LOS ANGELES – Fourteen defendants – including San Fernando Valley and Glendale residents – were arrested on two federal criminal complaints alleging they fraudulently obtained more than $25 million in taxpayer-funded COVID-19 relief funds and federally-guaranteed small business loans.The 18 total defendants named in the complaints – four defendants are believed to be in Armenia – are charged with conspiracy to defraud the government with respect to claims; false, fictitious, or fraudulent claims; wire fraud and attempted wire fraud; bank fraud and attempted bank fraud; money laundering conspiracy; laundering of monetary instruments; engaging in monetary transactions in property derived from specified unlawful activity; and/or structuring financial transactions to evade reporting requirements.The defendants arrested today include:Vahe Margaryan, a.k.a. “William McGrayan,” 42, of Tujunga, who allegedly orchestrated a scheme to defraud numerous banks and the Small Business Administration’s (SBA) Preferred Lender Program, a program designed to help small businesses that otherwise might not obtain financing. McGrayan allegedly directed owners of sham corporations to open bank accounts, make false statements, and concoct documents, including phony resumes and financial statements, to support loan applications to buy other sham corporations. McGrayan allegedly paid for phony tax returns that falsely reported millions in revenue and tens of thousands in tax due and owing. McGrayan, whose alleged criminal activity lasted from 2018 until January 2025, then directed the laundering of millions in fraud proceeds through various bank accounts.Sarkis Gareginovich Sarkisyan, 37, a.k.a. “Samuel Shaw,” of Glendale, who allegedly, among other offenses, submitted a false application and bogus documents to obtain a loan under the Paycheck Protection Program (PPP), which provided low-interest, forgivable loans to help small businesses retain their workforce and cover expenses. Sarkisyan allegedly applied in April 2021 on behalf of a fake business that received more than $700,000 in PPP funds.Mery Babayan, 32, a.k.a. “Mery Diamondz,” of Van Nuys, together with co-defendants Margaryan and Hovannes Hovannisyan, 48, a.k.a. “John Harvard,” of Panorama City, in May 2021 allegedly defrauded a bank by representing the nonexistent sale of a sham business to another sham company to obtain an approximately $3 million federally guaranteed loan through the SBA’s Preferred Lending Program.Felix Parker, 77, of North Hollywood, who in January 2023 allegedly made false statements and submitted fraudulent documents, including fake tax returns that falsely reported that his shell company, Canmar Promo, earned millions of dollars annually and owed tens of thousands in federal income taxes. Parker allegedly obtained more than $2 million in government-guaranteed funds earmarked to help small businesses.Axsel Markaryan, 47, a.k.a. “Axel Mark,” of Pacoima, who in June 2023 allegedly fraudulently obtained more than $5 million in SBA loans via the submission of false statements and the submission of fake documents, including bogus tax returns. After the loans were obtained, Markaryan and his co-schemers in November 2023 laundered the money, including sending at least $100,000 to a co-schemer in Armenia.As a result of today’s takedown, law enforcement seized approximately $20,000 in cash, two money-counting machines, paper cash bands or currency straps in denominations of $2,000 and $10,000, multiple cell phones, multiple laptops, two loaded semi-automatic 9mm handguns, and boxes of 9mm ammunition.“Today’s enforcement action is intended to send a message to all criminals who take advantage of government programs designed to help those who need them most,” said United States Attorney Bill Essayli. “If you took COVID-19 or SBA money you weren’t entitled to, your door could be the next one we visit. Together with our law enforcement partners, my office will aggressively prosecute individuals who cheat the system meant to protect and support law-abiding citizens.”“Scheming to fraudulently obtain federal funds that were meant to provide assistance to the nation’s small businesses is unacceptable,” said the U.S. Small Business Administration Office of Inspector General (SBA-OIG) Western Region Acting Special Agent in Charge Jonathan Huang. “OIG will continue to ardently investigate fraudulently obtained SBA program funds, including COVID-19 pandemic-related loans, to protect taxpayers from fraud, waste, and abuse. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”“This transnational criminal network sought to defraud the government of millions of dollars and almost succeeded,” said Homeland Security Investigations (HSI) Los Angeles Acting Special Agent in Charge John Pasciucco. “Through the diligent work of the El Camino Real Financial Crimes Task Force and our federal partners, HSI is continuing to identify these criminal groups looking to profit from the pandemic and will use all available resources to criminally prosecute or remove them from the country.”“Today, 14 individuals were arrested in connection with a fraudulent loan scheme in which they allegedly obtained in excess of $25 million through the SBA Paycheck Protection Program, Economic Injury Disaster Loan programs, and other federal funding programs,” said IRS Criminal Investigation Special Agent in Charge Tyler Hatcher, Los Angeles Field Office. “These programs were established to assist individuals and businesses in need of financial assistance and instead were pilfered by the named defendants. IRS-CI is dedicated to identifying and dismantling criminal organizations that prey on assistance programs set up for the benefit of our law-abiding citizens.”A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.If convicted, each defendant would face a statutory maximum sentence of decades in federal prison.On May 17, 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 bolster 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, among other methods, 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 https://www.justice.gov/coronavirus. On September 15, 2022, the Attorney General selected the U.S. Attorney’s Offices for the Central and Eastern Districts of California to jointly head one of the three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. The Strike Force combines law enforcement and prosecutorial resources and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors, as well as those who committed instances of pandemic relief fraud. The Strike Force uses prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds. Additional information regarding the Strike Force may be found at https://www.justice.gov/opa/pr/justice-department-announces-covid-19-fraud-strike-force-teams. 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 (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. SBA-OIG, IRS Criminal Investigation, and HSI are investigating these matters.The cases announced today were investigated by the U.S. Department of Homeland Security’s Office of Inspector General and Homeland Security Investigations’ (HSI) El Camino Real Financial Crimes Task Force, a multi-agency task force that includes federal and state investigators who are focused on financial crimes in Southern California. Assistant United States Attorneys Mark Aveis and Gregg Marmaro of the Major Frauds Section and Maxwell Coll of the Cyber and Intellectual Property Crimes Section are prosecuting these cases.

LOS ANGELES – A Grammy Award-winning Chicago rapper has been charged in a superseding federal grand jury indictment alleging he conspired with others to murder a rival rapper, resulting in the shooting death of the rival’s relative that occurred at a gas station near the Beverly Center shopping mall in Los Angeles in August 2022, the Justice Department announced today.Durk Banks, 32, a.k.a. “Lil Durk,” “Blood,” and “Mustafa Abdul Malak,” of Chicago, is charged with one count of conspiracy, one count of use of interstate facilities to commit murder-for-hire resulting in death, and one count of using, carrying, and discharging firearms and a machine gun and possession of such firearms in furtherance of a crime of violence resulting in death.The indictment adds two felony charges against Banks, who previously was charged via criminal complaint in this case.The four-count superseding indictment, returned late Thursday, adds Banks as the lead defendant to a previous indictment returned October 17 and charging the following defendants in connection with the August 2022 murder:Kavon London Grant, 28, a.k.a. “Cuz” and “Vonnie,” of Atlanta;Deandre Dontrell Wilson, 33, a.k.a. “DeDe,” of Chicago;Keith Jones, 33, a.k.a. “Flacka,” of Gary, Indiana;David Brian Lindsey, 33, a.k.a. “Browneyez,” of Addison, Illinois; andAsa Houston, 36, a.k.a. “Boogie,” of Chicago.Banks was arrested on October 17 near Miami International Airport after law enforcement learned that Banks had been booked on multiple international flights.  A federal magistrate judge in Miami has ordered him jailed without bond until he is transferred to Los Angeles for arraignment.All six defendants – none of whom has yet entered a plea to the charges – are expected to be arraigned in United States District Court in downtown Los Angeles in the coming weeks.According to the superseding indictment, in 2010, Banks formed an organization called Only the Family (OTF), which, among other things, produced and sold hip hop music from artists primarily from the Chicago area. OTF also acted as an association-in-fact of individuals who engaged in violence, including murder and assault, at Banks’ direction and to maintain their status in OTF.   Banks feuded with a victim, identified in court documents as “T.B.” The feud stemmed from a November 6, 2020, murder in which an associate of T.B. shot and killed an OTF rapper named Dayvon Bennett, a.k.a. “King Von.” Bennett and Banks were close friends.In response to Bennett’s murder, Banks allegedly put a bounty on T.B.’s life.On August 19, 2022, several OTF members and associates used two vehicles and worked in tandem to track, stalk, and attempt to murder T.B. for hours, culminating in a shooting at a gasoline station located near the Beverly Center shopping mall. The co-conspirators used multiple guns, including a machine gun, and fired at least 18 rounds at T.B.’s vehicle, striking and killing a victim identified in court documents as “S.R.,” who was T.B.’s family member who had been traveling with T.B.Banks allegedly ordered T.B.’s murder and the hitmen used money from Banks and OTF-related finances to carry out the hit. Bank and flight records show that an OTF member and close associate of Banks coordinated and paid for five co-conspirators to travel from Chicago to California on the day before the murder. Around the time the one-way flights were purchased, Banks told the OTF associate booking the flights, “Don’t book no flights under no names involved wit [sic] me.”The same day the hitmen traveled from Chicago to California, Banks also traveled to California in a private jet with another conspirator, Kavon London Grant, 28, a.k.a. “Cuz” and “Vonnie.” Later that day, Grant allegedly purchased ski masks for the shooters to use to commit the murder and paid – using a credit card in Banks’ name – for the other co-conspirators’ hotel room.“Mr. Banks is charged with orchestrating a cold-blooded murder that resulted in the death of a rival’s family member,” said United States Attorney Martin Estrada. “Not only that, the shooting occurred in the open, at a gas station at a busy intersection, endangering many others in the area. Violent gun crime of this sort is devastating to our community and we will have zero-tolerance for those who perpetrate such callous acts of violence.”“The apprehension of Mr. Banks as he attempted to leave the United States is once again proof that the FBI and our extraordinary partners at the Los Angeles Police Department have a long reach,” said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. “No excuse can justify this violent act and let me be clear: While you’re going about your life, thinking you ‘got away with it,’ the FBI is piecing together the facts that will serve as your undoing.”“Cases like these that span multiple states and jurisdictions are complicated and can oftentimes only be resolved through the collaboration of multiple departments,” said Los Angeles Police Chief Dominic Choi. “This arrest is the culmination of the combined efforts of our partners in the U.S. Attorney’s Office, the FBI, and LAPD’s Operation West Bureau Homicide detectives who discovered that Durk D a.k.a. Lil Durk was involved in this heinous murder. The hundreds of hours spent on the investigation included surveillance, authoring numerous search warrants, using forensic technology, and tireless investigative travel and collaboration alongside our federal partners led to this arrest. I am appreciative of the dedication of those involved.”The other five defendants are in federal custody in Illinois after their initial court appearances in Chicago. They remain charged with one count of conspiracy, one count of use of interstate facilities to commit murder-for-hire resulting in death, and one count of using, carrying and discharging firearms and a machine gun and possession of such firearms in furtherance of a crime of violence resulting in death. Jones faces an additional count of possession of a machine gun.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.If convicted, all the defendants would face a statutory maximum sentence of life in federal prison.The FBI and the Los Angeles Police Department are investigating this matter.Assistant United States Attorneys Ian V. Yanniello of the Terrorism and Export Crimes Section, Daniel H. Weiner of the International Narcotics, Money Laundering, and Racketeering Section, and Gregory W. Staples of the Orange County Office are prosecuting this case.

