NewzIntel.com

Category: Crime

  • MIL-OSI Security: Charlotte Man is Sentenced to Prison for Transporting Child Sexual Abuse Material

    Source: US FBI

    CHARLOTTE, N.C. – David Williams, 45, of Charlotte, was sentenced today to 140 months in prison followed by a lifetime of supervised release for transporting of child sexual abuse material (CSAM), announced Dena J. King, U.S. Attorney for the Western District of North Carolina. Williams was also ordered to register as a sex offender after he is released from prison.

    Robert M. DeWitt, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department, join U.S. Attorney King in making today’s announcement.

    “Williams possessed thousands of images and videos depicting the sexual abuse of children, yet his criminal conduct did not end there,” said U.S. Attorney King. “Williams produced a surreptitious recording of a prepubescent minor using the bathroom, and also used AI technology to modify and alter images of children he found on the internet to generate child sexual abuse material. This type of misuse of technology, and specifically generative AI, is at the forefront of our efforts to protect our children from this emerging threat and secure proper punishment for perpetrators.”

    According to filed court documents and today’s sentencing hearing, law enforcement received information from the National Center for Missing and Exploited Children (NCMEC) that an individual was using the internet to upload CSAM. Law enforcement identified the individual as Williams. On September 14, 2021, law enforcement conducted an interview of Williams. The defendant denied having any CSAM, at first. He later admitted to having CSAM and turned over some of his electronic devices to law enforcement. A forensic examination of Williams’s devices revealed that the defendant possessed images and videos depicting children being sexually abused and that Williams did not provide all of the relevant electronics.

    On September 16, 2021, law enforcement executed a search warrant at Williams’s residence, seizing additional electronics from the defendant. A forensic analysis of those electronics confirmed the presence of CSAM, including images and videos of children as young as toddlers being sexually abused. In total, Williams possessed over 4,000 videos and images of CSAM. Additionally, forensic analysis determined that Williams produced a surreptitious recording of a prepubescent minor using the bathroom.

    Forensic analysis further determined that Williams used an online AI chatbot to generate realistic CSAM by morphing or modifying images of clothed minors he found on the internet.  

    On June 12, 2023, Williams pleaded guilty to transportation of child pornography. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.

    In announcing Williams’s sentence, U.S. District Judge Max O. Cogburn, Jr., emphasized that “this is a serious crime with serious consequences.”

    The FBI and CMPD investigated the case.

    Assistant U.S. Attorney Daniel Cervantes of the U.S. Attorney’s Office in Charlotte prosecuted the case.

    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 U.S. 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 https://www.justice.gov/psc.

     

    MIL Security OSI –

  • MIL-OSI Security: Durham Man Arrested for Attempting to Provide Support to Terrorists

    Source: US FBI

    RALEIGH, N.C. – U.S. Attorney Michael F. Easley, Jr., announced today the unsealing of a criminal complaint against a Durham man charged with attempting to provide material support to ISIS, a designated foreign terrorist organization. Alexander Justin White, age 29, was arrested on Wednesday, December 4, 2024, as he was preparing to board an international flight from RDU Airport to Morocco. The complaint alleges that White was traveling overseas intent on joining ISIS. If convicted, White faces up to 20 years in prison.

    As alleged in the complaint, between May and October of 2024, White used an online account under the name “Sulaiman Al-Amriki” to make numerous posts supporting ISIS and the concept of violent jihad.  This allegedly included videos commonly used to recruit new members and to generate a passion for fighting as well as fundraising videos and several posts and reposts in reference to well-known ISIS supporters and scholars.  The complaint alleges that White’s online communications with like-minded individuals displayed an active effort to find a way to join ISIS overseas so that he could become a mujahideen with ISIS.  In addition, the complaint alleges that White was engaged in financial transactions to refugee camps which are well known for acting as a front to funnel money to ISIS members and their supporters.  White allegedly made online comments noting that he regretted not having traveled to join ISIS earlier, when it may have been easier through certain overseas routes which were now viewed suspiciously.  Believing that his opportunity had come to fruition, White allegedly took steps to make his intended travel appear as nothing more than a vacation when he in fact claimed that he would rather die than return to the United States.  After allegedly making various preparations, to include purchasing a personal combat medical kit, on December 4, White made efforts to board a flight bound for Morocco which he intended to use as a jumping point from which to join ISIS members in Africa.

    “We work closely with the FBI’s Joint Terrorism Task Force to shut down suspected terrorist activities in the United States, including American citizens willing to commit violence against our troops,” said U.S. Attorney Michael F. Easley, Jr. “We couldn’t do our work without strong local partners, willing to share their resources to protect our homeland.”   

    “The FBI Joint Terrorism Task Forces across the country leverage the resources, skills, and authorities of our federal, state, and local law enforcement partners to identify and combat terrorism threats, 24 hours a day, 7 days a week. In many ways, our JTTFs are our nation’s first line of defense against terrorism. The threats we face are bigger than any one law enforcement or intelligence agency can tackle, requiring not only a law enforcement partnership, but working with our communities to keep people safe,” said Robert M. DeWitt, the Special Agent in Charge of the FBI in North Carolina. The investigation into White is a result of the work of the Federal Bureau of Investigation’s (FBI) Raleigh-based Joint Terrorism Task Force (JTTF). The JTTF is a group of highly trained, locally based investigators, analysts, linguists, and other specialists from dozens of U.S. law enforcement and intelligence agencies that gather evidence, make arrests, provide security for special events, collect and share intelligence, and respond to threats and incidents at a moment’s notice. There are about 200 JTTFs across the country, including one in each field office, with hundreds of participating state, local and federal agencies.

    The Raleigh-based JTTF includes the Cary, Raleigh, and Durham Police Departments, the Wake County Sheriff’s Office, the N.C. State Bureau of Investigation, the N.C. State Highway Patrol, and the U.S. Citizenship and Immigration Service. Critical to this case was also the assistance of the Morocco General Directorate for Territorial Surveillance (DGST).

    Michael F. Easley Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. The FBI JTTF is investigating the case and Assistant U.S. Attorney’s Gabe Diaz and Jason Kellhofer, along with Trial Attorney David Andrew Sigler from the Department of Justice’s Counterterrorism Section, are prosecuting the case.

    Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for case number 5:25-CR-00009-M.

    A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty.

    MIL Security OSI –

  • MIL-OSI Security: Three Tulsa Men Sentenced for Armed Robbery

    Source: US FBI

    TULSA, Okla. – Today, U.S. District Judge Raul M Arias-Marxuach sentenced three Tulsa men for armed robberies in Catoosa and Owasso, announced U.S. Attorney Clint Johnson.

    “These three defendants were sentenced for violent crimes,” said U.S. Attorney Clint Johnson. “They robbed the victim in an occupied hotel and shot at others recklessly in a neighborhood. They were violent and dangerous. The Northern District of Oklahoma is safer with them behind bars.”

    Yonaton Perez, 20, was sentenced to 96 months imprisonment, followed by five years of supervised release for Obstructing, Delaying, and Affecting Commerce by Robbery and Possession of Methamphetamine with Intent to Distribute.

    Anthony Gabriel Calvillo-Rodriguez, 20, to 190 months imprisonment, followed by five years of supervised release for Obstructing, Delaying, and Affecting Commerce by Robbery; Carrying and Using a Firearm During and in Relation to a Crime of Violence; and Carrying, Using, and Brandishing a Firearm During and in Relation to a Crime of Violence.

    Anthony Alexander Bernal-Perez, 23, to 121 months imprisonment, followed by five years of supervised release for Obstructing, Delaying, and Affecting Commerce by Robbery; Carrying, Using, and Brandishing a Firearm During and in Relation to a Crime of Violence; and Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country.

    Court records show that on April 7, 2023, Perez was parked in a private parking lot behind a bar in Tulsa. Tulsa Police officers approached the vehicle. During the investigation, officers found that Perez possessed more than 660 grams of methamphetamine that he intended to sell. 

    In September 2023, Perez directed another person to get a hotel room in Catoosa with the intent of robbing the victim. While the victim was in the hotel room, Perez, Calvillo-Rodriguez, and Bernal-Perez robbed the victim. The victim was targeted because he was a drug dealer, wore flashy jewelry, and routinely carried drug proceeds on him. The defendants robbed the victim of more than $100k in jewelry and cash.

    In a third incident in October 2023, Calvillo-Rodriguez and Bernal-Perez were waiting in a parking lot in Owasso when four juveniles pulled up to their vehicle and robbed Calvillo-Rodriguez. When the juvenile robbers drove off, Calvillo-Rodriguez and Bernal-Perez followed the robbers and blocked their vehicle. Calvillo-Rodriguez and Bernal-Perez opened fire on the juvenile robbers in a neighborhood, striking several homes and vehicles. 

    All three men will remain in custody pending transfer to the U.S. Bureau of Prisons.

    The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), FBI, the Owasso Police Department, and the Tulsa Police Department investigated the case. Assistant U.S. Attorneys Kenneth Elmore and John Brasher prosecuted the case.

    This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results. For more information about PSN, please visit Justice.gov/PSN.

    MIL Security OSI –

  • MIL-OSI Security: Owners of Local Real Estate Investment Company Indicted in Federal Court for Fraud

    Source: US FBI

    PORTLAND, Ore.—An indictment was unsealed in federal court today charging the owners of a local real estate investment company with defrauding individual investors and commercial lenders out of more than $18 million.

    Robert D. Christensen, 54, of Sherwood, Oregon, and Anthony M. Matic, 55, of Damascus, Oregon, have been charged in a 21-count indictment with conspiracy to commit wire fraud, wire fraud, and money laundering.

    According to the indictment, from approximately January 2019 through June 2023, Christensen and Matic are alleged to have devised and carried out a scheme wherein they convinced individual investors to fund the purchase and renovation of undervalued residential real estate properties. After renovating the properties, Christensen and Matic claimed they would rent the properties to generate income and then refinance them to extract their increased value from the renovations. The pair further misled investors into believing they would be repaid their full principal investment along with interest as high as eight to fifteen percent and a large lump sum payout, all within periods as short as 30 to 90 days.

    Christensen and Matic’s scheme failed to generate the promised returns almost immediately and they began using new investments to repay earlier investors to keep their business afloat. When they were unable to raise enough money from new investors, Christensen and Matic are alleged to have devised a separate scheme to defraud commercial lenders. By December 2020, the pair began submitting loan applications with false financial information to different commercial lenders and, based on their misrepresentations, received millions of dollars in loans.

    In total, Christensen and Matic’s two schemes defrauded individual investors out of more than $11 million and commercial lenders out of more than $7 million.

    Christensen and Matic made their initial appearances in federal court today before a U.S. Magistrate Judge. Both were arraigned, pleaded not guilty, and released on conditions pending a 7-day jury trial scheduled to begin on October 29, 2024.

    Conspiracy to commit wire fraud and wire fraud are punishable by up to 20 years in federal prison and three years’ supervised release. Money laundering in punishable by up to 10 years in federal prison and three years’ supervised release. All three charges may also result in fines of up to $250,000 or twice the gross gains or losses resulting from the offense.

    This case was investigated by the FBI and IRS Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney Robert Trisotto.

    An indictment is only an accusation of a crime, and defendants are presumed innocent unless and until proven guilty.

