigned to him. His deception and illegal use of the social security number was done for the purpose of obtaining boat registration documents from the Louisiana Department of Wildlife and Fisheries. At sentencing, which is currently set for April 11, 2018, VILLATORO-BODDEN faces a maximum term of imprisonment of five years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment. 

U.S. Attorney Evans praised the work of the U. S. Department of Homeland Security in investigating this matter.  Assistant U. S. Attorney Michael M. Simpson is in charge of the prosecution.

United States Attorney Ron Parsons announced that a Lower Brule, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting, and Impeding a Federal Officer.

Tyler Harmon, age 27, was indicted on February 15, 2017.  He appeared before U.S. Magistrate Judge Mark A. Moreno on January 10, 2018, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The Indictment alleges that on November 12, 2016, Harmon forcibly assaulted, resisted, opposed, impeded, intimidated, and interfered with a lieutenant from the Bureau of Indian Affairs, while said lieutenant was engaged in the performance of his official duties.

The charge is merely an accusation and Harmon is presumed innocent until and unless proven guilty. 

The investigation is being conducted by the Federal Bureau of Investigation.  Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.   

Harmon was released on bond pending trial, which has not been set.

Assistant U. S. Attorney Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968   

NEWS RELEASE SUMMARY– January 12, 2018

SAN DIEGO – Marchello Dsaun McCain, a convicted violent felon and the brother of Douglas McCain, the first known American who died fighting for the Islamic State of Iraq and al-Sham (ISIS), was sentenced in federal court today to 10 years in prison for his illegal possession of a cache of firearms and body armor and making false statements to federal agents involving international terrorism.

In a related case, the United States unsealed a two-count indictment charging Canadian national and former San Diego resident Abdullahi Ahmed Abdullahi with providing, and conspiring with Douglas and other individuals in the United States and Canada to provide, material support to terrorists engaged in violent activities in Syria, that is, a conspiracy to murder, kidnap and maim persons in a foreign country.

On March 9, 2014, Douglas McCain departed the U.S. and traveled to Syria where he joined and fought for ISIS.  Approximately five months later, on or about August 25, 2014, Douglas McCain was killed in Syria fighting a battle against the Free Syrian Army. Following Douglas McCain’s death, Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents interviewed Marchello McCain on several occasions from August 26, 2014 through January 23, 2015, when agents arrested him on federal firearms charges.

In January 2016, Marchello McCain, who was previously convicted of two felony crimes of violence in Minnesota involving assault with a firearm, pleaded guilty to five counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon.  Eight months later, in September 2016, he pleaded guilty to making false statements to FBI-JTTF agents concerning his assistance to and knowledge of individuals providing material support (personnel and money) to individuals engaged in violent terrorist activities abroad and ISIS, including Douglas McCain and Abdullahi.

As part of his guilty pleas, McCain admitted that he made material false statements to the agents about his knowledge of the purpose of his brothers’ travel abroad and the methods of payment and source of monies to fund such travel. McCain acknowledged that he possessed over nine firearms, which included a stolen firearm and several semi-automatic 9 mm pistols, an AR-15 style semi-automatic rifle and an M1 Carbine .30 caliber semi-automatic rifle with a large capacity magazine. Marchello McCain also admitted that on February 13, 2014, approximately three weeks prior to Douglas McCain’s departure to fight in Syria, Marchello McCain went to a San Diego gun range with his brother and shot firearms, including an AR-15 style semi-automatic rifle and a 12-gauge pump-action shotgun.

In imposing sentence, the court found that defendant’s obstructive conduct frustrated, delayed and thwarted the United States’ efforts to uncover the scope and membership of conspiracies to provide material support to terrorists and a foreign terrorist organization, ISIS.

“ISIS has brought the war on terror closer to home by directing and inspiring attacks in the U.S. and other countries, thereby putting American lives in danger,” said U.S. Attorney Adam Braverman. “By lying to federal agents, Marchello McCain delayed, frustrated and thwarted an investigation into a group that supplied U.S. and Canadian fighters to ISIS. We are committed to doing whatever it takes to protect American lives here and abroad.”