          WASHINGTON – A Los Angeles businessman was sentenced to 24 months in prison today for hiding more than $23.5 million in offshore bank accounts, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

          According to court documents, Masud Sarshar, a U.S. citizen, maintained several undeclared bank accounts at Bank Leumi and two other Israeli banks, both in his name and in the names of entities that he created. Sarshar owned and operated Apparel Limited Inc., a business that designed, manufactured and sold clothing and other apparel. For decades, with the assistance of at least two relationship managers from Bank Leumi and a second Israeli bank (Israeli Bank A), Sarshar hid tens of millions of dollars in assets in these accounts in an effort to conceal income and obstruct the Internal Revenue Service (IRS). Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income from the funds. Sarshar reported none of this income on his 2006 through 2012 individual and corporate tax returns. He also filed false Reports of Foreign Bank and Financial Accounts, commonly known as FBARs, with the U.S. Department of Treasury on which he omitted his ownership and control of these offshore accounts.

          “Masud Sarshar used every trick to avoid paying his taxes: he moved his money from foreign bank to foreign bank; switched passports and had his statements smuggled to the United States on a thumb drive secreted in the necklace of a bank manager,” said Acting Deputy Assistant Attorney General Goldberg. “He even tapped the funds in his offshore accounts through financial maneuvers that he thought would not leave a paper trail. However, Sarshar found out today -- with the imposition of a two-year prison sentence -- that secret foreign bank accounts can no longer be safely hidden from the Department of Justice and the IRS.”

          “Mr. Sarshar’s conduct was both egregious and staggering,” said Chief Richard Weber of IRS Criminal Investigation. “He knew the laws and purposefully hid his income to avoid paying taxes, cheating not only the U.S. government, but other law abiding tax payers who uphold their tax obligations. Hiding income in offshore banks is not tax planning, it’s fraud.”

          Sarshar’s relationship managers at Israeli Bank A (RM1) and Bank Leumi (RM2) visited him frequently in Los Angeles. At Sarshar’s request, neither bank sent him his account statements by mail. Instead, RM1 and RM2 provided Sarshar with his account information in person. RM2 concealed Sarshar’s account statements on a USB drive hidden in a necklace that she wore when she visited Sarshar in the United States. Sarshar’s meetings with RM1 sometimes occurred in Sarshar’s car. RM1 and RM2 used their visits to offer Sarshar other bank products, including “back-to-back” loans. Through back-to-back loans, which Bank Leumi made to Sarshar through its branch in the United States and which Sarshar collateralized with funds from his account at Israeli Bank A, Sarshar was able to bring back to the United States approximately $19 million of his assets without creating a paper trail or otherwise disclosing the existence of the offshore accounts to U.S. authorities. At the direction of RM1 and RM2, Sarshar also obtained Israeli and Iranian passports in an effort to avoid being flagged as a U.S. citizen by the banks’ compliance departments. The banks still flagged Sarshar as a U.S. citizen after Sarshar received these two passports, so RM1 and RM2 advised him to transfer his remaining funds from Israeli Bank A to Israeli Bank B, which Sarshar did in late 2011. In addition, with the help of someone identified as Individual 1, Sarshar transferred approximately $5.8 million from his Bank Leumi accounts to an account at Hong Kong Bank A, which Individual 1 then helped transfer to Sarshar in the United States, disguising it as a loan to Apparel Limited.

          In addition to the term of prison imposed, Sarshar was ordered to serve three years of supervised release and to pay more than $8.3 million in restitution to the IRS, plus interest and penalties. Sarshar also agreed to pay an FBAR penalty of more than $18.2 million for failing to report his Israeli bank accounts.

          Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Tino M. Lisella and Trial Attorney Timothy M. Russo of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Central District of California for their substantial assistance in the case.

          Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

          LOS ANGELES – A Corona man pleaded guilty today to federal criminal charges in connection with a scheme to submit false loan applications that brought him more than $6.6 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds.

          Muhammad Noor Ul Ain Atta, 39, pleaded guilty to a two-count information charging him with wire fraud and laundering of monetary instruments.

          According to his plea agreement, Atta submitted 11 fraudulent PPP loan applications for seven of his shell companies. The fraudulent PPP loan applications misrepresented the number of employees and the average monthly payroll expenses of Atta’s companies, and falsely certified he would use the loan proceeds for permissible business purposes. Atta also submitted false tax and payroll documentation in support of his loan applications. In total, Atta received $6,643,540 in loan proceeds even though none of his companies were legitimate recipients of relief funds at that time. Atta then laundered loan proceeds to bank accounts in the United States and Pakistan.

          The plea agreement details one PPP loan in which Atta sought $1,267,714 for a company called Envisioning Future Inc. The loan application falsely represented that

          Envisioning Future had 73 employees and falsely certified Envisioning Future would use the loan proceeds for permissible business purposes, including the payment of payroll and other business-related expenses. The fraudulent application filed on April 10, 2020 was supported by falsified federal tax returns and false payroll data.

          About one month later, Envisioning Future received $1,267,140 in loan proceeds, and the following day Atta wired most of the money to his mother’s bank account. Then in June 2020, Atta wired $1.3 million – the majority of which came from the Envisioning Future PPP loan – to a financial institution in Islamabad, Pakistan. According to the plea agreement, the wire transfer details included a note that the wire was “family support.”

          United States District Judge Percy Anderson scheduled an October 17 sentencing hearing, at which time Atta will face a statutory maximum penalty of 20 years in prison for each count.

          Acting United States Attorney Stephanie S. Christensen, Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, Acting Special Agent in Charge Cory Nootnagel of the Office of the Inspector General for the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection, Special Agent in Charge Ryan Korner of IRS Criminal Investigation, Special Agent in Charge Weston King of the Small Business Administration – Office of Inspector General, and Special Agent in Charge Rod Ammari of the Treasury Inspector General for Tax Administration made the announcement.

          Assistant U.S. Attorney Adam P. Schleifer of the Major Frauds Section and Trial Attorneys Jennifer L. Bilinkas and Matthew F. Sullivan of the Justice Department’s Fraud Section are prosecuting the case.

          On May 17, 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 https://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 (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

          LOS ANGELES – The Department of Justice has reached a settlement in a series of civil forfeiture cases against assets acquired by Low Taek Jho – a financier best known as Jho Low – and his family using funds allegedly misappropriated from 1Malaysia Development Berhad (1MDB) and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.

          The assets involved in settlements filed in 13 asset forfeiture cases are located in the United States, the United Kingdom and Switzerland, and are estimated to be worth more than $700 million. The assets subject to the settlement agreement include high-end real estate in Beverly Hills, New York and London; a luxury boutique hotel in Beverly Hills; and tens of millions of dollars in business investments that Low allegedly made with funds traceable to misappropriated 1MDB monies.

          With the settlements being filed today in United States District Court in Los Angeles, coupled with the prior disposition of other 1MDB-related forfeiture cases, the United States will have recovered or assisted in the recovery of more than $1 billion in assets associated with the international money laundering conspiracy related to Malaysia’s investment development fund. This represents the largest civil forfeiture ever concluded by the Justice Department.

          “A staggering amount of money embezzled from 1MDB at the expense of the people of Malaysia was laundered through the purchase of big-ticket assets in the U.S. and other nations. Thanks to this settlement, one of the men allegedly at the center of this massive scheme will lose all access to hundreds of millions of dollars,” said United States Attorney Nick Hanna. “The message in this case is simple: the United States is not a safe haven for pilfered funds. Our strict anti-money laundering controls are effective, and we will seize assets used by criminals to conceal ill-gotten gains.”

          According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were misappropriated by high-level officials of 1MDB and their associates, including Low. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.

          Under the terms of the settlement, Low, his family members, and FFP, a Cayman Islands entity serving as the trustees overseeing the assets at issue in these cases, agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest. The trustees are also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets. From the assets formerly managed by FFP, the United States will release $15 million to Low’s counsel to pay for legal fees and costs. Under the agreement, none of those fees may be returned to Low or his family members.

          “As alleged in the complaints, Jho Low and others, including officials in Malaysia and the United Arab Emirates, engaged in a brazen multi-year conspiracy to launder money embezzled or otherwise misappropriated from 1MDB, and he used those funds, among other things, to engage in extravagant spending sprees, acquiring one-of-kind artwork and luxury real estate, gambling freely at casinos, and propping up his lavish lifestyle,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This settlement agreement forces Low and his family to relinquish hundreds of millions of dollars in ill-gotten gains that were intended to be used for the benefit of the Malaysian people, and it sends a signal that the United States will not be a safe haven for the proceeds of corruption.”

          “Today's settlement with Jho Low demonstrates the continued commitment of the FBI to root out the fraud and selfishness of the corrupt individuals who conspired to pay bribes and launder funds which belong to the Malaysian people,” said FBI Assistant Director Terry Wade of the Criminal Investigative Division. “The FBI’s dedicated International Corruption Squads will continue to combat foreign corruption which reaches our shores. We will not allow criminals, foreign or domestic, to use the United States in furtherance of their criminal activities.”