    MIL Security OSI –

  • MIL-OSI Security: Alaska Man Indicted in D.C. on Charges of Distribution of Child Pornography

    Source: US FBI

                WASHINGTON – Brogan T. Welsh, 31, of Anchorage, Alaska, was indicted today in the District of Columbia on charges of distributing child pornography, announced U.S. Attorney Matthew M. Graves, Acting Chief Pamela Smith, of the Metropolitan Police Department (MPD), and Special Agent in Charge Wayne A. Jacobs, of the FBI Washington Field Office’s Criminal and Cyber Division.

                According to court documents, Welsh allegedly was a member of a private group on an internet platform that was dedicated to discussing the sexual exploitation of children and to sharing child sexual abuse materials. In December 2020, Welsh – who was then living near Richmond, Va. – contacted someone on the platform that he believed was the father of a minor child. In actuality, the “father” was an undercover agent with the FBI’s Washington D.C. Field Office. Over the course of several weeks, Welsh allegedly posted links in the group containing numerous images and videos depicting adult males sexually abusing prepubescent boys. Welsh repeatedly expressed his sexual interest in children, and a desire to travel from Virginia to the District of Columbia, in order to sexually abuse the purported child. 

                In an investigation previously thought to be unrelated, agents in the FBI’s Anchorage Office discovered chats between two users on the same social media application again discussing the sexual exploitation of children. The investigation revealed that Welsh was one of the individuals using the social media application to discuss his interest in sexually abusing children.

                On Oct.19, 2023, law enforcement executed a search warrant at Welsh’s Anchorage, Alaska, residence. Digital devices were recovered from the residence. Welsh was arrested in the early morning hours of Oct. 22, 2023. He has been ordered temporarily detained. 

                An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.

                This case is being investigated by the Metropolitan Police Department and the FBI’s Washington and Anchorage Field Offices. It is being prosecuted by Assistant U.S. Attorney Amy Larson, with assistance from Assistant U.S. Attorney Morgan Walker of the U.S. Attorney’s Office of Alaska.

    MIL Security OSI –

  • MIL-OSI Security: Defendant Sentenced to 16 Months in Prison for Mass Shooting Threat at University of Arizona

    Source: US FBI

    TUCSON, Ariz. – Michael Pengchung Lee, 27, of Tucson, was sentenced today by United States District Judge Rosemary Márquez to 16 months in prison, followed by three years of supervised release. The conditions of supervised release include substance abuse testing, a mental health assessment, location monitoring, and a no-contact provision that precludes defendant from being on the University of Arizona campus. Lee pleaded guilty on April 10, 2024, to Interstate Threats for transmitting threats through interstate communications to commit a mass shooting at the University of Arizona.

    The complaint previously filed in this case alleged that on October 22, 2023, Lee transmitted threats to commit a mass shooting at the university in a group chat on Snapchat. Lee is not a student at the university but expressed a desire to get revenge on “all the chads and stacies!!” “Chads” and “stacies” are commonly used terms by self-described involuntary celibates (incels). Lee made further reference to incel ideology and finished the conversation by stating “im gonna do it guys, my mind is made up and there’s nothing u can do or say to stop me.”

    On April 10, 2024, Lee admitted to sending multiple Snapchat messages on October 22, 2023, to a group chat threatening to commit a mass shooting at the University of Arizona. Lee further admitted that those messages referenced incel ideology, language, and motivations, including referring to a well-known, self-identified incel and mass shooter. Lee also admitted to threatening to commit a mass shooting at the university in at least two other Snapchat conversations, citing the same incel ideology and motivations.

    The Federal Bureau of Investigation and the University of Arizona Police Department, as part of the FBI’s Southern Arizona Violent Crime and Gang Task Force, conducted the investigation in this case. Assistant U.S. Attorney Adam Rossi, District of Arizona, Tucson, handled the prosecution.
     

    CASE NUMBER:           CR-23-01694-TUC-RM
    RELEASE NUMBER:    2024-086_Lee

    # # #

    For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
    Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

    MIL Security OSI –

  • MIL-OSI Security: Douglas Man Who Burned Two Churches Convicted of Hate Crimes and Arson

    Source: US FBI

    TUCSON, Ariz. – Yesterday, a federal jury in Tucson found Eric Ridenour, 58, of Douglas, guilty of all six arson and hate crimes counts, for the burning of two churches on May 22, 2023.

    Ridenour burned down two churches in Douglas, Arizona: Saint Stephen’s Episcopal Church and First Presbyterian Church. The churches were located on Church Square, a historic district in the border town of Douglas, approximately two hours southeast of Tucson. It is believed to have been the only intersection in the nation containing churches from four different denominations: Southern Baptist, Presbyterian, Episcopal, and Methodist. Trial testimony established that Ridenour intentionally started the fires in both churches because of his hostility towards their practice of having women and members of the LGBTQ community serve in church leadership roles. Ridenour was arrested on May 23, 2023.

    “Religious freedom is sacrosanct in America,” said United States Attorney Gary Restaino. “Arson of a church is deplorable. Arson motivated by objections to the religious principles of a church’s congregation is worse. Many thanks to Saint Stephen’s Episcopal Church and First Presbyterian Church, and their parishioners, for their collective courage in responding to this hate crime.”

    A conviction for Arson of Property Used in Interstate Commerce carries a minimum penalty of five years in prison and maximum penalty of 20 years in prison. A conviction for Obstruction of Free Exercise of Religious Beliefs by Fire carries a maximum penalty of 20 years in prison. A conviction for Using Fire to Commit Federal Felony carries a penalty of 10 years in prison. A second conviction for Using Fire to Commit Federal Felony carries a penalty of 20 years in prison.

    Sentencing is scheduled for October 22, 2024, before United States District Court Judge Scott H. Rash.

    The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, and the Douglas Police Department conducted the investigation in this case. Assistant U.S. Attorneys Austin Fenwick, Ben Goldberg, and Adam Rossi, District of Arizona, handled the prosecution.
     

    CASE NUMBER:            CR 23-00908-TUC-SHR
    RELEASE NUMBER:    2023-093_Ridenour

    # # #

    For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
    Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

    MIL Security OSI –

  • MIL-OSI Security: Lead Defendant in Long Running Drug Trafficking Conspiracy Extradited to the United States From Mexico

    Source: US FBI

    Justice Department Recognizes Mexican Government for Significant Assistance
     

    TUCSON, Ariz. – Rodrigo Paez-Quintero, a Mexican national, has been extradited from Mexico to the United States to face charges related to drug trafficking. Paez-Quintero’s surrender to U.S authorities after an extradition proceeding in Mexico demonstrates the ongoing cooperation between the United States and Mexico to combat the influx of dangerous drugs, including fentanyl, into the United States.

    Paez-Quintero made his initial court appearance today in the U.S. District Court for the District of Arizona in Tucson.

    “Our fight against international drug traffickers who spread poison into our communities requires all hands on deck,” said Deputy Attorney General Lisa Monaco. “This extradition is yet another example of our partnership with Mexican law enforcement to dismantle deadly cartels and bring drug kingpins to justice.”

    “This indictment alleges coordinated conduct to traffic fentanyl and other illicit drugs into Phoenix,” said United States Attorney Gary Restaino. “Many thanks to our federal, foreign and sovereign tribal partners for their teamwork and dedication.”

    Paez-Quintero is charged in an indictment with Conspiracy to Possess with Intent to Distribute Heroin, Methamphetamine, and Fentanyl and multiple counts of Possession with Intent to Distribute Heroin, Methamphetamine, and Fentanyl. Each count carries a maximum sentence of life in prison and a maximum fine of $10,000,000. In the year prior to March 2019, the indictment alleges defendant’s involvement in at least nine drug trafficking events from the Lukeville Port of Entry, through Ajo and up to Phoenix. According to numerous open sources, Paez-Quintero is the nephew of jailed Mexican drug kingpin Rafael Caro-Quintero.

    An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

    This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

    The Drug Enforcement Administration – Tucson, Homeland Security Investigations – Sells, and the Federal Bureau of Investigation – Tucson conducted the investigation in this case, with substantial assistance from the Tohono O’odham Nation Police Department. The United States Marshals Service assisted with the extradition efforts. The Justice Department’s Office of International Affairs worked with law enforcement partners in Mexico to secure the arrest and extradition of Paez-Quintero. The United States Attorney’s Office, District of Arizona, Tucson, is handling the prosecution.

    CASE NUMBER:            CR-19-2042-TUC-JAS
    RELEASE NUMBER:    2024-094_Paez-Quintero

    # # #

    For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
    Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

    MIL Security OSI –

  • MIL-OSI Security: Southern Arizona Man Indicted for Second Degree Murder

    Source: US FBI

    TUCSON, Ariz. – Last week, a federal grand jury indicted Santiago Luis Valencia, Jr., 34, of Tucson, on one count of Second Degree Murder. Valencia is an enrolled member of the Pascua Yaqui Tribe.

    It is alleged that on June 15, 2024, the victim and Valencia engaged in a verbal altercation that later turned physical. According to witnesses, Valencia was the initial aggressor and assaulted the victim by striking the back of the victim’s head against a windowsill on the exterior of the residence where the incident occurred. The victim died the following day as a result of the injuries sustained during the fight.

    Second Degree Murder carries a maximum penalty of life in prison, a fine of up to $250,000, and five years of supervised release.

    An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

    The Federal Bureau of Investigation conducted the investigation in this case. Assistant United States Attorneys Nathaniel J. Walters and Caroline Allen, District of Arizona, Tucson, are handling the prosecution.
     

    CASE NUMBER:           CR-24-04265-TUC-JGZ
    RELEASE NUMBER:    2024-096_Valencia

    # # #

    For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
    Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

    MIL Security OSI –

  • MIL-OSI Security: Man Pleads Guilty to Making Threats to Arizona Election Office

    Source: US FBI

    An Alabama man pleaded guilty today to sending threatening messages to election workers with Maricopa County Elections in Phoenix.

    “The functioning of our democracy requires that our country’s public servants be able to do their jobs without fearing for their lives,” said Attorney General Merrick B. Garland. “We have no tolerance for this kind of heinous criminal conduct and the danger it poses to people’s safety and to our democratic process. Threats and acts of violence targeting those who serve the public will be met with the full force of the United States Justice Department.”

    “Violent threats to election workers are threats to our democracy and democratic process. We cannot allow threats of violence against public servants to become normalized,” said FBI Director Christopher Wray. “The FBI takes seriously all threats of violence against public officials and will continue to pursue threats and acts of violence aimed at election workers.

    “Brian Ogstad repeatedly threatened to kill Maricopa County election workers and officials,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “As today’s guilty plea demonstrates, the Department is committed to holding accountable those who target election workers and officials with threats of violence. I am especially grateful to the Election Threats Task Force, which continues to spearhead the Department’s efforts to ensure that public servants who administer our elections can do their jobs free from threats and intimidation.”

    “This guilty plea should send a message to anyone who tries to take the rule of law into their own hands through vigilante justice,” said U.S. Attorney Gary M. Restaino for the District of Arizona. “But it also showcases the resilience of public servants. Thanks to the election professionals in Maricopa County who have worked courageously to maintain free and fair elections in spite of the threats received.”