“Counterterrorism investigations are the highest priority investigations conducted by FBI Joint Terrorism Task Forces,” commented FBI Special Agent in Charge Eric S. Birnbaum. “When someone misleads or obstructs counterterrorism investigations, this can adversely affect investigative activity in these important cases. Today's sentence will hold Mr. McCain accountable for his actions and dissuade others from lying to law enforcement agents concerning international terrorism matters.”

The defendant’s lies, including his false statements regarding the source and means of the financing of Douglas’ travel were not only intended to prevent the United States from finding out about the involvement of Abdullahi and others, but were also intended to prevent the discovery of his own involvement.

As detailed in the United States’ pleadings, the defendant’s involvement included: agreeing to travel to Syria and join his brother in violent jihadist activities; assisting Douglas and others in traveling to Syria to engage in violent jihadist activities by taking Douglas to a gun range to target shoot semi-automatic weapons; depositing cash into his wife’s bank account and letting Douglas use his wife’s credit card to purchase plane tickets to Turkey, a known entry point for foreign fighters seeking to enter Syria, and to make hotel reservations; regularly communicating with Douglas and other individuals regarding the financial and logistical needs of foreign fighters in Syria; wiring $800 to an ISIS operative in Turkey to support Douglas and/or others engaged in violent jihadist activities; and engaging in obstructive conduct to conceal the material support conspiracies.

Notwithstanding the obstructive conduct of McCain, the United States continued its investigation of the terrorist activities of Douglas McCain, Abdullahi and others. On March 10, 2017, a federal grand jury in the Southern District of California returned a two-count sealed indictment charging Abdullahi with conspiring to provide, and providing, material support to terrorists.

On September 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi is currently detained in Canadian custody without bail, pending an extradition hearing scheduled for May 31, 2018.  On January 3, 2018, the Abdullahi indictment was unsealed.  Abdullahi is also facing charges in Canada for a January 9, 2014 armed robbery of an Edmonton jewelry store.

The Abdullahi indictment alleges that from in or about August 2013 through in or about November 2014, Abdullahi conspired with Douglas and other individuals to provide personnel and money to individuals engaged in terrorist activities in Syria, including the killing, kidnapping and maiming of persons. The charged conspiracy alleges the participation and/or assistance of Abdullahi and approximately 14 other individuals and spans four countries, the United States, Canada, Turkey and Syria.

In preparation for their travels, Douglas and other members of the conspiracy practiced with firearms in San Diego and Canada. According to the indictment, Abdullahi, Douglas and others agreed to travel to Syria to support and join terrorist fighters engaged in terrorist activity, including the killing, kidnapping and maiming of persons.

In order to raise funds to support their efforts to support and join terrorist fighters in Syria, members of the conspiracy encouraged others to commit crimes against the “kuffar” (an Arabic term meaning infidels or non-believers), such as theft. In furtherance of this material support conspiracy, the indictment alleges that on January 9, 2014, prior to the travel of Douglas and another coconspirator, Abdullahi committed an armed robbery of a jewelry store in Edmonton, Alberta, Canada, in order to finance the travel of Douglas and other members of the conspiracy to Syria.  Thereafter, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas – in order to finance the travel of foreign fighters from North America to support and join terrorist fighters engaged in terrorist activities in Syria.

Additionally, members of the conspiracy, including Abdullahi, wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting members of the conspiracy fighting and engaging in terrorist activity in Syria, including the killing, kidnapping, an maiming of persons. 

The government alleges that because of the efforts of Abdullahi and other coconspirators, beginning in November 2013 through November 2014, five coconspirators, including Douglas McCain, traveled from North America to Syria, via Turkey, and acted as foreign fighters in Syria engaging in terrorist activity in Syria, including the murder of persons.  Douglas McCain was killed in battle fighting for ISIS in August 2014.  The remaining four coconspirators were all killed in Syria in mid-November 2014.