          “The action announced today will allow the United States government to deny Mr. Low the use of the assets purchased with this extraordinarily large sum of money allegedly emblezzled from 1MDB and the people of Malaysia,” said Chief Don Fort of IRS Criminal Investigations. “Mr. Low allegedly attempted to launder these funds through multiple international jurisdictions and a web of shell corporations, but his greed finally caught up with him. This case is a model for international cooperation in significant cross-border money laundering investigations”

          The assets being forfeited subject to this settlement are in addition to the nearly $140 million in assets the U.S. previously forfeited in connection with Low’s investment in a business entity related to the Park Lane Hotel in New York, as well as a super-yacht, valued at over $120 million, seized by law enforcement authorities in Indonesia at the request of the Justice Department and recovered by Malaysian authorities directly from Indonesia. Several civil forfeiture complaints arising out of the 1MDB money laundering conspiracy remain pending against assets associated with other alleged co-conspirators.

          Low separately faces criminal charges in the Eastern District of New York and the District of Columbia. This agreement that resolves the asset forfeiture actions does not release any entity or individual from filed or potential criminal charges.

          The FBI’s International Corruption Squads in New York City and Los Angeles, as well as IRS Criminal Investigation, are investigating the case.

          The settlements being filed today were negotiated by Assistant United States Attorneys John Kucera, Michael R. Sew Hoy and Steven R. Welk of the Asset Forfeiture Section, and Justice Department trial attorneys Woo S. Lee, Kyle R. Freeny, Joshua L. Sohn, Barbara Levy and Jonathan Baum of Money Laundering and Asset Recovery Section. The Office of International Affairs is providing assistance.

          The Justice Department appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

          A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the United States.

          LOS ANGELES – A former California lawyer has been sentenced to 37 months in federal prison for lying to his clients about winning cases for them and then deceiving them with bogus documents – some with the forged signatures of judges, the Justice Department announced today.

          Matthew Charles Elstein, 52, of Redondo Beach, was sentenced late Monday afternoon by United States District Judge Mark C. Scarsi, who also ordered him to pay $254,354 in restitution.

          Elstein pleaded guilty in November 2021 to one count of wire fraud.

          Elstein was a licensed California attorney from December 1994 until the State Bar of California ordered him inactive in March 2019. From June 2015 to July 2018, Elstein engaged in a scheme to defraud his clients by falsely claiming he obtained favorable legal resolutions for them, when in fact the favorable resolutions had never been obtained.

          In some cases, Elstein never initiated any legal action. Elstein also admitted to misappropriating funds by falsely informing victims their fees were going into his client trust account, when in fact he directed them to deposit money into his personal bank account.

          “[Elstein] caused irreparable financial, reputational, and emotional damage to his victims that exceeds the mere monetary damage caused by a typical fraud,” prosecutors argued in a sentencing memorandum. “[Elstein’s] motive appears fueled not only by greed but also malice.”

          For example, in June 2016, Elstein falsely informed a corporate client that it had won a $52 million default judgment. He emailed the victim-client a fake court order that contained a judge’s forged signature. In order to conceal the fact that he never actually filed a lawsuit on his client’s behalf, Elstein further misrepresented that the case was improperly under seal due to a United States Department of Justice investigation.

          To further his fraudulent scheme, Elstein presented his clients with a fake settlement agreement between the client and the United States Attorney’s Office for the Eastern District of California. It was not until the company reached out to that United States Attorney’s Office to authenticate the settlement agreement that it discovered that the agreement was a forgery.

          Elstein also fabricated depositions in a federal case in Washington state in September 2015. Because these depositions were fake, no one appeared for them. Nonetheless, Elstein had a court stenographer present and made a formal record of the nonappearances. Elstein also billed the client for attending the sham depositions and his travel expenses to Seattle.

          Elstein also falsely told the victim that he had obtained a $4.25 million judgment in the victim’s favor and provided the victim with a fake court order containing the forged signature of a judge. When the victim traveled to Seattle to collect the judgment, he was informed by the court that no such case existed.

          In total, Elstein’s fraudulent schemes resulted in losses of at least $358,855 to his victims.

          The FBI’s Public Corruption Squad investigated this matter.

          Assistant United States Attorney Daniel J. O’Brien of the Public Corruption and Civil Rights Section prosecuted this case.

LOS ANGELES – A woman from the Mid-City area of Los Angeles was sentenced to 60 months in federal prison for fraudulently obtaining more than $2 million in COVID-19 government loans and to submitting false claims in an unsuccessful effort to secure from the IRS nearly $1.3 million in pandemic-related tax credits, the Justice Department announced today.Casie Hynes, 39, was sentenced late Thursday afternoon by United States District Judge Hernán D. Vera, who also ordered her to pay $2,376,168 in restitution.In April 2024, Hynes pleaded guilty to one count of wire fraud and one count of false claims.“The defendant exploited a crisis to line her own pockets, diverting vital relief funds from businesses that needed the money,” said Acting United States Attorney Joseph McNally. “The sentence imposed today sends a message to others that you will be held accountable if you steal government relief funds.”From June 2020 to December 2021, Hynes submitted more than 80 fraudulent applications for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) from banks and the United States Small Business Administration (SBA) in the names of approximately 20 companies. Congress designed these programs to provide government relief to businesses during the COVID-19 pandemic.Hynes submitted the bogus applications in the names of both existing and newly created companies, including Nasty Womxn Project and She Suite Collective and others purportedly owned by Hynes or her friends and family members. On those applications, Hynes often used the personal information and signatures of other people without their authorization and even though those people were not involved with the companies. Hynes also provided false information on the applications, including as to the number of purported employees at the companies, the companies’ average monthly payroll, and who purportedly owned and controlled these sham businesses. Hynes also submitted fabricated tax documents and bank statements in support of the fraudulent PPP and EIDL applications.In reliance on Hynes’ fraudulent loan applications, banks and the SBA approved PPP and EIDL loans for the various companies she created and then disbursed the COVID-19 relief funds into bank accounts she controlled and used to pay for her own personal expenses.Hynes admitted that she intended to cause approximately $3,174,323 in losses and she received approximately $2,255,244 in fraudulent proceeds from this scheme.In a related scheme, Hynes used some of the same companies named in her PPP and EIDL fraud to submit bogus tax forms to the IRS, requesting refunds. Following COVID-19’s outbreak, Congress enacted laws authorizing the IRS to reduce the employment tax burdens of small businesses and reimburse those businesses for wages paid to employees who were on sick or family leave and could not work because of the pandemic. During the tax years 2020 and 2021, the IRS offered the Employee Retention Credit and paid sick and family leave credit to businesses that were significantly impacted by COVID-19.From May 2021 to April 2022, Hynes caused to be submitted 12 tax forms that sought refunds based on false statements on behalf of Nasty Womxn Project LLC, She Suite Ventures, and Casie Hynes Consulting. Hynes knew these companies had little to no business operations, did not have the number of employees she claimed, and did not pay the quarterly wages she claimed in the tax forms.Hynes fraudulently sought approximately $1,255,703 in COVID-19 tax credits and tax refunds through these false claims, none of which the IRS paid.IRS Criminal Investigation investigated this matter.Assistant United States Attorney Kristen A. Williams of the Major Frauds Section prosecuted this case.On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across the federal 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 actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, 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.Tips and complains from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint From at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

          LOS ANGELES – A former music teacher who contracted with a number of school districts in Southern California was arrested today pursuant to a federal grand jury indictment that alleges multiple crimes against children, including the production of child pornography.

          John Edward Zeretzke, 60, of Ventura, was arrested late this morning without incident by the United States Postal Inspection Service and the Los Angeles County Sheriff’s Department. Zeretzke is expected to be arraigned on the indictment this afternoon in United States District Court in downtown Los Angeles.

          The five-count indictment alleges that Zeretzke coerced a female minor to produce child pornography, that he attempted to entice another victim to send him sexually explicit images, that he traveled to the Philippines with the intent to engage in illicit sexual conduct with other minor victims, and that he twice received child pornography over the internet.

          None of the victims in this case are located in Southern California.

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

          If convicted of the charges in the indictment, Zeretzke would face a statutory maximum penalty of life in federal prison. He also would face mandatory minimum sentences for several of the offenses, including a mandatory 15-year prison for the offense of producing child pornography.

          This case is being investigated by the United States Postal Inspection Service and the Los Angeles Sheriff’s Department, Special Victims Bureau.

          This matter is being prosecuted by Assistant United States Attorney Justin Rhoades, Chief of the Violent and Organized Crime Section.

          LOS ANGELES – A Gardena man was sentenced today to 162 months in federal prison for running a multi-year scam in which he fraudulently obtained nearly $1 million in business loans by setting up shell corporations – complete with people paid to pose as fake corporate “officers” – that deceived small business lenders into believing they were legitimate companies.

          Troy Rustill Stroud, 54, of Gardena, was sentenced by United States District Judge Stephen V. Wilson, who also ordered him to pay $968,169 in restitution.

          Stroud pleaded guilty in August 2020 to one count of conspiracy to commit wire fraud. He has been in federal custody since his arrest in this matter in May 2020.

          Stroud created several corporations that purported to be in business, but in fact did none. The sham businesses included kitchen remodeling companies Glorious Oak Company and Glossy Grape Investments Inc., and Polished Pine Group, an audio-visual company, according to court documents. Stroud applied for business loans from at least 22 financial institutions and used the names of 14 companies in doing so, court documents state.

          Stroud conducted a series of transfers from bank accounts in some of his corporations’ names to those held in other names to make it appear that the sham corporations were engaging in business.

          Stroud paid other people to pretend to be officers of his corporations, and then he used the names of those “officers” to apply online for business loans for his sham companies. Stroud falsely reported that the shell companies had substantial revenues when in fact they had none.

          When Stroud received the loan proceeds, he used them to pay for his personal expenses, and defaulted on the loans immediately or after a payment or two. Stroud admitted that his scheme to defraud lenders caused $968,169 in actual losses.

          The FBI investigated this matter.

          Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.