    According to court documents, on Aug. 2, 2022, Arizona held primary elections for federal and state officeholders, including a gubernatorial primary election that received nationwide media coverage. From the day of the election through Aug. 4, 2022, Brian Jerry Ogstad, 60, of Cullman, sent multiple threatening direct messages to an Instagram social media account maintained by Maricopa County Elections. For instance, on or about Aug. 3, 2022, Ogstad stated, (1) “You did it! Now you are [expletive]. Dead. You will all be executed for your crimes”; (2) “[expletive] you! You are caught!  They have it all. You [expletive] are dead”; (3) “You are lying, cheating [expletive] . . . you better not come in my church, my business or send your kids to my school. You are [expletive] stupid if you think your lives are safe”; and (4) “You [expletive] are so dead.” On or about Aug. 4, 2022, Ogstad also stated, “[Y]ou people are so ducking [sic] stupid. Everyone knows you are lots [sic], cheats, frauds and in doing so in relation to elections have committed treason. You will all be executed. Bang [expletive]!”

    Ogstad pleaded guilty to one count of making a threatening interstate communication. He is scheduled to be sentenced on Oct. 21 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    The FBI Phoenix Field Office is investigating the case, with substantial assistance from the FBI Birmingham Field Office.

    Trial Attorney Tanya Senanayake of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Mary Sue Feldmeier for the District of Arizona are prosecuting the case.

    This case is part of the Justice Department’s Election Threats Task Force. Announced by Attorney General Merrick B. Garland and launched by Deputy Attorney General Lisa Monaco in June 2021, the task force has led the Department’s efforts to address threats of violence against election workers, and to ensure that all election workers—whether elected, appointed, or volunteer—are able to do their jobs free from threats and intimidation. The task force engages with the election community and state and local law enforcement to assess allegations and reports of threats against election workers, and has investigated and prosecuted these matters where appropriate, in partnership with FBI Field Offices and U.S. Attorneys’ Offices throughout the country. The task force is continuing this work and supporting the U.S. Attorneys’ Offices and FBI Field Offices nationwide as they carry on the critical work that the task force has begun.

    The task force is led by the Criminal Division’s Public Integrity Section and includes several other entities within the Justice Department, including the Criminal Division’s Computer Crime and Intellectual Property Section, Civil Rights Division, National Security Division, and FBI, as well as key interagency partners, such as the Department of Homeland Security and U.S. Postal Inspection Service. For more information regarding the Justice Department’s efforts to combat threats against election workers, read the Deputy Attorney General’s memo.

    To report suspected threats or violent acts, contact your local FBI office and request to speak with the Election Crimes Coordinator. Contact information for every FBI field office may be found at www.fbi.gov/contact-us/field-offices/. You may also contact the FBI at 1-800-CALL-FBI (225-5324) or file an online complaint at www.tips.fbi.gov. Complaints submitted will be reviewed by the task force and referred for investigation or response accordingly. If someone is in imminent danger or risk of harm, contact 911 or your local police immediately.

    MIL Security OSI –

  • MIL-OSI Security: Operation ‘Candyland’ Leads to Multiple Drug Arrests in Marianna and Forrest City

    Source: US FBI

          MARIANNA—A coordinated arrest operation took place this morning in Marianna and Forrest City as part of an ongoing federal drug investigation. Dubbed “Operation Candyland,” this investigation by the FBI, Arkansas State Police, the First Judicial Drug Task Force, and the St. Francis County Sheriff’s Office, focused on individual independent distributors of methamphetamine and cocaine in Lee and St. Francis Counties.

          Law enforcement began early this morning by searching for six suspects, all of whom were indicted for federal drug-trafficking crimes. Two others, who were already in custody when this morning’s roundup began, were also indicted. Five of the suspects were taken into custody: Eddie Bonner, 27, of Marianna, is charged with four counts of distribution of methamphetamine; Lance Hendrix, 39, of Marianna, is charged with four counts of distribution of methamphetamine; Leonard People, 26, of Marianna, is charged with one count of distribution of cocaine; Cedric Woods, 46, of Marianna, is charged with two counts of distribution of cocaine; and Jeremy Buchanan, 32, of Forrest City, is charged with one count of distribution of cocaine. Alfred Bonner, 28, of Marianna, and Clenton Wofford, 42, of Pine Bluff, are in custody stemming from unrelated criminal charges.  Alfred Bonner is charged federally, along with Eddie Bonner, with drug conspiracy and distribution of methamphetamine. Wofford is charged federally with one count of distribution of methamphetamine.  Most of the defendants who were arrested this morning will appear tomorrow afternoon for arraignment before United States Magistrate Judge Patricia S. Harris.

          This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF. The case is being prosecuted by Assistant United States Attorney Julie Peters.

          An indictment only contains allegations. A defendant is presumed innocent unless and until proven guilty.

    # # #

    This news release, as well as additional information about the office of the

    United States Attorney for the Eastern District of Arkansas, is available online at

    https://www.justice.gov/edar

    Twitter:

    @EDARNEWS

    MIL Security OSI –

  • MIL-OSI Security: Former Arkansas State Senator Sentenced for Role in Bribery Scheme

    Source: US FBI

    A former Arkansas state senator was sentenced yesterday to four years and two months in prison in the Western District of Missouri for accepting multiple bribes in connection with a multi-district investigation spanning the Eastern and Western Districts of Arkansas and the Western District of Missouri.

    Pursuant to his global plea agreement, Jeremy Hutchinson, 48, of Little Rock, pleaded guilty on June 25, 2019, in the Eastern District of Arkansas to filing a false tax return; pleaded guilty on June 25, 2019, to an information filed in the Western District of Arkansas to conspiracy to commit federal program bribery; and pleaded guilty in the Western District of Missouri on July 8, 2019, to conspiracy to commit federal program bribery. On Feb. 3, Hutchison was sentenced to three years and 10 months in prison for his convictions in the Eastern District of Arkansas and Western District of Arkansas. His sentence in the Western District of Missouri will run consecutive to the previous sentence for a total of eight years in prison.

    According to court documents in connection with his plea in the Western District of Missouri, Hutchinson was hired by then-chief operating officer Bontiea Goss as outside counsel for Preferred Family Healthcare Inc. (formerly known as Alternative Opportunities Inc.), a Springfield, Missouri-based healthcare charity. In exchange for payments and legal work, Hutchinson performed official acts on behalf of Preferred Family Healthcare, including holding up agency budgets and drafting and voting on legislation. Preferred Family Healthcare paid Hutchinson more than $350,000 in monthly retainer payments from May 2014 until 2017.

    In 2022, Preferred Family Healthcare agreed to pay more than $8 million in forfeiture and restitution to the federal government and the state of Arkansas under the terms of a non-prosecution agreement, in which the company admitted to the criminal conduct of its former officers and employees.

    Several former executives from the charity, former members of the Arkansas state legislature, and others have pleaded guilty in federal court as part of the long-running, multi-jurisdiction investigation, including the following:

    • Former Chief Operating Officer Bontiea Goss, previously of Springfield, Missouri, pleaded guilty in September 2022 to her role in a conspiracy to commit bribery concerning programs receiving federal funds.
    • Former Chief Financial Officer Tommy “Tom” Ray Goss, husband of Bontiea Goss, and also previously of Springfield, Missouri, pleaded guilty in September 2022 to participating in the conspiracy by embezzling funds from the charity, as well as by paying bribes and kickbacks to elected public officials in Arkansas. Tom Goss also pleaded guilty to one count of aiding and assisting in the preparation and presentation of a false tax return.
    • Former Chief Executive Officer Marilyn Luann Nolan of Springfield, Missouri, pleaded guilty in November 2018 to her role in a conspiracy to embezzle and misapply the funds of a charitable organization that received federal funds.
    • Former Director of Operations and Executive Vice President Robin Raveendran of Little Rock, Arkansas, pleaded guilty in June 2019 to conspiracy to commit bribery concerning programs receiving federal funds.
    • Former executive and head of clinical operations Keith Fraser Noble of Rogersville, Missouri, pleaded guilty in September 2019 to concealment of a known felony.
    • Former employee and head of operations and lobbying in Arkansas Milton Russell Cranford, aka Rusty, of Rogers, Arkansas, was sentenced to seven years in federal prison after pleading guilty to one count of federal program bribery.
    • Political consultant Donald Andrew Jones, aka D.A. Jones, of Willingboro, New Jersey, pleaded guilty in December 2017 to his role in a conspiracy to steal from an organization that receives federal funds.
    • Former Arkansas State Representative Eddie Wayne Cooper of Melbourne, Arkansas, pleaded guilty in February 2018 to conspiracy to embezzle more than $4 million from Preferred Family Healthcare.
    • Former Arkansas State Senator and State Representative Henry “Hank” Wilkins IV was sentenced in January 2023 for his role in a conspiracy to commit federal program bribery and devising a scheme and artifice to defraud and deprive the citizens of the state of Arkansas of their right to honest services.

    Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Jonathan D. Ross for the Eastern District of Arkansas, U.S. Attorney David Clay Fowlkes for the Western District of Arkansas, U.S. Attorney Teresa A. Moore for the Western District of Missouri, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, Special Agent in Charge Charles Dayoub of the FBI Kansas City Field Office, Special Agent in Charge James A. Dawson of the FBI Little Rock Field Office, and Acting Special Agent in Charge Thomas F. Murdock of the IRS Criminal Investigation (IRS-CI) St. Louis Field Office made the announcement.

    The FBI, IRS-CI, the Offices of the Inspectors General from the Departments of Justice, Labor, and the Federal Deposit Insurance Corporation investigated the cases.

    Senior Litigation Counsel Marco A. Palmieri, Director of Enforcement & Litigation for the Election Crimes Branch Sean F. Mulryne, and Trial Attorney Jacob Steiner of the Criminal Division’s Public Integrity Section; Assistant U.S. Attorney Stephanie Mazzanti for the Eastern District of Arkansas; Supervisory Assistant U.S. Attorney Randall Eggert and Assistant U.S. Attorney Shannon T. Kempf for the Western District of Missouri; and Assistant U.S. Attorneys Aaron L. Jennen and Steven M. Mohlhenrich for the Western District of Arkansas are prosecuting the separate criminal cases. Former Assistant U.S. Attorney Patrick Harris for the Eastern District of Arkansas and former Assistant U.S. Attorney Ben Wulff for the Western District of Arkansas provided significant assistance.

    MIL Security OSI –

  • MIL-OSI Security: Former Preschool Teacher’s Assistant Sentenced to 90 Years in Federal Prison for Producing Child Pornography

    Source: US FBI

    Defendant abused preschool-aged children in his care at Miss Selma’s School.

          LITTLE ROCK— Augustus “Gus” Shenker, 23, of Little Rock was sentenced to serve the next 90 years in federal prison for production of child pornography. Shenker was sentenced earlier today by United States District Judge Lee P. Rudofsky.

          In May 2021, FBI received a cyber tip that Dropbox user Augustus Shenker, using an email address that contained his name, possessed seven videos containing child pornography. Investigators determined Shenker’s address and learned that he was employed at Miss Selma’s School in Little Rock, an early education school with children from 18 months old to fifth grade.

          FBI agents obtained a search warrant for Shenker’s home and made contact with him at the school where he worked. Law enforcement seized Shenker’s iPhone and advised him a search warrant was being executed at his residence.