DEFENDANT                                               Criminal Case No. 15CR0174-W

Marchello Dsaun McCain                               Age 35            San Diego, California            

SUMMARY OF CHARGES

False Statements Involving International Terrorism – Title 18, U.S.C., Sections 1001(a)(2)

Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)

Felon in Possession of Firearms and Ammunition – Title 18, U.S.C., Sections 922(g)(1)

Maximum penalty: 10 years’ imprisonment and $250,000 fine.

Felon in Possession of Body Armor by a Violent Felon – Title 18, U.S.C., Sections 931

Maximum penalty: 3 years’ imprisonment and $250,000 fine.

DEFENDANT                                               Criminal Case No. 17CR0622-W

Abdullahi Ahmed Abdullahi                          Age 33            Edmonton, Alberta, Canada  

SUMMARY OF CHARGES

Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)

Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)

Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)

Maximum penalty: 15 years’ imprisonment and $250,000 fine.

INVESTIGATING AGENCIES

San Diego Joint Terrorism Task Force

Federal Bureau of Investigation

Federal Air Marshal Service

Department of Homeland Security, Homeland Security Investigations

Department of Homeland Security, U.S. Border Patrol

SACRAMENTO, Calif. — Sergio Roman Barrientos, 64, of Poway, pleaded guilty today to bank fraud and conspiracy to commit wire fraud affecting a financial institution, U.S. Attorney McGregor W. Scott announced.

According to court documents, from about September 2004 through February 2008, Barrientos and co-conspirators Zalathiel Aguila and Omar Anabo operated an entity named Capital Access LLC, in Vallejo. They preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the distressed homeowners’ properties was then used for operational expenses of the scheme and personal expenses of Barrientos and his coconspirators. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

Co-defendant Zalathiel Aguila remains out of custody awaiting trial. The charges against him are allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt. Omar Anabo, charged elsewhere, is set for sentencing on April 27.

Barrientos is scheduled to be sentenced by Judge Garland E. Burrell Jr. on April 6, 2018. Barrientos faces a maximum statutory penalty of 30 years in prison and a $1 million fine. 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.

SYRACUSE, NEW YORK – Calvin Weaver, age 27, of Syracuse, pled guilty today to being a felon in possession of a firearm, possessing a firearm with a defaced serial number, and simple possession of cocaine.

The announcement was made by United States Attorney Grant C. Jaquith, Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), New York Field Division, and Frank Fowler, Chief of the Syracuse Police Department.

Weaver pled guilty to all three charges following a decision by Chief U.S. District Judge Glenn T. Suddaby denying Weaver’s motion to suppress evidence found on the day of his initial arrest.  In particular, Judge Suddaby found that both the stop of Mr. Weaver and the subsequent frisk of his person, which revealed that Mr. Weaver was carrying both a gun and plastic bags of cocaine, were lawful and available for use as evidence against him had the case proceeded to trial. 

At sentencing on May 18, 2018, Weaver faces up to 10 years in prison on the charge of being a felon in possession of a firearm and up to 5 years in prison on the charge of possessing a firearm with an obliterated serial number. Mr. Weaver also faces a fine of up to $250,000 and a term of post-imprisonment supervised release of up to 3 years on those two charges. On the possession cocaine charge, the defendant faces a maximum term of imprisonment of 1 year, a term of post-imprisonment supervised release of up to 1 year, and a $100,000 fine.

This case was investigated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Syracuse Police Department, and is being prosecuted by Assistant U.S. Attorney Robert S. Levine.

         LOS ANGELES – A former contract officer with the United States Department of Veterans Affairs was charged today with filing a false federal tax return and lying to VA investigators when he denied taking bribes from the operator of parking lots at the VA’s Los Angeles medical campuses.

         Ralph Tillman, 58, of Whittier, who was a VA contract officer until he resigned in 2014 after being confronted by special agents with the VA’s Office of Inspector General, was named in a criminal information filed today that charges him with making false statements and subscribing to a false tax return.