LOS ANGELES – An Oklahoma man who grew up in Los Angeles pleaded guilty today to a federal criminal charge for telephoning bomb threats to five Los Angeles schools, including two elementary schools, and threatened to shoot the children as they exited one of the elementary schools.

Marcus Jamal Sanchez, 45, a.k.a. “Marcus James Buchanan,” of Blackwell, Oklahoma, pleaded guilty to one count of making a threat through interstate commerce to damage and destroy buildings by fire and explosives.

Sanchez, who was arrested in June 2022, has been free on bond since July 2022.

“Sanchez put children, teachers, and staff at risk through his reckless and irresponsible actions,” said United States Attorney Martin Estrada. “Schools should be safe havens for our kids, and my office will use the force of federal law – when necessary – to prosecute individuals who threaten the educational safety of our young people.”

“The depraved act of making death threats to vulnerable schoolchildren is incomprehensible to most and will not be tolerated by the FBI, nor the American people,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “When threats such as these are reported, they must always be treated as credible and so they continue to drain valuable resources from law enforcement at the expense of the taxpayers who fund them.”

“The Los Angeles School Police Department’s commitment to the safety of our school communities is our top priority,” said Lieutenant Nina Buranasombati, LASPD spokesperson. “We are pleased with the significant step toward justice for the affected school communities. We sincerely appreciate the dedication and collaboration of all parties involved in the judicial process.”

According to his plea agreement, during a period of less than two hours on the morning of February 28, 2022, Sanchez called in bomb threats to two elementary schools, two middle schools, and a high school in Los Angeles. In a call to one of the elementary schools, Sanchez threatened to shoot the children as they exited the building.

On April 27 and 28, Sanchez made additional bomb threats to two of the Los Angeles schools he previously threatened, threatening to shoot and kill children at other schools. On the afternoon of April 27, Sanchez called an elementary school and said to a school employee, “There is a bomb at your school, and we will shoot the kids when they get out of the school. That is what you get for not accepting me in ’86,” according to his plea agreement.

After receiving the threat, the school staff notified police and placed the school on lockdown. Police searched the campus for explosives or unusual items but found none.

On April 28, Sanchez called the same school again and said there was a pipe bomb placed at the school’s address. After receiving the bomb threat, the school staff notified police and placed the school on lockdown. Police searched the campus for explosives or unusual items but found none.

That same day, Sanchez called a different elementary school and said, “Stop playing games; you know who this is. I am going to shoot the school. I know the kids are there.” Afterwards, the school was placed on lockdown, but – as with all the incidents – no explosives or unusual items were found.

United States District Judge Josephine L. Staton scheduled a June 7 sentencing hearing in this case, at which time Sanchez will face a statutory maximum sentence of 10 years in federal prison.

The FBI and the Los Angeles School Police Department investigated this matter.

Assistant United State Attorney Jena A. MacCabe of the Violent and Organized Crime Section is prosecuting this case.

          LOS ANGELES – A Corona man was sentenced today to 102 months in federal prison for fraudulently obtaining more than $6.6 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds intended for business owners impacted by the economic shock of the COVID-19 pandemic and then laundering his illegal proceeds into financial instruments and real property in Pakistan.

          Muhammad Noor Ul Ain Atta,39, was sentenced by United States District Judge Percy Anderson, who also ordered him to pay $6,643,540 in restitution.

          “It’s important that the sentence imposed today sends the message that there are serious consequences for defrauding federal relief programs,” Judge Anderson said.

          Atta pleaded guilty on August 2 to one count of wire fraud and one count of money laundering.

          From March through July 2020, Atta submitted 11 fraudulent loan applications for seven of his shell companies. The fraudulent applications misrepresented the number of employees and the average monthly payroll expenses of Atta’s companies, and falsely certified he would use the loan proceeds for permissible business purposes. Atta also submitted false tax and payroll documentation in support of his loan applications.

          For one PPP loan, Atta sought $1,267,714 for a company called Envisioning Future Inc. The loan application falsely represented that Envisioning Future had 73 employees and falsely certified Envisioning Future would use the loan proceeds for permissible business purposes, including the payment of payroll and other business-related expenses. The fraudulent application filed on April 10, 2020 was supported by falsified federal tax returns and false payroll data.

          About one month later, Envisioning Future received $1,267,140 in loan proceeds, and the following day Atta wired most of the money to his mother’s bank account. Then in June 2020, Atta wired $1.3 million – the majority of which came from the Envisioning Future PPP loan – to a financial institution in Islamabad, Pakistan. The wire transfer details included a note that the wire was “family support.”

          In total, Atta received $6,643,540 in loan proceeds even though none of his companies were legitimate recipients of relief funds at that time. Atta then laundered loan proceeds to bank accounts in the United States and Pakistan.

          Atta fled the United States in May 2020 and invested some $2.1 million of his ill-gotten gains into Pakistani financial instruments and another $3.5 million into the purchase of land in Pakistan. Almost two years months later, he was apprehended as he traveled through Los Angeles International Airport.

          “The PPP and EIDL programs did not create a limitless pot of money,” prosecutors argued in a sentencing memorandum. “By taking money that he was not entitled to, [Atta] reduced the funds available to other legitimate applicants and defrauded the taxpayers supporting the programs.”

          The Office of the Inspector General for the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection, IRS Criminal Investigation, the Small Business Administration – Office of Inspector General, and the Treasury Inspector General for Tax Administration investigated this matter.

         Assistant U.S. Attorney Adam P. Schleifer of the Major Frauds Section and Trial Attorneys Jennifer L. Bilinkas and Matthew F. Sullivan of the Justice Department’s Fraud Section prosecuted this case.

          On May 17, 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 https://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 (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

INFORMATION (Chavez)   PLEA AGREEMENT (Chavez)   PLEA AGREEMENT (Pacheco)            

         LOS ANGELES – A former San Bernardino County planning commissioner has agreed to plead guilty to a federal criminal charge for funneling bribes through his company to a corrupt Baldwin Park politician in exchange for the politician’s votes and influence over the city’s cannabis permitting process, the Justice Department announced today.

          Gabriel Chavez, 65, of Upland, agreed to plead guilty to a one-count criminal information charging him with bribery. Both the information and Chavez’s plea agreement were filed today in United States District Court, and Chavez is expected to enter a guilty plea in the coming weeks.

          The politician who solicited the bribes – former Baldwin Park City Councilmember Ricardo Pacheco – pleaded guilty in June 2021 to a federal bribery charge. Federal prosecutors today also unsealed additional portions of Pacheco’s plea agreement in which he admits to bribery schemes involving Chavez and other individuals.

          Pacheco was first elected to the Baldwin Park City Council in 1997 and served as mayor pro-tem in 2018. He resigned from the city council in June 2021 and is awaiting sentencing.

          Both Chavez and Pacheco have signed plea agreements in which they have agreed to cooperate in the government’s ongoing investigation.

          According to Chavez’s plea agreement, in June 2017, Baldwin Park began permitting the cultivation, sale and manufacturing of marijuana within its city limits. Soon afterward, Pacheco decided to solicit bribe payments from businesses seeking marijuana development agreements and related permits in the city. In exchange for the illicit payments, Pacheco agreed to use his position in city government to assist the companies with obtaining marijuana permits.

          Chavez agreed to act as an intermediary to funnel those bribes to Pacheco by using his Claremont-based internet marketing company, Market Share Media Agency. In exchange for the bribes, Pacheco agreed to vote and use his influence over the city’s permitting process to secure marijuana permits for two companies, identified in court documents as “Marijuana Company 3” and “Marijuana Company 4.”

          Pacheco and Chavez agreed that Pacheco would get 60% of the companies’ bribe money while Chavez would retain the remainder as payment primarily for facilitating the bribes.

          Chavez obtained bribe payments to pass to Pacheco from an individual identified in court papers as “Person 14,” another public official, who was helping Marijuana Company 4 obtain its marijuana permit. To conceal the true nature of the payments, the bribes Chavez accepted were disguised as consulting payments from Person 14’s consulting company to Market Share Media Agency.

          From August 2017 to March 2018, Chavez received at least $125,000 from Marijuana Company 3 and at least $45,000 on behalf of Marijuana Company 4, none of which he reported to the IRS as personal income or as his company’s revenue. Chavez paid Pacheco between $80,000 and $93,000 in cash, out of at least $170,000 collected from both companies.

          On multiple occasions, Chavez used coded language in text messages to tell Pacheco that he had cash bribes to pass to him. For example, in January 2018, Chavez sent Pacheco a text message stating, “I’m planning to bring all the documents…,” by which Chavez meant he planned to bring Pacheco cash bribes.

          Per Chavez’s agreement with Pacheco, the cash payments were in exchange for Pacheo’s votes on the two companies’ marijuana permits and Pacheco’s help securing the necessary votes from other members of the Baldwin Park City Council.

          Pacheco performed his end of the bargain, voting in favor of Marijuana Company 3 and Marijuana Company 4’s cannabis permits, first in December 2017 and later in May 2018.

          Chavez further admitted in his plea agreement that Market Share Media Agency won a no-bid, $14,500 contract from the City of Huntington Park signed by Person 14. The no-bid contract represented, in part, further compensation for Chavez in his efforts facilitating the bribe to Pacheco to secure the marijuana permit for Marijuana Company 4 in Baldwin Park. To further secure this permit, Person 14 gave Chavez a $5,000 check made payable to the church associated with the school where Pacheco’s child attended.

          Chavez was appointed to the San Bernardino County Planning Commission in June 2018 but resigned in November 2018 after the FBI executed a search warrant at his home.

          The FBI and IRS Criminal Investigation are investigating this matter.

          Any member of the public who has information related to this or any other public corruption matter in Los Angeles County is encouraged to send information to the FBI’s email tip line at pctips-losangeles@fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.

          Assistant United States Attorneys Thomas F. Rybarczyk and Lindsey Greer Dotson of the Public Corruption and Civil Rights Section are prosecuting this case.