          A review of items seized from Shenker’s residence revealed six videos created in March 2021 that showed Shenker touching the buttocks and vagina of a preschool-age child in a classroom at Miss Selma’s School. His iPhone contained a hidden folder with 19 additional videos, all of which were taken in the same preschool classroom where Shenker worked. Shenker’s face is visible in several of the videos. In addition to the videos of abuse that Shenker produced himself, law enforcement located more than a thousand images of child sexual abuse on Shenker’s phone and other devices. Shenker later admitted making the videos of the preschool-age children during nap time.

          Shenker was first charged in a criminal complaint on May 18, 2021, when the FBI received the initial cyber tip. On June 1, 2021, after the discovery of the videos on his phone, a federal grand jury returned an indictment, charging Shenker with 22 counts of production of child pornography and one count of possession of child pornography. Shenker pleaded guilty to three counts of production of child pornography in December 2022. Judge Rudofsky sentenced Shenker to the maximum of 30 years on each count, to run consecutively, for a total of 90 years. In addition to the 90-year prison term, Shenker was sentenced to life of supervised release following imprisonment.  There is no parole in the federal system.  

          “We are grateful that Judge Rudofsky imposed the maximum sentence allowed by the law against Mr. Shenker,” said United States Attorney Jonathan D. Ross. “This sentence ensures that Mr. Shenker will spend the rest of his life in prison, which means he will never harm another child.  In the Eastern District of Arkansas, we will not waste time empathizing with adults who have a sexual interest in children, but rather resolve to fully investigate and prosecute each and every child predator. Our office, the FBI, and the National Center for Missing and Exploited Children will maintain our commitment to make sure that every criminal that harms and exploits children will be brought to justice.”

          “As an educator, Mr. Shenker was entrusted to support and protect our children,” said FBI Special Agent in Charge James A. Dawson. “Instead, he chose to exploit and manipulate the very children he was hired to teach. Today’s sentence ensures he will never again victimize our community. FBI Little Rock will continue to utilize all resources to protect innocent youth from predators who seek to harm them.”

          The investigation was conducted by the FBI Little Rock Child Exploitation and Human Trafficking Task Force and was prosecuted by Assistant United States Attorney Kristin Bryant.

    # # #

    This news release, as well as additional information about the office of the

    United States Attorney for the Eastern District of Arkansas, is available online at

    https://www.justice.gov/edar

    Twitter:

    @EDARNEWS

    MIL Security OSI –

  • MIL-OSI Security: Life in Federal Prison for Pope County Drug Trafficker Associated with White Supremacist Gang

    Source: US FBI

          LITTLE ROCK— Marcus Millsap, 55, of Little Rock, was sentenced to life in federal prison for conspiracy to violate racketeering laws, attempted murder in aid of racketeering, and conspiracy to distribute methamphetamine. Millsap was sentenced earlier today by United States District Judge Brian S. Miller.

          Millsap was indicted in September 2019 for his involvement in a white supremacist prison gang known as the “New Aryan Empire,” or NAE. NAE’s slogan is “to the dirt,” referring to the fact that members must remain in the organization until they die. Millsap was charged with, and ultimately convicted of, conspiracy to violate racketeering influenced corrupt organization laws, or RICO, attempted murder in aid of racketeering,  and drug conspiracy. Evidence at trial established that Millsap and others used the NAE as a corrupt organization to conduct racketeering activities, including drug distribution, solicitations of murder, and attempted murder.

          At trial, the prosecution presented evidence that in May 2014, Millsap sold methamphetamine to an individual named Bruce Hurley, who was working as a confidential informant. Once Hurley completed the controlled purchase of methamphetamine and reported back to law enforcement, a traffic stop located more methamphetamine in Millsap’s vehicle. Millsap was convicted in the methamphetamine case, and while on an appeal bond, Millsap solicited members and associates of NAE to kill Hurley for his work in cooperating with law enforcement against Millsap. In January 2016, other NAE members attempted to murder Hurley. That attempt failed, and NAE members and associates continued attempting to arrange Hurley’s death. This conduct resulted in Millsap’s conviction for attempted murder in aid of racketeering.

          “The United States will not tolerate the vile and outrageous crimes committed by members and associates of the New Aryan Empire or any other white supremacist group,” said Jonathan D. Ross, United States Attorney for the Eastern District of Arkansas. “If you are a member or associate of this or any other violent criminal organization, know that the United States will stop at nothing to dismantle and disrupt those who pose a threat to our communities and the future of our children, and the United States will seek significant prison sentences.”

          In addition to the life sentence, Millsap was ordered to pay a $200,000 fine and was sentenced to 10 years of supervised release should he ever be released from prison. The investigation was conducted by the Bureau of Alcohol, Tobacco, and Firearms; the Drug Enforcement Administration; the Federal Bureau of Investigation; the Pope County Sheriff’s Office; the Russellville Police Department; the U.S. Marshals Service; the U.S. Postal Inspection Service; the Arkansas State Police; 5th Judicial Drug Task Force; the Conway Police Department, and the Arkansas Army National Guard’s Counterdrug Unit. The case was prosecuted by Assistant United States Attorneys Liza Brown and Stephanie Mazzanti.  

          This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

    # # #

    This news release, as well as additional information about the office of the

    United States Attorney for the Eastern District of Arkansas, is available online at

    https://www.justice.gov/edar

    Twitter:

    @EDARNEWS

    MIL Security OSI –

  • MIL-OSI Security: Former Little Rock Police Officer Convicted of Receipt of Obscene Images and Possession of Child Pornography After Three-Day Jury Trial

    Source: US FBI

          LITTLE ROCK— A jury found former Little Rock Police Officer Eddie Scott Seaton, 55, of Cabot, guilty of receiving obscene images and possession of child pornography.  The jury returned their verdict Thursday afternoon to Chief United States District Judge D.P. Marshall, Jr., who presided over the three-day trial.  Judge Marshall will sentence Seaton at a later date.

          Testimony during the trial established that, on December 11, 2019, a Special Agent with the North Dakota Bureau of Criminal Investigations downloaded child pornography from someone using an IP address that returned to Seaton in Cabot.  Nineteen days later, law enforcement executed a search warrant at Seaton’s residence and seized electronic devices belonging to Seaton.  A search of Seaton’s computer revealed almost 300 images of child pornography and over 120 images of obscene anime.  The obscene anime depicted adults raping children and children engaged in sexually explicit conduct.  Law enforcement also located near Seaton’s computer stories handwritten by Seaton that described various instances of an adult female having sex with two minor boys.  Those writings described many of the actions depicted in the obscene anime seized from Seaton’s computer.

          “This case shows that even those who swear to uphold the law can violate it in the most despicable way,” said United States Attorney Jonathan D. Ross. “Commerce in sexually explicit images of children is not a victimless crime, and our office is committed to protecting those most vulnerable in our community. The jury today properly held Mr. Seaton accountable for his receipt and possession of images depicting the sexual exploitation of children.”

          The statutory penalty for receipt of obscene images is not less than five years and not more than twenty years imprisonment.  The statutory penalty for possession of child pornography is not more than ten years imprisonment.  Both offenses of conviction include a penalty of not more than a $250,000 fine and supervised release of not less than five years and not more than life.

          The investigation was conducted by the FBI Little Rock Child Exploitation and Human Trafficking Task Force and Arkansas State Police and is being prosecuted by Assistant United States Attorneys Kristin Bryant and John Ray White.

    # # #

    This news release, as well as additional information about the office of the

    United States Attorney for the Eastern District of Arkansas, is available online at

    https://www.justice.gov/edar

    Twitter:

    @EDARNEWS

    MIL Security OSI –

  • MIL-OSI Security: Drug Trafficking Organization Sentenced to More Than 184 Years Combined in Federal Prison

    Source: US FBI

    FAYETTEVILLE – The final member of a Northwest Arkansas drug trafficking organization was sentenced to federal prison for crimes related to the Distribution of Methamphetamine. The Honorable Judge Timothy L. Brooks presided over the sentencing hearings for the United States District Court in Fayetteville.

    According to court documents, beginning in approximately September of 2020, agents with the Drug Enforcement Administration (DEA) initiated an investigation into a drug trafficking organization operating out of the Fayetteville Division responsible for distributing methamphetamine. During the course of their investigation, investigators identified both Steven Warner and Elmer Francis as leaders of this local group.  Warner was further identified as a methamphetamine source of supply for the local group.

    Those members of the drug trafficking organization indicted federally have been sentenced as follows:

    Steven James Warner aka Misfit:  age 46, McAlester, Oklahoma – Conspiracy to Distribute more than 50 grams of Methamphetamine – 400 months imprisonment and 5-year term of supervised release.

    Elmer Nathaniel Francis aka Nathan:  age 65, Cave Springs, Arkansas – Conspiracy to Distribute more than 50 grams of Methamphetamine – 327 months imprisonment and 5-year term of supervised release.

    Vincent James Burrough: age 58, Spiro, Oklahoma – Conspiracy to Distribute more than 50 grams of Methamphetamine – 270 months imprisonment and 5-year term of supervised release.

    Charley Edward Rouell Jr.: age 52, Stigler, Oklahoma – Conspiracy to Distribute more than 50 grams of Methamphetamine – 250 months imprisonment and 5-year term of supervised release.

    Danial Wayne Plack: age 42, Fayetteville, Arkansas – Distribution of more than 50 grams of Methamphetamine – 188 months imprisonment and 5-year term of supervised release.

    Michael Winberry: age 52, Cave Springs, Arkansas – Conspiracy to Distribute more than 50 grams of Methamphetamine – 180 months imprisonment and 4-year term of supervised release.

    Cassandra Claire Webb: age 34, Fort Smith, Arkansas – Conspiracy to Distribute Methamphetamine – 60 months imprisonment and 3-year term of supervised release.

    Eunice Felicitas Cisneros: age 44, Moreno Valley, California – Conspiracy to Distribute more than 50 grams of Methamphetamine – 135 months imprisonment and 4-year term of supervised release.

    Landon Dale Thompson Jr.: age 42, Van Buren, Arkansas – Conspiracy to Distribute Methamphetamine – 87 months imprisonment and 3-year term of supervised release.

    Christie Michelle Yandell Warner: age 49, Yukon, Oklahoma – Aiding and abetting in the distribution of more than 50 grams of Methamphetamine – 180 months imprisonment and 5-year term of supervised release.

    Paul Eugene Wisdom: age 34, Fayetteville, Arkansas – Possession with Intent to Distribute Methamphetamine – 140 months imprisonment and 3-year term of supervised release.

    U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.

    The Drug Enforcement Administration Fayetteville Resident Office investigated the case, and were assisted by the following federal and local agencies: United States Marshals Service, ATF, FBI, Benton County Sheriff’s Office, Rogers Police Department, Benton County Drug Unit, Bentonville Police Department, 4th Judicial District Drug Task Force, Washington County Sheriff’s Office, Arkansas Department of Community Corrections – Probation and Parole, Arkansas Counter Drug Unit, and the Arkansas State Police.

    Assistant U.S. Attorney Kim Harris prosecuted the case for the United States.