         In a plea agreement also filed today, Tillman agreed to plead guilty to the two felony offenses and admitted that he took well over $250,000 in bribes from the parking lot operator, Richard Scott, the owner of Westside Services LLC (WSS), which for years had a contract to operate parking lots across the VA Greater Los Angeles Healthcare System (VA GLAHS).

         Scott, 58, faces charges – including conspiracy and major fraud against the United States – contained in a 15-count indictment returned by a federal grand jury last month. Scott allegedly paid bribes to Tillman to conceal a scheme in which he allegedly failed to pay the VA more than $11 million generated by his operation of parking facilities at VA GLAHS. The vast majority of the activity authorized under the WSS contract took place at the West Los Angeles VA Medical Center near Westwood.

         As part of his duties at the VA, Tillman was responsible for managing contracts with “sharing partners,” such as WSS, which were required to perform services for the VA and share revenues with the agency. In his plea agreement, Tillman admitted that he approached Scott in late 2003 and solicited a bribe to pay for a family matter. One to two years later, Scott began making monthly cash payments to Tillman, with Scott personally delivering the bribes in sealed FedEx envelopes, according to the plea agreement.

         In return for the cash bribes, Tillman admitted in the plea agreement that he failed to scrutinize annual statements from WSS that Tillman knew contained inaccurately reported revenues and expenses. Tillman also admitted that he knew Scott was defrauding the VA out of millions of dollars, and that he entered into a contract extension with WSS in 2011 to continue the fraud and bribery scheme.

         During an interview with special agents with VA’s Office of Inspector General in September 2014, Tillman denied accepting money or anything of value from Scott. This conduct forms the basis of the false statements charge.

         Tillman specifically admitted that he took $286,250 from Scott from 2003 through last year. According to the plea agreement, Tillman continue to receive money from Scott after his retirement and these payments constituted “hush money.”

         Tillman failed to report the bribe payments on his federal tax returns, and he agreed to plead guilty to subscribing to a false tax return for the 2014 tax year.

         Tillman has agreed to appear in United States District for an arraignment on January 31.

         Once he pleads guilty to the two offenses charged in the criminal information, Tillman will face a statutory maximum sentence of eight years in federal prison.

         The VA contract with WSS was terminated in early 2017 after the VA settled a lawsuit that challenged the VA’s use of its West Los Angeles campus for any purposes not specifically related to the care and housing of veterans. Pursuant to an agreement, WSS was allowed to continue to operate the parking lots until this month.

         During an arraignment last month, Scott pleaded not guilty to the charges contained in the indictment. He is currently scheduled to go on trial before United States District Judge R. Gary Klausner on February 6.

         An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

         The cases against Tillman and Scott are the result of an ongoing investigation being conducted by the United States Department of Veterans Affairs, Office of Inspector General; the Federal Bureau of Investigation; and IRS Criminal Investigation.

         These cases are being handled by Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section.

         SANTA ANA, California – Three Southern California men have been indicted on federal mail fraud charges that allege they solicited homeowners on the verge of foreclosure with bogus promises of loan modifications with interest rates as low as 2 percent.

         The three men charged – Michael Paul Paquette, 34, of San Juan Capistrano; Allan Jessie Chance, 34, of Temecula; and Dennis Edward Lake, 59, of Costa Mesa –were arrested Thursday pursuant to an eight-count indictment returned by a federal grand jury on December 20.

         Paquette, Chance and Lake were arraigned on the indictment yesterday afternoon in United States District Court, where they all entered not guilty pleas and were ordered to stand trial on March 6. All three defendants were released on $15,000 bonds.

         According to the indictment, Paquette and Chance operated under aliases and told distressed homeowners that they worked for the Laguna Hills-based HAMP Services – which sounded similar to the Home Affordable Modification Program (HAMP), a legitimate government program which permanently reduced mortgage payments to affordable levels for qualifying buyers. 

         Paquette and Chance told victims that they were approved for a government-affiliated loan modification, but they needed to make three “trial payments” before the loan would be modified, according to the indictment. They also falsely told the victims that their money would be held in a trust or escrow account. Chance falsely claimed that he had experience in getting home loans modified because he had worked at Bank of America.