LOS ANGELES – A Santa Clarita Valley tax preparer pleaded guilty today to fraudulently including false information on federal income tax returns to get substantial refunds for his clients – and cause large tax losses to the U.S. Treasury – and COVID-19 business-relief loan applications to obtain money he used for unauthorized purposes. Kerwin Aldric Jordan, 71, of Castaic and formerly of Pebble Beach, pleaded guilty to four counts of aiding in the preparation of false federal income tax returns and one count of wire fraud.According to his plea agreement, Jordan was the president of The Jordan Corporation, a tax preparation business, and also owned and operated a business called Jordan and Jordan A Financial Conquest. Jordan held himself out as a tax attorney and certified public accountant, neither of which he was. Jordan prepared federal tax returns for his clients which fraudulently reduced his taxpayer-clients’ taxable income. Jordan falsely reported that the taxpayer-clients had one or more businesses, even though he knew the businesses did not exist. He also reported losses for these non-existent businesses and used those losses to reduce the taxpayer-clients’ taxable income.For example, Jordan reduced a married couple’s $2 million income with fraudulent expenses of more than $1 million for non-existent businesses, eliminating additional taxes the couple would have owed and generating a tax refund of almost $25,000. The couple paid Jordan nearly $28,000 for the preparation of their return.From 2018 to 2023, Jordan filed more than 1,370 federal tax returns for clients, which reported total business losses over $73 million. Prosecutors contend that the tax returns Jordan prepared resulted in more than $25 million in losses to the United States Treasury.Jordan also lied on loan applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), two programs Congress created in March 2020 to help businesses weather the economic impact of the COVID-19 pandemic.Jordan applied for PPP loans for his companies and received a total of $188,667. He also applied for EIDL loans for Jordan and Jordan; Euphrates Wealth Asset Management, of which he was the owner; and Lifestyles of the Rich in Faith Church, a non-profit organization of which he was the principal, receiving a total of $276,600. To obtain these loans, Jordan falsely reported that the companies had employees when, in fact, they had none.United States District Judge Stephen V. Wilson scheduled an October 5 sentencing hearing, at which time Jordan will face a statutory maximum sentence of 32 years in federal prison.The IRS Criminal Investigation investigated this case. Assistant United States Attorney Ranee A. Katzenstein, Deputy Chief of the Criminal Division, and Matthew R. Hoffman of the Justice Department’s Criminal Division, Tax Section, are prosecuting this case. 

          LOS ANGELES – A Santa Barbara man who allegedly stole approximately $12 million from victims who thought their investments would be used to purchase annuities today faces new charges of failing to pay over $3 million in federal income tax and concealing bank accounts in Monaco used to hide ill-gotten gains.

          A superseding indictment filed today in United States District Court charges Darrell Arnold Aviss, 64, with three counts of tax evasion, six counts of failing to report foreign bank and financial accounts, and one count of aggravated identity theft.

          Aviss was arrested last June and initially charged with five counts of wire fraud and six counts of money laundering for allegedly operating a Ponzi scheme that promised to invest victims’ money in annuities from Swiss insurance companies. The original 11 charges are included in today’s superseding indictment that alleges Aviss used none of the victim funds to purchase annuities.

          Aviss, who was jailed for about three months before a judge ordered him released in September on a $200,000 bond, is currently scheduled to go on trial July 26. He will be directed to appear for an arraignment on the superseding indictment in the coming weeks.

          Aviss allegedly operated the fraud scheme from at least 2012 through mid-2020, soliciting money from people who wanted to purchase annuities from insurance companies based in Switzerland. Even though he arranged for the victims to receive statements showing the value of the annuities were increasing, the indictment alleges Aviss did not use the victims’ money to purchase annuities. Victims, most of whom were over the age of 60, gave Aviss more than $12 million, with most of that money coming from just one victim, according to court documents. Some money was paid back to victims to keep the scheme running.

          Instead of purchasing annuities, Aviss allegedly used the victims’ money for his own purposes and to support his lavish lifestyle, which included luxury cars, expensive watches and trips to Monaco.

          The superseding indictment alleges that Aviss also defrauded the United States by failing to file tax returns for 2014, 2015 and 2016 and failing to pay any income taxes for those years. Aviss allegedly evaded paying more than $3 million in income taxes.

          Aviss also failed to file with the Department of the Treasury Reports of Foreign Bank and Financial Accounts for the years 2015 through 2020 relating to accounts he controlled in Monaco. The superseding indictment alleges that he transferred victims’ money to these offshore accounts, one of which was established with information from an identity theft victim.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          If convicted of the charges in the superseding indictment, Aviss would face decades in federal prison. For example, each of the five counts of wire fraud carries a statutory maximum sentence of 20 years in federal prison.

          The FBI and IRS Criminal Investigation are conducting the investigation in this matter.

          Assistant United States Attorney Monica E. Tait of the Major Frauds Section is prosecuting this case.

          SANTA ANA, California – The Justice Department today announced that California Auto Finance, a subprime auto lending company based in the City of Orange, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty.

          The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc. on March 28, 2018 alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by a federal judge, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000 – which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case – and pay a $50,000 civil penalty to the United States.

          “Individuals who take up the call to protect our nation by serving in the armed forces make an enormous sacrifice for us all,” said United States Attorney Nick Hanna. “We have a legal and moral duty to safeguard the rights of our men and women in uniform. California Auto Finance failed to uphold this duty through its repossession practices. Today’s consent order demonstrates that we will tolerate no abuses of servicemembers’ rights in our district.”

          “This case sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division. “We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it belongs to a servicemember. Servicemembers who are going through basic training or another kind of military service should not have to worry that their cars will be repossessed with no court supervision during their time of service to our country.”

          The Justice Department initiated its investigation of California Auto Finance after receiving a complaint in November 2016 from United States Army Private Andrea Starks. The United States alleges that in April 2016, Private Starks notified California Auto Finance that she would be entering the military the following month. Despite this advance notice, California Auto Finance repossessed Private Starks’ vehicle without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri. At the time of repossession, the vehicle was parked at the home of Private Starks’ grandmother in Cedar Rapids, Iowa.

          The Justice Department’s investigation corroborated Private Starks’ complaint, found that California Auto Finance had no policies related to SCRA compliance, and revealed that California Auto Finance had also violated the SCRA rights of U.S. Army Specialist Omar Martinez. The United States alleges that Specialist Martinez informed California Auto Finance that he would be entering the military, and that he would have limited means of communication during basic training. Nonetheless, California Auto Finance repossessed Specialist Martinez’s vehicle during his first month of military service. The repossession severely damaged Specialist Martinez’s credit, and, as a result, he was unable to purchase a new car. For over a year while living on base at Fort Benning, Georgia, Specialist Martinez had to rely on rideshares and taxis to buy groceries and take care of other personal needs. In March 2018, Specialist Martinez deployed to Afghanistan, where he served until November 2018.

          The proposed consent order requires California Auto Finance to pay $30,000 in compensation to Specialist Martinez, and to take steps to repair his credit. In addition, the proposed consent order requires California Auto Finance to take steps to ensure it does not repossess servicemembers’ cars without court orders in the future. Private Starks reached a private settlement with California Auto Finance before the proposed consent order was filed.

          The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, California Auto Finance prevented servicemembers from obtaining a court’s review of whether their repossessions should have been delayed or adjusted to account for their military service.

          The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with United States Attorney’s Offices. Housing and Civil Enforcement Section attorneys worked jointly with the Civil Rights Section within the Civil Division of the United States Attorney’s Office in this action.

          Since 2011, the Justice Department has obtained over $469 million in monetary relief for over 119,000 servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance, and income tax payments. For more information about the Justice Department’s SCRA enforcement, please visit www.servicemembers.gov.

          Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/.

          LOS ANGELES – A Santa Clarita resident who invested in real estate and sold “coupon bonds” that promised regular interest payments on top of principal repayment was sentenced today to 77 months in federal prison for defrauding investors out of more than $1.7 million.

          Matthew Skinner, 45, was sentenced by United States District Judge Percy Anderson, who also ordered him to pay $1,744,946 in restitution.

          Skinner pleaded guilty on June 1 to one count of securities fraud.

          In 2014, Skinner founded a company called Empire West Equity Inc. and later established another business named Simple Growth LLC. Skinner used social media platforms such as Facebook and YouTube to promote himself, falsely claiming to be an experienced and successful real estate investor with more than $200 million in deals under his belt.

          After Empire West experienced financial troubles – Skinner was unable to pay his staff and investors – he established Simple Growth in 2018 and falsely told investors who purchased Simple Growth coupon bonds “that their money would be used to purchase real estate that [Skinner] and Empire West would develop and resell at a profit,” according to court documents.

          Skinner did not intend to purchase, develop or resell real estate, and that he instead used investor funds to pay older investors, his employees and himself. Instead, Skinner used investor funds from those entities and accounts to pay for personal trips, his mortgage, his utility bills, cosmetic surgery, and alimony payments to his ex-wife.

          Simple Growth raised approximately $1,744,946 from more than 20 investors – none of whom received any of their money back.

          “Several of the victims were elderly and were seeking safe investment opportunities,” prosecutors argued in a sentencing memorandum. “Several of the victims described how [Skinner} repeatedly lied to them and made-up excuses of why he was unable to make the quarterly interest payments.”

          The FBI investigated this case.

          Assistant United States Attorney Jeff Mitchell of the Major Frauds Section prosecuted this case.

          LOS ANGELES – A High Desert physician remains in federal custody today after his arrest Wednesday on charges of illegally dispensing prescriptions for often-abused controlled substances – including opioid-based medications – during telemedicine sessions with “patients” from across the United States.

          Dr. Raphael Tomas Malikian, 36, who resides in Llano and Palmdale and called his medical practice Happy Family Medicine, was arrested Wednesday afternoon by special agents with the Drug Enforcement Administration.

          An indictment naming Malikian was unsealed at his arraignment Thursday evening, when Malikian entered not guilty pleas and a United States Magistrate Judge ordered him detained pending trial, which is currently scheduled for October 5.

          Malikian is charged in an 11-count indictment with illegally distributing narcotics “while acting and intending to act outside the usual course of professional practice and without a legitimate medical purpose.” The controlled substances that Malikian allegedly distributed are oxycodone, hydrocodone, alprazolam, promethazine and codeine.

          The DEA investigation was prompted by multiple reports in February 2020 of suspicious prescriptions issued by Malikian. The indictment alleges specific incidents in which Malikian prescribed controlled substances without a medical purpose after seven telemedicine consultations – including one conducted entirely via text message – starting in April 2020 and continuing through July 2020. None of the consultations involved any physical exam or diagnostic tests, and the appointments lasted as little as 2 minutes and 20 seconds.