    This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

    MIL Security OSI –

  • MIL-OSI Security: Justice Department Agrees to $215 Million Settlement Agreement Related to Assets of Internet Prostitution Ad Service Backpage.com

    Source: US FBI

    LOS ANGELES – The Justice Department today filed a settlement agreement reached between the parties in the civil forfeiture case involving Backpage.com, a now-shuttered internet forum for prostitution ads that included ads depicting sex work of children, in which $215 million in assets traceable to Backpage’s profits, and previously seized by the government from Backpage and its agents, will be forfeited to the United States.

    The forfeited assets – comprised of cash, cryptocurrency, and one parcel of real estate in San Francisco – will be available for a remission process to compensate victims of the crime. Details about the remission process will be announced at a later date. The forfeiture represents more than 80% of the value of the property seized or restrained in the case.

    “This settlement agreement marks a significant milestone in a criminal case involving the sexual exploitation and trafficking of countless women and children,” said United States Attorney Martin Estrada. “The nine-figure dollar amount forfeited in this case will allow for victims to recover and show that individuals who profit from such exploitation and trafficking risk both prison time and financial ruin.”

    For most of its 14-year existence, Backpage dominated the online market for illegal sex work advertising in the United States. While Backpage offered many categories of advertisements, in most years, more than 90% of Backpage’s revenue and activity occurred in the adult-related ad sections. Backpage monetized these advertisements by allowing a variety of pay-for options such as posting ads across multiple geographic areas and increased ad promotion. The company’s CEO eventually admitted that most of the website’s adult ads were for prostitution.

    In April 2018, several Backpage-related corporate entities, including Backpage LLC, pleaded guilty in Arizona federal court to conspiracy to engage in money laundering. Several Backpage owners and executives also have been convicted in this matter, including Michael Lacey, 76, of Paradise Valley, Arizona, was sentenced to five years in prison; Scott Spear, 74, of Phoenix, was sentenced to 10 years in prison; and John “Jed” Brunst, 72, of Phoenix, was sentenced to 10 years in prison. Lacey is free on bail pending appeal.

    According to court documents and evidence presented at trial, from September 2010 until its seizure by the United States in April 2018, Backpage was the internet’s leading forum for prostitution ads. The conspirators knowingly promoted prostitution via various marketing strategies. For example, they engaged in a reciprocal link program with an independent web forum that permitted “johns” to post reviews of prostitution acts with specific women. Additionally, the conspirators used an automated filter and human moderators to remove terms known to indicate sex-for-money, while still allowing the ads to be posted. Through this attempt to sanitize the ads, the conspirators sought “plausible deniability” for what the conspirators knew to be ads promoting prostitution. Over the life of the conspiracy, the conspirators earned more than $500 million. To preserve the money earned, Lacey, Spear, and Brunst laundered the money through numerous shell companies they created in multiple foreign countries.

    The United States Postal Inspection Service, the FBI, and IRS Criminal Investigation investigated this matter. The United States Attorney’s Office for the District of Arizona, which prosecuted the underlying criminal cases, provided substantial assistance.

    Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture and Recovery Section is prosecuting this case.

    The case name and number in this matter are United States of America v. $1,546,076.35 In Bank Funds Seized from Republic Bank of Arizona Account 1889, et al., CV 18-08420 (C.D. Calif.).

    MIL Security OSI –

  • MIL-OSI Security: Orange County Man Sentenced to More Than 15 Years in Prison for House Flipping Investment Scam That Raised More Than $17 Million

    Source: US FBI

    LOS ANGELES – A Costa Mesa man was sentenced today to 181 months in federal prison for running fraudulent investment schemes that raised more than $17 million by promising investors – several of them elderly – returns of up to 10% that would be generated through real estate deals that turned out to be bogus, and for disobeying a court order to surrender to federal authorities for violating the terms of his pretrial release.

    Brett Barber, 45, a former co-owner of the Newport Beach-based BNZ Capital One LLC and National American Capital, was sentenced by United States District Judge Otis D. Wright II, who scheduled a January 9, 2025, restitution hearing in this case.

    At today’s hearing, Judge Wright said, “There may not have been bloodshed, but this was real violence. [The defendant] knew these people were in their golden years, and he just took it all.”

    Barber pleaded guilty in October 2023 to two counts of wire fraud and one count of criminal contempt.

    “This defendant enriched himself through a fraudulent investment scheme that solicited millions of dollars from retirement funds belonging to his victims, including older adults,” said United States Attorney Martin Estrada. “My office is committed to protecting vulnerable communities from fraud and other harms. Today’s sentence sends a message to victims that we are here to fight for them and hold con artists and other fraudsters accountable for their actions.”

    From May 2019 to October 2021, Barber participated in two schemes to defraud victim investors out of their money and property.

    In the first scheme, BNZ Capital, its principals, and several marketers raised money by falsely representing that the firm bought and sold real estate projects and “flipped” real estate. Barber, co-conspirator Louis Zimmerle, 65, of Sacramento, and the marketers falsely promised investors a “guaranteed” return of between 8% and 10%, as well as potential bonuses based on successful deals. According to court documents, Barber told investors that their funds were “safe” and “FDIC insured.”

    In fact, while BNZ Capital did purchase some real estate, it did not take any substantial steps to develop parcels, nor did BNZ flip real estate for a profit. Rather, BNZ primarily used investor funds to pay Barber, Zimmerle, and others associated with the scheme, including purchasing residences where Barber and Zimmerle lived. Some of the investors’ money was used to repay earlier investors.

    During this scheme, Barber, Zimmerle, and the marketers solicited or caused to be transferred to BNZ Capital approximately $13.8 million from victim investors. Investigators estimate that actual losses resulting from this scheme are at least $7 million.

    Barber received and kept approximately $2,933,970 of investor money for his personal gain. At least five BNZ Capital investors were elderly, vulnerable victims who suffered substantial hardship because of the fraud committed against them.

    After Barber learned that federal officials were investigating BNZ Capital, he began a second fraudulent scheme, this time involving a company he formed in January 2021 called National American Capital (NAC). The NAC scheme operated, in substance, the same way as the BNZ Capital fraud. That is, Barber and marketers working at his direction lied to investors by saying their money would be used to fund real estate development projects. In fact, there were no such projects, and the only way NAC could repay earlier investors was by soliciting money from new investors.

    Specifically, in October 2021, Barber met with a person he believed was a prospective investor, but who in fact was an undercover law enforcement official. During this meeting, Barber told several lies: that NAC had been in business for 20 years, that it owned 10 parcels of land in Laguna Beach, and that it had purchased property in Newport Beach and turned it into a four-plex. None of these statements was true.

    This scheme caused a loss of at least $3.5 million. Barber received and kept at least $388,669 of investor money for his personal gain.

    During the BNZ Capital and NAC schemes, Barber failed to disclose to investors that he previously was barred from acting as or associating with a broker-dealer by the Financial Industry Regulatory Authority (FINRA).

    Finally, after a federal grand jury indicted Barber in October 2021, he was released on bond. In January 2023, a court found that Barber violated the terms of his pretrial release and ordered him to surrender to the United States Marshals Service by January 13. Barber willfully disobeyed the court’s order and failed to surrender. In March 2023, Barber was arrested in Santa Cruz County, California. He eventually was transferred to federal custody in Los Angeles, where he remains.

    Zimmerle pleaded guilty in January 2022 to one count of wire fraud for participating in the scheme. Judge Wright on June 3 sentenced Zimmerle to five years’ probation, fined him $10,000, and ordered him to pay $684,500 in restitution.

    In October 2021, the United States Securities and Exchange Commission (SEC) filed civil charges against Barber, Zimmerle, and BNZ Capital for fraudulently raising more than $13 million from over 100 retail investors. That litigation remains pending.

    The FBI investigated this matter. The SEC provided substantial assistance.

    Assistant United States Attorneys Maxwell K. Coll of the Cyber and Intellectual Property Crimes Section and Anne C. Gannon of the Orange County Office prosecuted this case.

    MIL Security OSI –

  • MIL-OSI Security: Northern California Man Arrested for Allegedly Flying Drone Over and Photographing Vandenberg Space Force Base

    Source: US FBI

    LOS ANGELES – A Northern California man has been arrested on a federal criminal complaint for allegedly flying a drone over and taking photographs of Vandenberg Space Force Base, the Justice Department announced today. 

    Yinpiao Zhou, 39, of Brentwood, is charged with failure to register an aircraft not providing transportation and violation of national defense airspace.

    Zhou was arrested Monday at San Francisco International Airport prior to boarding a China-bound flight and made his initial appearance Tuesday in United States District Court in San Francisco.

    Zhou remains in federal custody pending prosecutors’ appeal of a federal magistrate judge’s decision to release him. No plea was taken and his arraignment is expected to be scheduled in U.S. District Court in Los Angeles in the coming weeks.

    “This defendant allegedly flew a drone over a military base and took photos of the base’s layout, which is against the law,” said United States Attorney Martin Estrada. “The security of our nation is of paramount importance and my office will continue to promote the safety of our nation’s military personnel and facilities.”

    According to an affidavit filed on December 8 with the complaint, on November 30, 2024, drone detection systems at Vandenberg Space Force Base in Santa Barbara County detected a drone flying over the base. The drone systems detected that the drone flew for nearly one hour, traveled to an altitude of almost one mile above ground level, and originated from Ocean Park, a public area next to the base. Base security personnel went to the park, spoke to Zhou and another person accompanying him, and learned that Zhou had a drone concealed in his jacket – the same one that flew over the base. 

    Agents later searched Zhou’s drone pursuant to a federal search warrant and saw several photographs of Vandenberg Space Force Base taken from an aerial viewpoint. A search of Zhou’s cellphone showed Zhou conducted a Google search approximately one month earlier for the phrase “Vandenberg Space Force Base Drone Rules” and messaged with another person about hacking his drone to allow it to fly higher than it could otherwise.

    Zhou is a Chinese citizen and lawful permanent resident of the United States, most recently returning to the United States from China in February 2024. The person accompanying Zhou at Ocean Park most recently entered the United States from China on November 26.

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

    If convicted, the defendant would face a statutory maximum sentence of four years in federal prison.

    The FBI is investigating this matter.

    Assistant United States Attorney Kedar S. Bhatia of the Terrorism and Export Crimes Section and Trial Attorney Benjamin Koenigsfeld of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. 

    MIL Security OSI –

  • MIL-OSI Security: Pasadena Doctor Agrees to Plead Guilty to Conspiring with Attorney to Bilk More Than $3 Million From California’s Workers’ Compensation Fund

    Source: US FBI

    SANTA ANA, California – A physician who worked for an Inland Empire medical company has agreed to plead guilty to conspiring to defraud California’s workers’ compensation fund of millions of dollars by continuing to work on workers’ compensation matters after being suspended due to a prior health care fraud conviction, the Justice Department announced today. 

    Dr. Kevin Tien Do, 59, of Pasadena, agreed to plead guilty to one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. He is expected to make his initial appearance this afternoon in United States District Court in Santa Ana.

    In his plea agreement, Do admitted that, from October 2018 to February 2023, he conspired to defraud the state of California of millions of dollars of health care funds by defrauding California’s Subsequent Injuries Benefits Trust Fund (SIBTF). The California SIBTF is a special fund administered by California’s workers’ compensation program to provide additional compensation to injured workers who already had a disability or impairment at the time of a subsequent injury.