         After victims began making “trial payments,” their files were referred to Lake, who ran a Newport Beach-based business called JD United. The indictment alleges that Lake and his employees told victims that they were working on loan modifications, furthering hope that the loan modifications promised by Paquette and Chance were coming and that there was no need to contact law enforcement about the “trial payments” that had been paid.

         When being pitched on the loan modification service, the victims were never told that $800 of the “trial payments” went to JD United, and that Paquette and Chance received commission payments taken directly from the accounts where the “trial payments” were deposited. The indictment further alleges that none of the victim money went to the lenders or a government agency for a loan modification. 

         Investigators believe that over 500 victims nationwide paid at least $2.5 million dollars to the defendants and others in “trial payments.”

         The scheme allegedly ran from the beginning of 2014 through April 2015.  Paquette and others originally started soliciting victims claiming that they worked for Hope Services. After victims made many complaints about Hope Services, new victims were solicited using the name HAMP Services starting in late 2014. 

         Two other defendants involved in the scheme have pleaded guilty to federal charges and are pending sentencing.

         Paquette, Chance, and Lake are charged with conspiracy to commit mail fraud. Additionally, Paquette is charged in three substantive mail fraud counts, Chance in four mail fraud counts, and Lake in six mail fraud counts. If they were to be convicted, each defendant would face a statutory maximum sentence of 30 years in federal prison for each count.

         An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

         The case against Paquette, Chance and Lake is the result of an investigation by the Federal Bureau of Investigation and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). The Federal Trade Commission provided substantial assistance.

         This case is being prosecuted by Assistant United States Attorney Vibhav Mittal of the Santa Ana Branch Office.

         SANTA ANA, California – A federal judge today sentenced the former owner of Pacific Hospital in Long Beach to 63 months in prison for overseeing a 15-year-long health care fraud scheme that involved more than $40 million in illegal kickbacks paid to doctors and other medical professionals in exchange for referring thousands of patients who received spinal surgeries.

         The scheme operated by Michael D. Drobot led to more than $500 million in fraudulent bills being submitted during last five years of the scheme – much of which was paid by the California worker’s compensation system.

         Drobot, 73, of Corona Del Mar, was sentencing this morning by United States District Judge Josephine L. Staton, who noted that Drobot “introduced greed into the doctor-patient relationship.”

         Drobot pleaded guilty in 2014 to charges of conspiracy and paying illegal kickbacks, admitting that he orchestrated a wide-ranging fraud scheme in which “[t]housands of patients received surgeries at Pacific Hospital not knowing that [Drobot] bribed their physician to perform their surgery at Pacific Hospital,” prosecutors wrote in a sentencing memorandum filed with the court. Drobot “was motivated by greed and ultimately profited millions of dollars through the scheme.”

         From at least 1997 thorugh 2013, Drobot, who owned and/or operated Pacific Hospital during this time, ran a scheme in which he billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.

         “The patients believed that they were receiving conflict-free medical advice when, in fact, [Drobot] illegally incentivized their physician to perform the surgery at Pacific Hospital,” prosecutors said in court documents.

         The kickbacks were financed largely by money generated from Drobot’s sale of medical devices implanted into state workers’ comp patients during spinal surgeries. Drobot set up a scheme that exploited a now-repealed California law known as the spinal “pass-through” legislation, which permitted hospitals to pass on to workers’ comp insurers the full cost of medical devices implanted in spinal surgery patients.

         Drobot generated the kickback money through his own medical hardware company – the Newport Beach-based International Implants (I2) – to sell hardware used in spinal surgeries performed at Pacific Hospital. I2 submitted bills to Drobot’s Hospital and tacked on an additional $250 per device knowing that the “pass-through” law required to state to pay the full amount of the invoices.

         “Through the operation of I2, [Drobot] generated substantial profits that he used to pay at least $40 million dollars in kickbacks,” prosecutors wrote in court papers. “According to the former CFO of Pacific Hospital, his income, bonuses, and other compensation at the hospital was in excess of $20,000,000.”