          A federal judge on Thursday unsealed search warrants executed at Malikian’s residences in conjunction with his arrest. The affidavit in support of the search warrants outlines the DEA’s investigation, which included various undercover operations in which agents from the DEA and California DOJ posed as patients and received the prescriptions that form the basis of the indictment. The DEA agent who authored the affidavit concluded that Malikian “effectively sells prescriptions for controlled substances to patients upon request, and does so without obtaining a patient’s medical history or conducting a physical examination.”

          According to the affidavit, an independent medical expert reviewed the interactions between Malikian and the undercover agents and “concluded that Malikian ‘did not thoroughly evaluate his patients’ before prescribing ‘potent and potentially deadly medications,’ and had done so ‘without any regard to what is required of conscientious physicians in the United States before proceeding with controlled medications.’”

            A DEA investigator also reviewed patient records maintained by Malikian, which showed that Malikian saw patients across the United States and that about 43 percent of them shared common addresses, email addresses, “caregivers” or phone numbers with other patients. According to the affidavit, one of those patients was a convicted narcotics trafficker and another was stopped at Los Angeles International Airport while carrying over $19,000 in cash and approximately 1,764 Hydrocodone and Alprazolam pills.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          The charges alleged in the indictment carry different statutory maximum sentences. Seven of the counts allege the illegal distribution of opioids, such as oxycodone, and those charges carry a maximum possible penalty of 20 years in federal prison.

          The DEA is conducting an ongoing investigation in this case. The California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse provided substantial assistance.

          Assistant United States Attorney Marina A. Torres of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.

LOS ANGELES – A Japanese-language translator was charged today via federal criminal complaint with unlawfully transferring more than $16 million from a Major League Baseball (MLB) player’s bank account – without the player’s knowledge or permission – to pay off his own substantial gambling debts incurred with an illegal bookmaking operation.

Ippei Mizuhara, 39, of Newport Beach, is charged with bank fraud, a felony offense that carries a statutory maximum sentence of 30 years in federal prison.

Mizuhara is expected to appear in United States District Court in downtown Los Angeles for his initial appearance in the near future.

According to an affidavit filed with the complaint, from November 2021 to January 2024, Mizuhara wired more than $16 million in unauthorized transfers from a checking account belong to an MLB player identified in the affidavit as “Victim A,” who in fact is MLB star Shohei Ohtani. The transfers from this bank account allegedly were made from devices and IP addresses associated with Mizuhara, who served as Ohtani’s translator and de facto manager.

In 2018, Mizuhara accompanied Ohtani, who didn’t speak English, to a bank branch in Arizona to assist Ohtani in opening the account and translated for Ohtani when setting up the account details. Ohtani’s salary from playing professional baseball was deposited into this account and he never gave Mizuhara control of this or any of his other financial accounts, according to the affidavit. Mizuhara allegedly told Ohtani’s U.S.-based financial professionals, none of whom spoke Japanese, that Ohtani denied them access to the account.

In September 2021, Mizuhara began gambling with an illegal sports book and, several months later, started losing substantial sums of money, the affidavit states. During this time, the contact information on Ohtani’s bank account allegedly was changed to link the account to Mizuhara’s phone number and to an anonymous email address connected to Mizuhara.

Mizuhara allegedly also telephoned the bank and falsely identified himself as Ohtani to trick bank employees into authorizing wire transfers from Ohtani’s bank account to associates of the illegal gambling operation.

From January 2024 to March 2024, he also allegedly used this same account to purchase via eBay and Whatnot approximately 1,000 baseball cards – at a cost of approximately $325,000 – and had them mailed to Mizuhara under an alias, “Jay Min,” and mailed to the clubhouse for Ohtani’s current MLB team.

In an interview last week with law enforcement, Ohtani denied authorizing Mizuhara’s wire transfers. Ohtani provided his cellphone to law enforcement, who determined that there was no evidence to suggest that Ohtani was aware of, or involved in, Mizuhara’s illegal gambling activity or payment of those debts.

A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

IRS Criminal Investigation and Homeland Security Investigations are investigating this matter.

Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section, Dan Boyle of the Environmental Crimes and Consumer Protection Section, and Rachel N. Agress of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.

          LOS ANGELES – A Santa Clarita Valley man pleaded guilty today to a federal criminal charge that he fraudulently obtained more than $1 million in Paycheck Protection Program (PPP) loans for his sham companies by submitting fake tax documents and fraudulent employee information.

          Raymond Magana, 40, of Santa Clarita, pleaded guilty to one count of fraud in connection with major disaster or emergency benefits.

          According to his plea agreement, in May and June 2020, Magana submitted to banks applications for PPP loans that contained false statements about the number of employees and the amount of payroll expenses. Specifically, on June 3, 2020, Magana submitted a PPP loan application to Customer’s Bank for $940,416 for The Building Circle LLC, a company registered in his name. In that application, Magana falsely listed that the company’s average monthly payroll was $376,167, and it employed 40 workers. Magana admitted to submitting fraudulent tax documents that reported $4,402,000 in annual wages paid to 40 employees in 2019 and $852,000 paid in employee wages during the first quarter of 2020.

          Both IRS and California Employment Development Department records showed that the company never reported paying any employees, and the underwriting packet also did not include a list of employees or associates for the company, according to an affidavit filed with a criminal complaint in this case.

          Investigators later determined that the Pico Rivera address given as The Building Circle’s headquarters was a 980-square-foot, single-family home that appeared to be a residence, not a business. Ultimately, the loan application was approved and $940,416 was funded to Magana’s shell company on June 4, 2020, the affidavit states.

          Magana also admitted that he applied for and received a PPP loan of $360,415 for Forward Builders LLC, another shell company, using fake tax documents and false employee information, and falsely claiming $1.73 million in employee wages.

          When a bank manager contacted Magana after one of the business accounts receiving PPP funds had been frozen because of suspicious activity, he told the bank “We have all the documents, we got approved,” and he refused to agree to return the improperly obtained PPP funds, the affidavit states. The bank nonetheless kept the $940,416 in defendant’s bank account frozen and defendant could not access it, the plea agreement states.

          The actual loss from the two loans that were approved and disbursed was $360,415, according to the plea agreement.

          United States District Judge Stanley Blumenfeld Jr. has scheduled a May 11 sentencing hearing, at which time Magana will face a statutory maximum sentence of 30 years in federal prison.

          The Coronavirus Aid, Relief, and Economic Security (CARES) Act was 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 more than $300 billion in additional PPP funding. In December 2020, Congress authorized $250 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 1 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 period and use at least a certain percentage of the loan towards payroll expenses.

          In December 2020, Steven R. Goldstein, 36, of Northridge, Magana’s business partner, pleaded guilty to a single-count information charging him with fraud in connection with major disaster or emergency benefits. Goldstein admitted that he fraudulently obtained $655,000 in PPP loans for his companies by submitting false tax documents and fake employee information. Goldstein’s sentencing hearing is scheduled for March 30.

          IRS Criminal Investigation and the Small Business Administration Office of Inspector General investigated this case.

          Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting this case.

LOS ANGELES – A Los Angeles-area man pleaded guilty today a federal felony charge and admitted to seeking more than $65 million from the IRS by falsely claiming on tax returns that his nonexistent farming business was entitled to COVID-19-related tax credits.Kevin J. Gregory, 57, pleaded guilty to one count of making false claims to the IRS. Gregory has been in federal custody since May 2023.In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit that a small business could use to reduce the employment tax it owed to the IRS, also known as the “employee retention credit.”To qualify, the business had to have been in operation in 2020 and to have experienced at least a partial suspension of its operations because of a government order related to COVID-19 (for example, an order limiting commerce, group meetings or travel) or a significant decline in profits. The credit was an amount equal to a set percentage of the wages that the business paid to its employees during the relevant time period, subject to a maximum amount.Congress also authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19. This “paid sick and family leave credit” was equal to the wages the business paid the employees during the sick or family leave, also subject to a maximum amount.According to his plea agreement, from November 2020 to April 2022, Gregory made false claims to the IRS for the payment of nearly $65.4 million in tax refunds for a purported Beverly Hills-based farming-and-transportation company named Elijah USA Farm Holdings.The IRS issued a portion of the refunds Gregory claimed, and Gregory used that portion – more than $2.7 million – for personal expenses. Specifically, in January 2022, Gregory made a false claim to the IRS for the payment of a tax refund in the amount of $23,877,620, which he submitted as part of Elijah Farm’s quarterly federal tax return. Gregory claimed Elijah Farm employed 33 people, paid nearly $1.6 million in quarterly wages, had deposited nearly $18 million in federal taxes, and was entitled to nearly $6.5 million in COVID-relief tax credits.In fact, Gregory knew that Elijah Farm employed nobody and paid wages to no one and had not made federal tax deposits to the IRS in the amounts stated on his tax return.United States District Judge Josephine L. Staton scheduled a May 16 sentencing hearing, at which time Gregory will face a statutory maximum sentence of five years in federal prison.IRS Criminal Investigation investigated this matter.Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section is prosecuting this case.On May 17, 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, among other methods, 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. More information on the Justice Department’s response to the pandemic may be found here.           Anyone with information about allegations of attempted fraud involving COVID-19 can report it to the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF online complaint form.

          LOS ANGELES – Law enforcement today arrested eight individuals named in a federal grand jury indictment charging them with creating nonexistent businesses and then claiming more than $1.1 million in unemployment benefits for purported employees of those fake businesses.

          The nine-count indictment unsealed today alleges a three-year conspiracy to cheat the state’s unemployment insurance program through the creation of bogus cleaning services and boutique stores, sometimes using the names of prison inmates as phony employees with which to collect the benefits.

          The indictment charges each of the eight defendants with one count of conspiracy to commit wire fraud and one count of aggravated identity theft. Those named in the indictment are:

Donna Givens, 58, of the Gramercy Park area of the City of Los Angeles;

Catrina Gipson, 44, of Moreno Valley, who is Givens’ niece;

Evelyn Taylor, 36, of Gramercy Park, a daughter of Givens;

Laron Taylor, 34, of Buena Park, a son of Givens;

Latrice Taylor, 37, of Buena Park, a daughter of Givens;

Raschell Taylor, 30, of San Bernardino, a daughter of Givens;

Bianka Logie, 45, of Moreno Valley; and

Vernisha Jolivet, 27, of Indianapolis.