    Beginning in 2016, Do began to work for Liberty Medical Group Inc., a Rancho Cucamonga-based medical company, for which he would draft SIBTF-related medical reports that Liberty would then bill to the California SIBTF program. In October 2018, California suspended Do from participating in California’s workers’ compensation program, which included the SIBTF, because he had previously been convicted of federal health care fraud in 2003. Despite his suspension, Do continued to work for Liberty on SIBTF-related workers’ compensation matters.

    Do continued to perform similar actions for Liberty that he had been doing before his October 2018 suspension, including compiling and editing reports related to the SIBTF program. To conceal that Do was unlawfully continuing to participate in the workers’ compensation SIBTF program after his suspension, Liberty’s owner came up with a plan. That plan was that Do would continue to author the SIBTF-related reports, which Liberty would then continue to mail to the California SIBTF for payment. Rather than listing Do’s name on the billing forms and the attached medical reports mailed to the California SIBTF, like they had had done before Do’s suspension, Liberty instead fraudulently listed other doctors’ names on the billing forms and attached medical reports, even though Do had drafted and compiled the reports. Do admitted that Liberty was paid more than $3 million by California SIBTF for such reports that Liberty mailed to the California SIBTF for payment after Do’s October 2018 suspension.

    Do’s plea agreement also details that Liberty’s owner edited Do’s medical reports, even though that co-conspirator was not a doctor or other licensed medical professional. 

    Under California law, shareholders/owners of a medical corporation must be licensed in the practice of medicine or other related medical fields, such as a psychologist, registered nurse, or licensed physician assistant.

    In his plea agreement, Do admitted that real owner of Liberty and Do’s co-conspirator was another person who was not a doctor or other medical professional, but rather, was a California attorney then employed as a prosecutor for the Orange County District Attorney’s Office, and who later became an Orange County Superior Court judge during the conspiracy. That true owner who was Do’s co-conspirator not only was a signatory on Liberty’s bank account, but also issued and signed Liberty’s checks to Do and others. The plea agreement specifies that much of the more than $3 million that the SIBTF paid Liberty during the years following Do’s suspension then flowed to another company controlled by Liberty’s owner and his wife, which totaled to more than $1.5 million.

    Do also admitted that he failed to accurately report to the IRS all the money he had been paid by Liberty. Do admitted that on his 2021 tax return, he failed to report approximately $66,227 of the income that Liberty paid him.

    Once Do enters his guilty plea, he will face a statutory maximum sentence of 20 years in federal prison for the mail fraud count and up to three years in federal prison for the tax fraud count. 

    The FBI, IRS Criminal Investigation, and the California Department of Insurance are investigating this matter.

    Assistant United States Attorneys Charles E. Pell of the Orange County Office and Ryan J. Waters of the Asset Forfeiture and Recovery Section are prosecuting the case.

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  • MIL-OSI Security: Santa Paula Doctor Sentenced to Two Years in Federal Prison for Role in Hospice Fraud That Bilked Medicare Out of $3.2 Million

    Source: US FBI

    LOS ANGELES – A Ventura County physician who worked for two Pasadena hospices was sentenced today to 24 months in federal prison for defrauding Medicare out of more than $3 million through claims for medically unnecessary hospice services.

    Dr. Victor Contreras, 69, of Santa Paula, was sentenced today by United States District Judge André Birotte Jr., who also ordered him to pay $3,289,889 in restitution. 

    Contreras pleaded guilty on July 24 to one count of health care fraud.

    From July 2016 to February 2019, Contreras and co-defendant Juanita Antenor, 62, formerly of Pasadena, schemed to defraud Medicare by submitting nearly $4 million in false and fraudulent claims for hospice services submitted by two hospice companies: Arcadia Hospice Provider Inc., and Saint Mariam Hospice Inc. Antenor controlled both companies.

    Medicare only covers hospice services for patients who are terminally ill, meaning that they have a life expectancy of six months or less if their illness ran its normal course.

    Contreras falsely stated on claims forms that patients had terminal illnesses to make them eligible for hospice services covered by Medicare, typically adopting diagnoses provided to him by hospice employees whether or not they were true. Contreras did so even though he was not the patients’ primary care physician and had not spoken to those primary care physicians about the patients’ conditions. Medicare paid on the claims supported by Contreras’ false evaluations and certifications and recertifications of patients.

    In total, approximately $3,917,946 in fraudulently claims were submitted to Medicare, of which a total of approximately $3,289,889 was paid.

    According to Medical Board of California records, Contreras is a licensed physician in California, but has been on probation with the Board since 2015 and is subject to limitations on his practice. 

    Antenor remains at large. Co-defendant Callie Black, 66, of Lancaster, who allegedly recruited patients for the hospice companies in exchange for illegal kickbacks, has pleaded not guilty and is scheduled to go to trial on March 4, 2025.

    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 United States Department of Health and Human Services Office of Inspector General, the FBI, and the California Department of Justice investigated this matter.

    Assistant United States Attorneys Kristen A. Williams of the Major Frauds Section and Aylin Kuzucan of the General Crimes Section are prosecuting this case.

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  • MIL-OSI Security: Rancho Cucamonga Man Sentenced to More Than Three Years in Prison for Operating ‘Birth Tourism’ Scheme for Affluent Chinese Clients

    Source: US FBI

    LOS ANGELES – A San Bernardino County man was sentenced today to 41 months in federal prison for operating a “birth tourism” scheme that charged Chinese clients tens of thousands of dollars to help them give birth in the United States to obtain birthright U.S. citizenship for their children.

    Michael Wei Yueh Liu (刘维岳), 59, of Rancho Cucamonga, was sentenced by United States District Judge R. Gary Klausner.

    At the conclusion of a four-day trial, a jury on September 13 found Liu and Jing Dong, (董晶), 47, of Rancho Cucamonga, guilty of one count of conspiracy and 10 counts of international money laundering. Dong is expected to be sentenced in the coming weeks.

    From at least January 2012 to March 2015, Liu and Dong ran a maternity house in Rancho Cucamonga. Liu and Dong rented apartments in Southern California to provide short-term housing and provided other services to pregnant women from China who traveled to the United States to give birth so their children would acquire U.S. citizenship. Typically, within one or two months after giving birth, the women returned to China.

    Among the services Liu and Dong provided were assistance on how to obtain visas to enter the United States, customs entry guidance, housing, and transportation in the United States, as well as assistance applying for U.S. legal documents for the children of their customers.

    Liu and Dong advised their customers on how to hide their pregnancies from the immigration authorities. Liu and Dong also knew – or deliberately avoided learning – that their customers lied on their visa applications submitted to immigration authorities to enter the U.S.

    Generally, their customers’ visa applications falsely stated that the purpose of the trip to the United States was for tourism, when it was to give birth, and the length of the stay was days or weeks, when it was in fact months. The visas also misstated the location where the customers intended to stay, which was defendants’ maternity hotel.

    Liu and Dong or their agents also advised their customers to fly to ports of entry with perceived less customs scrutiny, such as Hawaii, before flying to Los Angeles, to wear loose fitting clothing, to favor certain lines at customs that they perceived to be less strict, and on how to answer the customs officials’ questions.

    Liu and Dong received money from overseas and used that money to promote their scheme.

    Homeland Security Investigations, IRS Criminal Investigation, and the FBI investigated this matter. The Irvine Police Department and the San Bernardino County Sheriff’s Department provided substantial assistance.

    Assistant United States Attorneys Gregory W. Staples and Kevin Y. Fu of the Orange County Office prosecuted this case.

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  • MIL-OSI Security: Southern California Political Operative Arrested on Federal Complaint Alleging He Acted as Illegal Agent of People’s Republic of China

    Source: US FBI

    LOS ANGELES – FBI agents this morning arrested a Chino Hills man on federal charges that allege he acted as an illegal agent of the People’s Republic of China (PRC), including while serving as the campaign manager for a political candidate who was elected in 2022 to the city council of a Southern California city.

    Yaoning “Mike” Sun, 64, was arrested without incident and is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.

    A criminal complaint filed Tuesday and unsealed this morning charges Sun with acting as an illegal agent of a foreign power. Sun is also charged with conspiring with another man, Chen Jun, who was sentenced to federal prison last month for acting as an illegal agent of the PRC government and plotting to target U.S.-based practitioners of Falun Gong, a spiritual practice banned in China.

    According to the complaint, Sun served as the campaign manager and close personal confidante for a Southern California politician (described in the affidavit as “Individual 1”) who was running for local elected office in 2022. During the campaign, Sun allegedly communicated with Chen regarding his efforts to get Individual 1 elected. Chen discussed with Chinese government officials how the PRC could “influence” local politicians in the United States, particularly on the issue of Taiwan, according to the complaint. In November 2022, shortly after Individual 1 was elected to office, Chen instructed Sun to prepare a report on the election that was sent to Chinese government officials, who responded positively and expressed thanks, according to the complaint affidavit. Chen also sent a message to Individual 1 stating that Individual 1 was “doing a good job, I hope you can continue the good work, make Chinese people proud,” the affidavit states.

    “The conduct alleged in this complaint is deeply concerning – the defendant is charged with acting on behalf of the People’s Republic of China to influence our political system,” said United States Attorney Martin Estrada. “We cannot permit hostile foreign powers to meddle in the governance of our country. My office and our law enforcement partners will continue to prioritize the security of our nation and the preservation of the liberties that make this country the envy of the world.”

    “This case highlights the breadth of the PRC’s relentless intelligence and malign influence activities targeting the United States,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI will continue to use all the tools at its disposal to identify PRC intelligence operations, disrupt PRC information laundering networks, and bring to justice those who seek to engage in criminal conspiracies to undermine the integrity of our elected officials.”

    About a month after Individual 1’s election, Chen arranged a lunch at a Rowland Heights restaurant with Sun and others, a gathering that Chen described to a PRC official as a “core member lunch,” the affidavit alleges. Chen subsequently described the lunch as “successful” as participants agreed to establish a “US-China Friendship Promotional Association.” While Individual 1 did not attend the meeting, Chen described Individual 1 as being part of the association and Sun serving as vice president. “This is the basic team dedicated for us,” Chen wrote to the Chinese government official.

    Chen instructed Sun in early 2023 to write up another report for Chinese officials describing “you and me cultivating and assisting [Individual 1’s] success,” according to the affidavit. In a February 2023 draft of Sun’s report, Sun described his personal background, his history of working against “Chinese secessionist forces,” and boasted that, “most proudly of all, during the 2022 U.S. midterm elections, I orchestrated and organized my team to win the election for city council member candidate [Individual 1].” In subsequent communications outlined in the affidavit, Chen instructed Sun to include a section on Individual 1, who was to be described as a “New Political Star” with connections to other prominent politicians. The affidavit also states that Chen and Sun discussed their “past struggle fighting Taiwanese independence forces . . . over the years and fighting ‘FLG’ [Falun Gong] influences” in a California city.

    In February 2023, Sun and Chen drafted a second report to PRC officials that requested an $80,000 budget to fund additional pro-PRC activities and to combat “anti-China forces” in the United States.   

    After Chen and Sun discussed a planned trip to the PRC to meet with “leadership,” and after Chen directed Sun to schedule a meeting with the Chinese consul general in Los Angeles, Sun and Individual 1 traveled to China in late August 2023.