         As part of the health care fraud scheme, Drobot paid bribes to California State Senator Ronald Calderon in exchange for Calderon performing official acts to keep the spinal pass-through law on the books. Calderon is currently serving a 3½-year sentence in federal prison after admitting that he took bribes from Drobot and undercover FBI agents.

         Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery. Some of the patients lived as much as hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities.

         Drobot and his co-conspirators concealed the kickback payments by entering into bogus contracts with the doctors, chiropractors, and others who received kickbacks. In reality, the contracts merely provided a cover story for the kickback payments.

         In addition to the prison term, which Drobot will begin serving on June 4, Judge Staton imposed a $500,000 criminal fine and issued an order directing Drobot to forfeit $10 million to the government. As part of the forfeiture judgment, which Judge Staton signed on Wednesday, Drobot was ordered to liquidate assets that include real estate and a 1965 Aston Martin, a 1958 Porsche, and a 1971 Mercedes Benz.

         Judge Staton has scheduled a restitution hearing for May 11.

         In addition to Drobot, prosecutors have charged seven other defendants in relation to the kickback scheme. The seven additional defendants – which include Drobot’s son, Michael R. Drobot– have pleaded guilty and are scheduled to be sentenced by Judge Staton over the next two months.

         The ongoing investigation into the spinal surgery kickback scheme is being conducted by the Federal Bureau of Investigation; IRS Criminal Investigation; the California Department of Insurance; and the United States Postal Service, Office of Inspector General.

         The case against Drobot was being handled by Assistant United States Attorneys Joseph T. McNally and Scott D. Tenley of the Santa Ana Branch Office, and Ashwin Janakiram of the Major Frauds Section.

Jackson, Miss – Kahari Scott, 24, of Meridian, Mississippi, was sentenced today by U.S. District Judge Henry T. Wingate, to serve 64 months in federal prison, followed by three years of supervised release, for possession of a firearm by a convicted felon, announced U.S. Attorney Mike Hurst and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives. Scott was also ordered to pay a $1,500 fine.

On September 23, 2016, Kahari Scott, was traveling west on Old Highway 80 in Meridian, Mississippi. Lauderdale County Sheriff’s Deputy Chris McFarland noticed that Scott was not wearing a seatbelt and pulled the vehicle over. Upon approaching the vehicle, Deputy McFarland noticed a handgun on the passenger seat. When asked for his driver’s license and proof of insurance, Scott stated that he did not have them on him and provided a fictitious name. When Deputy McFarland returned to his vehicle to call dispatch to check for any prior felony convictions, Scott opened the driver door and fled from the scene. Warrants were subsequently issued and Scott was arrested on November 15, 2016.

Scott has a previous conviction in the Circuit Court of Lauderdale County, Mississippi for the felony offense of possession of a stolen firearm.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lauderdale County Sheriff’s Department. It was prosecuted by Assistant United States Attorney Keesha D. Middleton.

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051
 
ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Ronald Lockwood, 44, of Rochester, NY, who was convicted of conspiring to distribute a controlled substance, was sentenced to 24 months in prison by U.S. District Judge David G. Larimer.

Assistant U.S. Attorney John J. Field, who handled the case, stated that Lockwood was prescribed large quantities of oxycodone by his heath care provider for a severe injury that he had sustained. Beginning in February 2015 and continuing until his arrest in February 2017, Lockwood conspired to sell his oxycodone pills to Daniel Volonino, Jr. and Michael Ingham, who, in turn, sold pills to others in the Rochester area.

Michael Ingham has been convicted and is awaiting sentencing. Charges are pending against Daniel Volonino, Jr. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.    

The sentencing is the result of an investigation by Special Agents of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division, and investigators with the Medicaid Fraud Control Unit of the New York State Attorney General, under the direction of Eric Schneiderman.