          Seven of the defendants are expected to be arraigned this afternoon in United States District Court. Jolivet was arrested in Indianapolis and will be making a court appearance in Indiana on Wednesday.

          From February 2013 until July 2016, the defendants allegedly registered fake businesses with the California Employment Development Department, the administrator of the federal unemployment insurance benefit program for the state. The names of the bogus companies included Latasha’s Devining Cleaning Service, Charm Boutique, and Infinite Cleaning Service, according to the indictment. Givens, Laron Taylor, and Raschell Taylor allegedly opened and maintained post office boxes responsible for receiving the fake businesses’ mail.

          Logie, Jolivet, and Evelyn Taylor filed claims for unemployment insurance in their own names, claiming unemployment from the fake businesses created by the co-conspirators, the indictment alleges. Other times, the conspirators allegedly filed unemployment insurance claims using the names of other people, including prison inmates.

          After being supplied California EDD-funded debit cards, the defendants allegedly withdrew funds from the cards that were in the name of other claimants. In total, the defendants fraudulently obtained approximately $1,106,282 in unemployment insurance benefits, according to the indictment.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          If convicted of all charges, each defendant would face a statutory maximum sentence of 22 years in federal prison.

          This matter was investigated by the United States Department of Labor, Office of Inspector General and California EDD Investigation Division, with assistance from the United States Postal Inspection Service and U.S. Marshals Service.

          This case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the International Narcotics, Money Laundering, and Racketeering Section.

          LOS ANGELES – An Orange County man who fled after authorities searched his residence on Wednesday is in federal custody today after he was arrested at the U.S.-Mexico border and charged with fraudulently obtaining more than $5 million in COVID-relief loans for three sham companies.

          Reddy Raghav Budamala, 35, of Irvine, was arrested at the border early Thursday morning by federal law enforcement and made his initial court appearance Thursday afternoon in the United States District Court in Los Angeles. At that hearing, a United States Magistrate Judge ordered Budamala held without bond because he posed a flight risk.

          A criminal complaint filed Thursday charges Budamala with one count of wire fraud.

          According to an affidavit filed with the complaint, Budamala in 2019 formed or acquired three shell companies with no operations – Hayventure LLC, Pioneer LLC, and XC International LLC. Following the outbreak of the COVID-19 pandemic, and the enactment of federal programs designed to address the economic fallout from the pandemic, Budamala allegedly submitted to the Small Business Administration (SBA) seven applications for pandemic-relief loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).

          As part of the applications filed from April 2020 through March 2021, Budamala falsely represented to the banks administering the COVID-relief business loan programs that his companies employed dozens of individuals and earned millions of dollars in revenue, and that he needed the money for payroll and business expenses, the affidavit alleges.

          The listed addresses for the companies were bogus, nonexistent or residential. The states where Budamala’s companies purportedly operated have no records of those companies paying wages to any employees, and bank records for the companies reflect no significant business income or operating expenses. During a February 2021 interview with a State Department official in an unsuccessful attempt to obtain a United States passport, Budamala said he wanted the passport so he could get a job, according to the affidavit.

          The SBA and the banks funded six of the loans and disbursed $5,151,497, the affidavit states. Budamala allegedly applied to have several of the loans forgiven and falsely represented that he had used the SBA money entirely for payroll.

          Once the loans were funded, Budamala used the money to pay for personal expenses, including the purchase of a $1.2 million investment property in Los Angeles, the purchase of a $597,585 property in Malibu, a $970,000 investment in an EB-5 Immigrant Investor Visa Program and a nearly $3 million deposit into Budamala’s personal TD Ameritrade account, according to the affidavit.

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

          If convicted of the charge, Budamala would face a statutory maximum sentence of 20 years in federal prison.

          IRS Criminal Investigation, the FBI, and the Small Business Administration’s Office of Inspector General investigated this matter.

          Assistant United States Attorney Gregory D. Bernstein of the Major Frauds Section is prosecuting this 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, among other methods, 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 https://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 (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

          LOS ANGELES – A urologist was sentenced today to 71 months in federal prison for submitting fraudulent billings totaling more than $700,000 to Medicare for medically unnecessary and nonexistent treatments, sometimes billing for purported patient visits miles apart and occurring at the exact same time.

          Mark Wilfred Tamarin, 65, of Manhattan Beach, was sentenced by United States District Judge Dale S. Fischer, who also ordered him to pay nearly $345,000 in restitution.

          After a seven-day trial in July 2019, a jury found Tamarin guilty of six counts of wire fraud and one count of attempted health care fraud. He has been in federal custody since the trial’s conclusion.

          According to the evidence presented at trial, from 1987 until 2014, Tamarin was a partner Advanced Urology Medical Offices (AUMO), which had offices in Torrance and West Los Angeles.

          From January 2009 until January 2013, at AUMO, where the majority of the patients were covered by Medicare, Tamarin billed Medicare for services he did not and could not have performed and also ordered medically unnecessary tests. Tamarin covered Kindred Hospital, a sub-acute medical center in Ladera Heights, for AUMO. Kindred is a facility designed for patients with serious medical problems and in need of long-term care, but for whom a traditional hospital setting is unnecessary. There, he billed for numerous patient visits that never happened and for services he never provided. The evidence presented at trial showed that on multiple occasions between 2009 and 2013, Tamarin purportedly was in two places miles apart at the same time he was treating patients in both locations.

          At his office at AUMO, Tamarin ordered medically unnecessary tests for his patients. In particular, he ordered two to three times the number of post-void residual (PVR) tests and renal ultrasounds for urology patients in comparison to his three medical partners. Tamarin ordered so many PVRs that the office’s medical assistants suggested that the office purchase a second PVR machine. Tamarin ordered these tests before speaking with or seeing a patient despite the fact that the tests themselves only were appropriate in limited medical circumstances.

          In total, Tamarin caused more than $700,000 in fraudulent claims to be billed to Medicare, of which Medicare paid approximately $219,934 in fraudulent Kindred claims and $124,802 in medically unnecessary PVR and renal ultrasound claims.

          This matter was investigated by the FBI and U.S. Department of Health and Human Services Office of Inspector General.

          This case was prosecuted by Assistant United States Attorney Poonam G. Kumar of the Major Frauds Section.

LOS ANGELES – A rideshare driver from the Koreatown neighborhood of Los Angeles has been arrested on a five-count federal indictment charging him with fraudulently obtaining more than $2 million in COVID-19 pandemic business-relief loans on behalf of his nonexistent companies, which he instead used to buy cryptocurrency, the Justice Department announced today.Bruce Choi, 34, was arrested Tuesday at San Francisco International Airport after arriving on a flight from Japan. He is charged with four counts of wire fraud affecting a financial institution and one count of transactional money laundering.He is expected to make his initial appearance today in United States District Court in San Francisco. He will be arraigned in Los Angeles federal court in the coming weeks.According to the indictment, which was returned in October 2025 and unsealed today, from May 2020 to December 2024, Choi schemed to defraud the U.S. Small Business Administration (SBA) and financial institutions out of government funds aimed to help businesses weather the COVID-19 pandemic’s economic fallout.Choi, representing himself as the CEO and owner of a business called “Premier Republic,” applied for a $1,995,000 Paycheck Protection Program (PPP) loan. In support of this application, Choi falsely claimed that Premier Republic had an average monthly payroll of $798,000, was in operation in mid-February 2020, and paid salaries and payroll taxes.In fact, Premier Republic was a fictional entity that neither had business operations nor hired anyone.To support his false claim that Premier Republic was a real business, Choi submitted to a lender several fraudulent documents, including a fake 2019 individual tax return that claimed his “company” received gross receipts of nearly $11.8 million in 2019 and that it made a gross profit of nearly $9.6 million that year. Choi also submitted a fake bank statement listing “deposits” and “transfers” of $798,000 during the fictitious period of February 1, 2020, through February 31, 2020.Further, Choi submitted a fraudulent Economic Injury Disaster Loan (EIDL) application through the SBA in which he falsely stated his business “Bruce” was involved in real estate, employed 10 people, and enjoyed gross revenues of $475 million in 2019. In fact, no such business existed.As a result of his scheme, the victim lender disbursed $1,995,000 to Choi and the U.S. Treasury disbursed a $10,000 EIDL advance. Choi later wired proceeds from his scheme to a Kraken cryptocurrency exchange account. Pursuant to a court-issued warrant, federal prosecutors have seized nearly 40 bitcoins and other cryptocurrency as part of the investigation. 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.If convicted, Choi would face a statutory maximum sentence of 30 years in federal prison for each wire fraud count and up to 10 years in federal prison on the money laundering count.IRS Criminal Investigation, the Federal Deposit Insurance Corporation Office of Inspector General, Homeland Security Investigations, the U.S. Treasury Inspector General for Tax Administration, and the SBA’s Office of Inspector General are investigating this matter.Assistant United States Attorney Tara B. Vavere of the Asset Forfeiture and Recovery Section and Assistant United States Attorney Alexander B. Schwab, Acting Chief of the Criminal Division, are prosecuting this case.