    A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    The charge of acting as an illegal agent of a foreign government carries a statutory maximum sentence of 10 years in federal prison. The charge of conspiracy to commit an offense against the United States carries a maximum statutory sentence of five years.

    This FBI is conducting the ongoing investigation in this matter.

    Assistant United States Attorney David Ryan, Chief of the National Security Division, and Assistant United States Attorney Amanda Elbogen of the Terrorism and Export Crimes Section are prosecuting this case, with assistance from Trial Attorney Garrett Coyle of the Counterintelligence and Export Control Section in the Department of Justice’s National Security Division.

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  • MIL-OSI Security: Bitwise Founders Sentenced to 11 Years and Nine Years in Prison for $115 Million Fraud

    Source: US FBI

    FRESNO, Calif. —Jake Soberal, 38, and Irma Olguin, Jr., 44, the founders and leaders of the failed Fresno-based start-up company, Bitwise Industries (“Bitwise”), were sentenced to 11 years and 9 years in prison, respectively, for defrauding people out of approximately $115,000,000, United States Attorney Phillip A. Talbert announced today.

    “Defendants likened themselves to gods and joked about deceiving their well-intentioned investors while committing a massive fraud,” said U.S. Attorney Talbert.  “They lied repeatedly to pull in over $100 million to a dying business venture that they knew never had any meaningful revenue.  To make themselves rich and keep up the façade, they used fabricated bank statements, false financial information, forged documents, and fake loan collateral.  These sentences serve as a reminder of the hazards of such financial crimes, and my office will continue to work with the FBI, IRS Criminal Investigation, and our law enforcement partners to vigorously investigate and prosecute those who commit them.”

    “The willful and egregious fraud carried out by Irma Olguin Jr. and Jake Soberal will have long lasting impacts on not only those who invested in the well-orchestrated scam of Bitwise, but also the nearly 1,000 employees and contractors who abruptly lost their jobs when the Bitwise swindlers ran out of money,” said IRS Criminal Investigation (IRS-CI) Oakland Field Office Assistant Special Agent in Charge Kulbir Mand. “White-collar crimes are damaging to victims, families, and communities alike. IRS-CI and its law enforcement partners are experts at investigating financial crimes and building cases that lead to justice. Today’s sentencing should serve notice that the consequence for committing white-collar crime is severe.”

    “This case demonstrates how disastrous the impact can be when a company’s executives fail to conduct themselves ethically and lawfully.  Bitwise Industries co-CEOs Jake Soberal and Irma Olguin, Jr. repeatedly lied to investors and lenders to keep their massive Ponzi scheme afloat, despite knowing that the business model would never generate positive revenue. The $115 million loss is significant, but the damage to the professional reputations of innocent parties and the loss of more than 900 jobs and associated benefits employees depended on will have a lasting, negative impact on the economy and individual lives,” said FBI Sacramento Special Agent in Charge Sid Patel. “The FBI remains steadfast, safeguarding our economy by working with all partner agencies to ensure that those who exploit positions of trust to commit large-scale corporate frauds are held accountable for their criminal activity.”

    According to court records, Bitwise was, and still is, the biggest startup company to come from California’s Central Valley.  The company’s objective was to use technology to create jobs for underserved groups of people, revitalize blighted urban areas, and show that such a project could be profitable.

    Olguin, Jr. and Soberal received national media attention by appearing in publications like Forbes Magazine and giving Ted Talks where they portrayed Bitwise as being a success.  They also made a substantial annual salary.  By early 2022, however, the company was not generating any revenue and was running low on funds.  Thereafter, Olguin, Jr. and Soberal fabricated financial information for its board and for investor materials and doctored audit reports to make it appear as though Bitwise was generating revenues and turning a profit.  They also altered bank statements and forged bank representatives’ signatures on bank correspondence to inflate the company’s cash balances.  They did so to convince people that Bitwise was excelling when the company was actually failing.

    The following are illustrative examples of Olguin, Jr. and Soberal’s fraud:

    • In a February 2022 presentation and July 2022 prospectus that were circulated to investors, Olguin, Jr. and Soberal represented that Bitwise’s cash balance was over $44,000,000 as of the end of 2021.  They also represented that the company’s revenue was more than $58,000,000.  In reality, the company’s cash balance was less than $12,000,000 at that time and its revenue was non-existent. 
    • In June and July 2022, Olguin, Jr. and Soberal falsely represented to a California-based investment firm that Bitwise had secured a $150,000,000 investment from another, London-based investment firm.  This was done to convince the California-based investment firm to purchase several buildings that Bitwise owned.  Several months later, Soberal falsely represented to another lender that Bitwise still owned those buildings to to provide collateral for another loan from another lender of millions of dollars. 
    • In a March 2023 presentation circulated to investors, Olguin, Jr. and Soberal represented that Bitwise’s cash balance was over $77,000,000 as of the end of 2022.  They also represented that the company’s revenue was more than $143,000,000.  In reality, the company’s cash balance was less than $5,000,000 at that time and its revenue nominal. 
    • Also in March 2023, Olguin, Jr. and Soberal provided an investor with an altered version of an audit of Bitwise that was previously conducted by an international audit firm.  They altered the audit to make it appear as though Bitwise’s revenue was 300 percent higher than the true number. 
    • Also in March 2023, Soberal represented to a long-time Bitwise employee that the company had sufficient resources on-hand to induce the employee to make a significant loan to the company.

    This pattern continued until the end of May 2023 when Bitwise ran out of money and the company collapsed.

    Olguin, Jr. was a computer engineer who had previously run another technology company, and Soberal was an attorney who had previously practiced at a law firm doing intellectual property work.  Moreover, the defendants hired unqualified family members and friends, which allowed them to compartmentalize information and work in secret to spin the false statements needed to conceal and continue with their fraud.  For these reasons, Olguin, Jr. and Soberal received special sentencing enhancements. 

    This case is the product of an investigation by the FBI and IRS Criminal Investigation.  Assistant United States Attorneys Joseph Barton and Henry Z. Carbajal III prosecuted the case.

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  • MIL-OSI Security: Placer County Man Pleads Guilty to Child Exploitation Charges

    Source: US FBI

    SACRAMENTO, Calif. — Randy Anger, 57, of Carnelian Bay, pleaded guilty today to distribution and receipt of child pornography, United States Attorney Phillip A. Talbert announced. 

    According to court documents, in May 2021, Anger distributed and received child sexual abuse material on the Kik Messenger app while communicating with Brent Hooton.  Hooton was separately charged and convicted in the Eastern District of California with production and distribution of child pornography and was sentenced to 27 years in prison.  In November 2021, Anger also received several images of child sexual abuse material on the Wickr app.

    This case was the product of an investigation by the Federal Bureau of Investigation, with assistance by Homeland Security Investigations and the Placer County Sheriff’s Office. Assistant United States Attorney Denise N. Yasinow is prosecuting the case.

    Anger is scheduled to be sentenced on March 31, 2025, by U.S. District Judge Dale A. Drozd.  On both the distribution and receipt counts, he faces a mandatory minimum sentence of 5 years in prison and a maximum statutory penalty of 20 years in prison per 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.

    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.

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  • MIL-OSI Security: Two Aryan Brotherhood Prison Gang Members Sentenced to Two Consecutive Life Terms in Prison for RICO Conspiracy and Murder in Aid of Racketeering

    Source: US FBI

    SACRAMENTO, Calif. — Ronald Yandell, 62, of Pinole, and William Sylvester, 56, of Norco, were each sentenced today by U.S. District Judge Kimberly J. Mueller to two consecutive life terms in prison for murder in aid of racketeering and various other RICO-related crimes, United States Attorney Phillip A. Talbert announced.

    According to court documents, between 2011 and 2016, Aryan Brotherhood members and associates engaged in racketeering activity, committing multiple acts involving murder, conspiracies to murder, and drug trafficking crimes. The trial evidence showed that Aryan Brotherhood members oversaw a significant heroin and methamphetamine trafficking operation from their California prison cells using smuggled cellphones to direct drug trafficking activities, order murders, and oversee other criminal activities inside and outside of the prisons.

    Yandell’s murder in aid of racketeering

    According to evidence presented at trial, on August 15, 2015, two inmates carried out a brutal murder of another inmate at CSP-Sacramento on Yandell’s order.  Before the murder, Yandell offered the two inmates membership in the Aryan Brotherhood if they were able to execute the killing.  About a year after the murder, DEA intercepted calls made by Yandell over a contraband cellphone in which he bragged about directing the murder and sponsoring the killers for membership in the gang.  Yandell also directed that money earned from Aryan Brotherhood criminal activities be directed to support the two murderers.

    Sylvester’s murder in aid of racketeering

    According to evidence presented at trial, on October 7, 2001, Sylvester murdered another inmate at CSP-Sacramento to earn his membership in the Aryan Brotherhood.  In particular, Sylvester murdered the other inmate because the victim was a member of a gang that refused to recognize the Aryan Brotherhood’s authority and, as a result, members of the victim’s gang were marked for death. 

    To carry out the murder, Sylvester and another inmate used substantial planning and premeditation to carry out the attack within an extremely-restrictive prison environment. They used inmate-manufactured weapons and surprised the victim with multiple lethal stab wounds to the victim’s body. Sylvester earned membership in the gang for carrying out the killing.

    In April 2024, following a nine-week trial before, a federal jury found Yandell, Sylvester, and co-defendant Danny Troxell, 71, guilty of RICO conspiracy, conspiracy to murder, murder in aid of racketeering, and multiple counts of drug trafficking.  Troxell will be sentenced on February 18, 2025.

    Charges remain pending against one defendant, Kevin MacNamara, 44, of La Palma.

    The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

    This case is the product of an investigation by the Drug Enforcement Administration with assistance from the California Department of Corrections and Rehabilitation, the Vallejo Police Department, the U.S. Marshals Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the El Dorado County District Attorney’s Office, and the Nevada County Sheriff’s Office. Assistant U.S. Attorneys Jason Hitt, Ross Pearson, and David Spencer are prosecuting the case.

    The case was investigated under the Organized Crime Drug Enforcement Task Forces (OCDETF). OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. For more information about Organized Crime Drug Enforcement Task Forces, please visit Justice.gov/OCDETF.

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  • MIL-OSI Security: U.S. Attorney’s Office Recognizes the Contributions of State, Local, and Federal Law Enforcement Partners to the Mission of the U.S. Department of Justice

    Source: US FBI

    SACRAMENTO, Calif. — U.S. Attorney Phillip A. Talbert is pleased to announce the recipients of the 2023 Eastern District of California Law Enforcement Awards. These awards are presented annually to law enforcement agencies and investigators in the District’s Sacramento and Fresno divisions to recognize outstanding collaboration between federal, state, and local law enforcement in addressing public safety issues in this region.

    “Congratulations to all of our award recipients on being chosen and for their efforts to address dangerous crimes that threaten the residents of the Eastern District of California,” said U.S. Attorney Talbert. “We owe a debt of gratitude to these agencies, detectives, and agents who conduct extensive investigations to seek justice for victims and for the public. It is a privilege for our office to work alongside them to keep our communities safe.”