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Randy Rance, 56, of Tonawanda, NY, pleaded guilty to possession of child pornography, before U.S. District Judge Elizabeth Wolford. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Stephanie Lamarque, who is handling the case, stated that in December 2016, the defendant distributed child pornography to an undercover investigator. In January 2017, the Town of Tonawanda Police Department seized the Rance’s computer. Forensic examination determined that the defendant was in possession of hundreds of thousands of images of child pornography, some of which depicted prepubescent children less than 12 years old.

The plea is the result of an investigation by the Town of Tonawanda Police Department under the direction of Chief Jerome Uschold, and the Federal Bureau of Investigation under the direction of Special Agent-in-Charge Adam S. Cohen.
Sentencing is scheduled for April 17, 2018 at 1:00 p.m. before Judge Wolford.

NEWPORT NEWS, Va. – The owner of a Newport News seafood business was charged today by criminal information with conspiring to commit Lacey Act violations for blending foreign crab meat with Atlantic blue crab meat, then labeling the blended crab meat as “Product of USA”.

James R. Casey, 74, of Poquoson, is the owner and President of Casey’s Seafood, Inc. According to court documents, from at least July 2012 through June 2015, Casey knowingly conspired to replace Atlantic blue crab with crab meat from Indonesia, China, Thailand, Vietnam, and Central and South America. Casey and his co-conspirators falsely labeled at least 397,917 pounds of crab meat, with a retail value in the millions of dollars, as Atlantic blue crab and “Product of the United States”.

According to court documents, Casey directed employees to remove foreign crabmeat from the original shipper’s packaging containers, blend and combine foreign crab meat from one processor with crab meat from another processor, and place it into different packing containers with a label declaring that the contents were a “Product of USA,” despite knowing that the contents were imported crab meat. Casey also directed employees to place labels with “Product of the USA” on containers that covered up labels that stated “Product of Brazil” or “Product of China”.

Casey has been charged with conspiracy to defraud the United States, and faces a maximum penalty of five years in prison, if convicted. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Jeffrey H. Wood, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division, and Tim Donovan, Assistant Director for National Oceanic Atmospheric Administration Office of Law Enforcement, made the announcement. Assistant U.S. Attorney Eric M. Hurt and Trial Attorney Gary N. Donner of the Environmental Crimes Section are prosecuting the case.

The U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the Food and Drug Administration provided significant assistance during the investigation.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER.

A criminal information contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

BOISE – Father and son, Sergio Chavez-Verduzco and Sergio Chavez-Macias, of Burley, Idaho, were sentenced to federal prison for their roles in a drug trafficking conspiracy, U.S. Attorney Bart M. Davis announced.  Chavez-Verduzco was also sentenced for his participation in a continuing criminal enterprise.  Chief U.S. District Judge B. Lynn Winmill sentenced Chavez-Verduzco to 420 months in prison and Chavez-Macias to 144 months.  Judge Winmill also ordered that both serve five years of supervised release and to forfeit $420,000 in drug proceeds. 

In June of last year, after a five day trial, a federal jury found the defendants guilty.  Evidence presented in court showed that, in 2015 and early 2016, Chavez-Verduzco and Chavez-Macias were the source of supply to multiple large-scale methamphetamine traffickers in the Treasure Valley.  The evidence specifically identified certain methamphetamine traffickers whom the father and son supplied with hundreds of pounds of methamphetamine.  

The case was cooperative effort involving federal, state and local investigators from the Ada County Sheriff’s Office, the Drug Enforcement Administration, the City County Narcotics Unit of Canyon County, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Gooding County Sheriff’s Office, the Federal Bureau of Investigation and the Idaho State Police. 

The case was prosecuted by the Special Assistant U.S. Attorney hired by the Ada County Prosecuting Attorney’s Office and the Idaho High Intensity Drug Trafficking Area Board.  The Idaho High Intensity Drug Trafficking Board is a collaboration of local law enforcement drug task forces and prosecuting agencies dedicated to addressing regional drug trafficking organizations that operate in Ada, Canyon, and Malheur County.

ATLANTA - Adam L. Smith, the former Chief Procurement Officer for the City of Atlanta, has been sentenced to federal prison for conspiring to accept more than $40,000 in bribe payments from a vendor who obtained millions of dollars in city contracts.