    Outstanding Law Enforcement Agency Awards

    The Outstanding Law Enforcement Agency Award is presented to a local or state law enforcement agency that has demonstrated outstanding professionalism, commitment to public safety partnerships, and strong support for the U.S. Attorney’s Office’s initiatives.

    The Fresno Multi-Agency Gang Enforcement Consortium (MAGEC) is the 2023 recipient of the Eastern District of California Law Enforcement Award for Outstanding Law Enforcement Agency in the Fresno Division. MAGEC received the award for two investigations. The first led to the arrest and charging of more than 25 Norteño gang members in Parlier and surrounding communities for murder, drug trafficking, gun trafficking, and witness and victim intimidation. The second led to the charging of 10 members of the MS-13 gang for six different murders committed in and around the Mendota area. MAGEC is composed of personnel from the Clovis Police Department, the Fresno Police Department, the Kerman Police Department, the Kingsburg Police Department. the Parlier Police Department, the Sanger Police Department, the Selma Police Department. the Fresno County Sheriff’s Office, the California Highway Patrol, and the Fresno County District Attorney’s Office, working in partnership with the California Department of Corrections and Rehabilitation, the Fresno County Probation, the California Department of Justice’s Special Operations Unit, Homeland Security Investigations, DEA, ATF, and FBI. MAGEC demonstrates our shared commitment to keeping our communities safe from violent criminal gangs through teamwork among federal, state, and local law enforcement partners.

    The Sacramento Hi-Tech Crimes / Internet Crimes Against Children (ICAC) Task Force is the 2023 recipient of Eastern District of California Law Enforcement Award for Outstanding Law Enforcement Agency in the Sacramento Division. The ICAC Task Force received the award for investigations that led to the successful charging and prosecution of some of the Sacramento region’s most serious sexual offenders in 2023, including multiple defendants who produced child pornography and sexually abused minors. Those defendants included a physician, a nurse practitioner, and an adoptive and foster father who sought to sexually exploit young children. The ICAC Task Force is composed of personnel from the El Dorado County District Attorney’s Office, the Placer County Sheriff’s Office, the Sacramento County Sheriff’s Office, the San Joaquin County Sheriff’s Office, the Citrus Heights Police Department, the Elk Grove Police Department, the Folsom Police Department, the Rocklin Police Department, the Tracy Police Department, the Sacramento Police Department, the California Department of Justice, the California Highway Patrol, and the California Department of Corrections and Rehabilitation, as well as from Homeland Security Investigations and the FBI. The ICAC Task Force exemplifies commitment to protect the most vulnerable in our community by thoroughly investigating internet-facilitated crimes against children.

    Outstanding Individual Awards

    The Outstanding Investigator and Outstanding Federal Agent awards are presented to local, state, and federal law enforcement officers who have demonstrated outstanding professionalism; timely, thorough, quality investigations; exceptional knowledge and investigative skill; energy and commitment to public safety; and commitment to law enforcement partnerships and teamwork.

    The Outstanding Investigator award for the Sacramento Division was given to Yuba County Sheriff’s Office Peace Officer Sixto Torres for his work as a DEA Task Force Officer on Operation Splazh Down, an investigation into a large-scale, poly-drug distribution organization in the Sacramento Area. During Operation Splazh Down, TFO Torres identified the leadership structure of a drug trafficking organization. As a result of his efforts and that of his team, DEA seized more than 500 pounds of methamphetamine and large amounts of cocaine, fentanyl, heroine, and firearms. Torres dedicates exceptional energy to his investigations and consistently exemplifies professionalism and service before self.

    The Outstanding Investigator award for the Fresno Division was given to Fresno County Sheriff’s Office Sergeant Scott Schwamb for his work with the Internet Crimes Against Children Task Force. One case where Schwamb was the lead investigator culminated in a 21‑year prison sentence for the defendant. That case began when Schwamb received information that hidden cameras were recording a minor in her bedroom and bathroom. Despite having already worked a full shift, Schwamb reviewed the evidence and assembled an investigative team that evening and applied for a search warrant. By early the next morning, evidence had been collected at the suspect’s home and work and the suspect had been interviewed. Schwamb continued to work on the case by preparing for trial and was the prosecution’s key law enforcement witness at trial. While working on the Task Force, Schwamb has assisted in the investigation of hundreds of leads involving child sexual exploitation, and as a result, dozens of cases have been prosecuted by the U.S. Attorney’s Office and the Fresno County District Attorney’s Office.

    The Outstanding Federal Agent award for the Sacramento Division was given to FBI Special Agent Jessi Groff for her work as a member of FBI’s international terrorism squad. She has led the investigations into some of the most important cases in the District, using her unique ability to master details of a case while never losing sight of the big picture. Her work is often unheralded and tedious, yet Special Agent Groff maintains a positive demeanor and attitude. Throughout her years of service, she has become a bedrock of federal law enforcement.

    The Outstanding Federal Agent award for the Fresno Division was given to Homeland Security Investigations Special Agent Jackie Lovato for his work on the Fentanyl Overdose Resolution Team (FORT). Agent Lovato has spearheaded the investigation into dozens of fentanyl traffickers in the Central Valley, including some who caused overdose injuries and deaths. One of his cases led to charges against 20 fentanyl and cocaine traffickers, including the self‑proclaimed counterfeit M-30 fentanyl “King of Fresno.” Special Agent Lovato has also offered support to overdose victims and their families and played a key role in educating the public about the dangers of fentanyl in schools, hospitals, law enforcement agencies, and other organizations.

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  • MIL-OSI Security: Mexican National Sentenced to 12 Years in Prison for Methamphetamine Trafficking

    Source: US FBI

    SACRAMENTO, Calif. — Orlando Torres Angulo, 30, of Mexico, was sentenced by U.S. District Judge Kimberly J. Mueller to 12 years in prison for conspiracy to distribute methamphetamine, two counts of distributing methamphetamine, and use of a cellphone in aid of racketeering, Acting U.S. Attorney Michele Beckwith announced.

    According to court documents, in February 2021, Torres Angulo conspired with other individuals in both Mexico and California to distribute methamphetamine in pound quantities. Torres Angulo arranged for the delivery of 4 pounds of methamphetamine to a customer, who was in fact an undercover officer in Fresno. Torres Angulo later delivered another 2 pounds of methamphetamine to the undercover officer in Roseville. While discussing this deal, Torres Angulo told the undercover officer that he would set aside 15 pounds of methamphetamine if the undercover officer came to his place in Tulare. Torres Angulo then helped coordinate a third deal for 10 pounds of methamphetamine in Terra Bella.

    This case was the product of an investigation by the Federal Bureau of Investigation with assistance from the Drug Enforcement Administration, Homeland Security Investigations, and the Tri-County Drug Enforcement Team (TRIDENT). Assistant U.S. Attorney David W. Spencer prosecuted the case.

    This prosecution is part of the Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. The Sacramento Strike Force is a co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. The specific mission of the Sacramento Strike Force is to identify, investigate, disrupt, and dismantle the most significant drug trafficking organizations (DTOs) and transnational criminal organizations (TCOs) shipping narcotics, firearms, and money through the Eastern District of California, thereby reducing the flow of these criminal resources in California and the rest of the United States. The Sacramento Strike Force leads intelligence-driven investigations targeting the leadership and support elements of these DTOs and TCOs operating within the Eastern District of California, regardless of their geographic base of operations.

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  • MIL-OSI Security: Final Defendant Sentenced to More Than 12 Years in Prison for Role in Conspiracy to Distribute Over 1,000 Pounds of Methamphetamine

    Source: US FBI

    RENO – The final defendant involved in a large methamphetamine trafficking conspiracy was sentenced Monday by United States Chief District Judge Miranda M. Du to 145 months in prison for his role in a large methamphetamine trafficking conspiracy.

    According to court documents, in 2014, Nassrollah Behmard fled to Mexico to avoid being arrested for his involvement in a Washoe County drug trafficking case. In March 2022, the FBI learned that Behmard, who was still in Mexico, was conspiring with co-conspirators located in Reno and Los Angeles to distribute multi-pound quantities of methamphetamine in the Reno area. From March 2022 to June 2022, Behmard and his co-conspirators were responsible for distributing over 140 pounds of methamphetamine.

    On June 6, 2022, Behmard arranged with co-conspirator Ramon Guadalupe Sanchez Maldonado to deliver 100 pounds of methamphetamine from Los Angeles to Reno. Law enforcement intercepted the methamphetamine and traced it back to a clandestine lab located in the Los Angeles area. Law enforcement dismantled the lab and seized approximately 1,000 pounds of methamphetamine.

    In June 2022, a federal grand jury in Reno charged Behmard, also known as “Benny” and “Michael Holt,” and his co-conspirators Sanchez Maldonado, Melissa Ann Longo, Owen Eugene Dick, and Jesus Sanchez Vargas with conspiracy to distribute methamphetamine and related offenses including money laundering. Maldonado was sentenced to 120 months in prison, Longo was sentenced to 57 months in prison, and Dick was sentenced to 57 months in prison.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    The FBI Northern Nevada Safe Streets Task Force, comprised of the FBI, Reno Police Department, Carson City Sheriff’s Office, Nevada Gaming and Control Board, Nevada Department of Corrections, and the Douglas County Sheriff’s Office investigated the case with assistance by the FBI Los Angeles Field Office, the San Bernardino Police Department, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Andolyn Johnson prosecuted the case.

    This case was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.

    If you have information of potential drug trafficking, call the FBI at 1-800-CALL-FBI (1-800-225-5324) or submit an anonymous tip online at TIPS.FBI.GOV.

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  • MIL-OSI Security: Las Vegas Resident Sentenced to Prison for COVID-19 Fraud Scheme

    Source: US FBI

    LAS VEGAS – A Las Vegas woman was sentenced Wednesday by United States District Judge James C. Mahan to 30 months in prison to be followed by three years of supervised release for fraudulently seeking over $1 million in COVID-19 Paycheck Protection Program (PPP) loans.

    According to court documents, from April 2020 to July 2020, Karen Chapon, aka Karen Hannafious, made multiple false statements about her companies’ respective business operations and payroll expenses, and submitted false documents to support six fraudulent PPP loan applications, including false federal tax filings. As part of the fraudulent loan applications, Chapon falsely stated that she had not been convicted of a felony in the past five years, but in fact, she pleaded guilty to felony fraud offenses in 2016. She received four loans totaling approximately $596,931. Chapon used fraudulently obtained funds for her own benefit, including the purchase of a Mercedes Benz SUV.

    In August 2023, Chapon pleaded guilty to one count of bank fraud. In addition to the prison term, Chapon was ordered to pay $589,484.13 in restitution.

    The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

    The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

    United States Attorney Jason M. Frierson for the District of Nevada; Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Special Agent in Charge Spencer L. Evans for the FBI; Acting Inspector General Heather M. Hill for the Treasury Inspector General for Tax Administration (TIGTA); and Special Agent in Charge Weston King for the U.S. Small Business Administration Office of Inspector General (SBA-OIG), Western Region made the announcement.

    This case was investigated by the FBI, TIGTA, and SBA OIG. Assistant United States Attorney Jessica Oliva and Trial Attorneys Lucy Jennings and Jennifer Bilinkas of the Criminal Division’s Fraud Section prosecuted the case.

    In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.

    Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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