“As the City of Atlanta’s Chief Procurement Officer, Smith was given great trust and power by its citizens.  He chose to serve his own financial interests rather than use that trust to serve the public,” said U.S. Attorney Byung J. “BJay” Pak. “His prison sentence is a strong reminder to those tempted to trade their public positions and authority for money – the U.S. Attorney’s Office and our law enforcement partners will not stand idly by. To the contrary, we are committed to the investigation and prosecution of public corruption offenses to combat the corrosion of people’s trust in their government.”

“Let this sentence serve as a further reminder of the FBI’s commitment to hold public officials accountable by exposing those who engage in criminal conduct,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “We ask that anyone who has information regarding similar actions by any public official to contact their nearest FBI field office.”

“Smith abused his position of authority for financial gain, and made a decision to accept bribes and award contracts which were not in the best interest of the public he was hired to serve,” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation. “Smith is being held accountable and the sentence given today should be a deterrence to those individuals who think that they can accept bribes without legal consequences.”

According to U.S. Attorney Pak, the charges, and other information presented in court: From 2003 to February 21, 2017, Smith served as the Chief Procurement Officer for the City of Atlanta, Georgia. As the Chief Procurement Officer, Smith oversaw the City of Atlanta’s purchasing activities and its expenditure of billions of dollars in public money for projects.

During Smith’s tenure as the Chief Procurement Officer, Atlanta awarded contracts worth millions of dollars to a particular vendor’s construction firm and joint venture projects of which the same vendor was a partner (the information does not identify the vendor by name).

From at least 2015 to January 2017, Smith met privately with the vendor on multiple occasions, frequently at local restaurants. During these meetings, Smith and the vendor discussed Atlanta procurement projects, bids, and solicitations. Often at the time of these meetings, the vendor was actively seeking contracts, projects, and work with Atlanta.

After most of these meetings, the vendor and Smith met in the restaurant’s bathroom, where the vendor paid Smith approximately $1,000 in cash. In return for the bribe payments, the vendor expected Smith to use his position and power to assist the vendor with contracting/procurement with Atlanta and to furnish the vendor with future benefits and favors when needed.

Given his position, Smith was annually required to sign a financial disclosure statement certifying that he had not received more than $5,000 in annual income from any corporation, partnership, proprietorship, other business entity, other than Atlanta.  Additionally, under Atlanta’s Procurement Code, Smith also had to “make a written determination as to the existence” of any “personal or organizational conflicts of interests exist” between vendors and Atlanta before awarding a vendor a solicited contract. Similarly, Atlanta’s Procurement Code mandated that Smith “certify to the city council” that the winning vendors had disclosed to Atlanta any “organizational and personal relationships” and that the “award of the contract [was] appropriate.”

Furthermore, in exchange for those cash payments:

• Smith met with the vendor on a regular basis;
• Smith provided the vendor with information and counsel regarding Atlanta’s procurement processes (among other information);
• When the vendor’s firm or joint venture became the successful bidder on an Atlanta contract or Request for Proposal, Smith approved and submitted the award of such procurement projects or bids to Atlanta’s mayor and city council for final authorization;
• Smith never disclosed his ongoing financial relationship with the vendor and/or the vendor’s firm on his Financial Disclosure Statements to Atlanta; and
• Smith never advised Atlanta’s City Council that the vendor’s firm or joint venture had failed to disclose its organizational and personal relationships with him.

From 2015 to January 2017, the vendor paid Smith more than $40,000 in cash.

On September 25, 2017, Smith, 53, of Atlanta, Georgia, pleaded guilty to conspiratorial bribery.  He was sentenced by U.S. District Judge Steven Jones to two years, three months in prison, three years of supervised release, ordered to pay $44,000 in restitution, and a $25,000 fine.

The Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation investigated this case.

Assistant U.S. Attorney Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, Assistant U.S. Attorney Jill E. Steinberg, Deputy Criminal Division Chief, and First Assistant U.S. Attorney Kurt R. Erskine prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.