LOS ANGELES – A Hollywood man who admitted to seeking more than $65 million from the IRS by falsely claiming on tax returns that his nonexistent farming business was entitled to COVID-19-related tax credits was sentenced today to 57 months in federal prison.Kevin J. Gregory, 57, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay $2,769,173 in restitution.Gregory, who has been in federal custody since May 2023, pleaded guilty on January 17 to one count of making false claims to the IRS.In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit that a small business could use to reduce the employment tax it owed to the IRS, also known as the “employee retention credit.”To qualify, the business had to have been in operation in 2020 and to have experienced at least a partial suspension of its operations because of a government order related to COVID-19 (for example, an order limiting commerce, group meetings or travel) or a significant decline in profits. The credit was an amount equal to a set percentage of the wages that the business paid to its employees during the relevant time period, subject to a maximum amount.Congress also authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19. This “paid sick and family leave credit” was equal to the wages the business paid the employees during the sick or family leave, also subject to a maximum amount.From November 2020 to April 2022, Gregory made false claims to the IRS for the payment of nearly $65.3 million in tax refunds for a purported Beverly Hills-based farming-and-transportation company named Elijah USA Farm Holdings.The IRS issued a portion of the refunds Gregory claimed, and Gregory used a significant portion – more than $2.7 million – for personal expenses.Specifically, in January 2022, Gregory made a false claim to the IRS for the payment of a tax refund in the amount of $23,877,620, which he submitted as part of Elijah Farm’s quarterly federal tax return. Gregory claimed Elijah Farm employed 33 people, paid nearly $1.6 million in quarterly wages, had deposited nearly $18 million in federal taxes, and was entitled to nearly $6.5 million in COVID-relief tax credits.In fact, Gregory knew that Elijah Farm employed nobody and paid wages to no one and had not made federal tax deposits to the IRS in the amounts stated on his tax return.IRS Criminal Investigation investigated this matter.Assistant United States Attorney Kristen A. Williams of the Major Frauds Section prosecuted this case.On May 17, 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, among other methods, 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. More information on the Justice Department’s response to the pandemic may be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can report it to the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF online complaint form.

LOS ANGELES – A woman from the Mid-City area of Los Angeles pleaded guilty today to fraudulently obtaining more than $2 million in COVID-19 government loans and to submitting false claims in an unsuccessful effort to secure from the IRS nearly $1.3 million in pandemic-related tax credits.

Casie Hynes, 37, pleaded guilty to one count of wire fraud and one count of false claims.

According to her plea agreement, from June 2020 to December 2021, Hynes submitted more than 80 fraudulent applications for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) from banks and the United States Small Business Administration (SBA) in the names of approximately 20 companies. Congress designed these programs to provide government relief to businesses during the COVID-19 pandemic.

Hynes submitted the bogus applications in the names of both existing and newly created companies, including Nasty Womxn Project and She Suite Collective and others purportedly owned by Hynes or her friends and family members. On those applications, Hynes often used the personal information and signatures of other people without their authorization and even though those people were not involved with the companies. Hynes also provided false information on the applications, including as to the number of purported employees at the companies, the companies’ average monthly payroll, and who purportedly owned and controlled these sham businesses. Hynes also submitted fabricated tax documents and bank statements in support of the fraudulent PPP and EIDL applications.

In reliance on Hynes’ fraudulent loan applications, banks and the SBA approved PPP and EIDL loans for the various companies she created and then disbursed the COVID-relief funds into bank accounts she controlled and used to pay her own personal expenses.

Hynes admitted in her plea agreement that she intended to cause approximately $3,174,323 in losses and she received approximately $2,255,244 in fraudulent proceeds from this scheme.

In a related scheme, Hynes used some of the same companies named in her PPP and EIDL fraud to submit bogus tax forms to the IRS, requesting refunds. Following COVID-19’s outbreak, Congress enacted laws authorizing the IRS to reduce the employment tax burdens of small businesses and reimburse those businesses for wages paid to employees who were on sick or family leave and could not work because of the pandemic. During the tax years 2020 and 2021, the IRS offered the Employee Retention Credit and paid sick and family leave credit to businesses that were significantly impacted by COVID-19.

From May 2021 to April 2022, Hynes caused to be submitted 12 tax forms that sought refunds based on false statements on behalf of Nasty Womxn Project LLC, She Suite Ventures, and Casie Hynes Consulting. Hynes knew these companies had little to no business operations, did not have the number of employees she claimed, and did not pay the quarterly wages she claimed in the tax forms.

Hynes fraudulently sought approximately $1,255,703 in COVID-19 tax credits and tax refunds through these false claims, none of which the IRS paid.

United States District Judge Hernán D. Vera scheduled a January 30, 2025, sentencing hearing, at which time Hynes will face a statutory maximum sentence of 20 years in federal prison for the wire fraud count and up to five years in federal prison for the false claims count.

IRS Criminal Investigation investigated this matter.

Assistant United States Attorney Kristen A. Williams of the Major Frauds Section is prosecuting this case.

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.

          LOS ANGELES – A former California lawyer has agreed to plead guilty to a fraud charge, admitting he lied to clients about winning cases and deceiving them with bogus documents, some with the forged signatures of judges.

          Matthew Charles Elstein, 51, of Redondo Beach, agreed to plead guilty to one count of wire fraud in a plea agreement filed this afternoon in United States District Court. An arraignment in this case is scheduled for October 28.

          Elstein was a licensed California attorney from December 1994 until the State Bar of California ordered him inactive in March 2019. According to his plea agreement, from June 2015 to July 2018, Elstein engaged in a scheme to defraud his clients by claiming he obtained favorable legal resolutions for them, when in fact the favorable resolutions had never been obtained. In many cases, Elstein never initiated any legal action. Elstein also admitted to misappropriating funds by informing victims their fees were going into his client trust account, when in fact he directed them to deposit money into his personal bank account.

          For example, in June 2016, Elstein falsely informed a corporate client that it had won a $52 million default judgment. He emailed the victim-client a fake court order that contained a judge’s forged signature. Having never actually filed a lawsuit on his client’s behalf, Elstein further misrepresented that the case was improperly under seal due to a United States Department of Justice investigation. To further his fraudulent scheme, Elstein presented his clients with a fake settlement agreement between the client and the United States Attorney’s Office for the Eastern District of California. It was not until the company reached out to that United States Attorney’s Office to authenticate the settlement agreement that it discovered that the agreement was a forgery.

          Elstein also admitted to fabricating depositions in a federal case in Washington state in September 2015. Because these depositions were fake, no one appeared for them. Nonetheless, Elstein had a court stenographer present and made a formal record of the nonappearances. Elstein also billed the client for attending the fake depositions and his travel expenses to Seattle.

          Elstein also falsely told the victim that he had obtained a $4.25 million judgment in the victim’s favor and provided the victim with a fake court order containing the forged signature of a judge. When the victim traveled to Seattle to collect the judgment, he was informed by the court that no such case existed.

          In total, Elstein’s conduct resulted in losses of at least $358,855 to his victims.

          Upon entering his guilty plea in this case, Elstein will face a statutory maximum sentence of 20 years in federal prison.

          The FBI investigated this matter.

          Assistant United States Attorney Agustín D. Orozco of the Public Corruption and Civil Rights Section is prosecuting this case.

LOS ANGELES – A Burbank man has pleaded guilty to evading the payment of more than $11.2 million in federal taxes by using a shill to illegally collect Medicare reimbursement payments made to his blood-testing company, and to fraudulently obtaining nearly $100,000 in taxpayer-funded COVID-19 business relief, the Justice Department announced today.Armen Muradyan, 60, pleaded guilty Thursday to one count of conspiracy to commit health care fraud, one count of wire fraud, and one count of tax evasion.According to his plea agreement, Muradyan owned and operated a Burbank-based blood testing laboratory called Genex Laboratories Inc. Medicare and bank records show that Medicare paid millions of dollars in reimbursements to Genex for blood testing. The reimbursements were wired to bank accounts in the name of an individual identified in court documents as “L.S.” – Muradyan’s long-time friend to whom Muradyan had offered to pay $2,000 per month to pretend to be Genex’s owner.Muradyan told L.S. that he needed him to submit Medicare enrollment papers to Medicare on Genex’s behalf because Medicare had banned Muradyan from submitting claims.L.S. and Muradyan opened bank accounts for Genex in L.S.’s name, but which Muradyan controlled. L.S. neither owned nor operated Genex and visited the company’s Burbank office to collect his $2,000 monthly payment and to sometimes sign documents at Muradyan’s direction. Muradyan used the proceeds from the health care fraud conspiracy to pay the mortgage on a property he owned.For the tax years of 2015 through 2020, Muradyan instructed L.S. to report Genex’s financial activity on L.S.’s personal income tax returns using documents that L.S. provided to his own tax preparer. The documents purportedly showed that Genex had minimal net profit or was operating at a loss, meaning the company had little or no income tax liability.For the same period, Muradyan submitted income tax returns that reported none of Genex’s financial activity as his own and that he averaged an income of $40,000 per year. In fact, Muradyan personally received and used millions of dollars in Medicare reimbursements to support his own expensive lifestyle.Muradyan also did not file tax returns for the years 2021 through 2023. In total, Muradyan’s unreported federal taxable income was approximately $23,915,762, resulting in a total federal income tax due and owing by him of approximately $11,236,357. In July 2020, Muradyan wired a false and fraudulent application for an Economic Injury Disaster Loan (EIDL) that was funded by federal taxpayers. On the application, Muradyan falsely stated that GenMed employed multiple people and generated $800,000 in income for the year 2019. In fact, Muradyan knew GenMed employed no one and generated zero income for that year. The U.S. Small Business Administration (SBA) wired $99,900 to a bank account Muradyan controlled. He then used the money for personal expenses not permitted under the terms of the EIDL. Muradyan admitted he acted with the intent to deceive and cheat the SBA.United States District Judge John A. Kronstadt scheduled a December 11 sentencing hearing, at which time Muradyan will face a statutory maximum sentence of 20 years in federal prison for the wire fraud count, up to 10 years in federal prison for the health care fraud conspiracy count, and up to five years in federal prison for the tax evasion count. Muradyan remains free on $2.6 million bond.IRS Criminal Investigation, the FBI, and the United States Department of Health and Human Services Office of Inspector General investigated this matter.Assistant United States Attorney Mark Aveis of the Major Frauds Section and Trial Attorney Mahana K. Weidler of the Department of Justice’s Tax Division are prosecuting this case. 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. 

          LOS ANGELES – A Santa Clarita resident who invested in real estate and sold “coupon bonds” that promised regular interest payments on top of principal repayment has agreed to plead guilty to a federal criminal charge for defrauding investors out of more than $1.7 million, the Justice Department announced today.

          Matthew Skinner, 45, who in 2014 founded a company called Empire West Equity, Inc. and later established Simple Growth, LLC, was charged today with securities fraud in a one-count information filed in United States District Court.

          Federal prosecutors today also filed a plea agreement in which Skinner agreed to plead guilty to the offense and admitted he fraudulently sold securities.

          Skinner used social media platforms such as Facebook and YouTube to promote himself, falsely claiming to be an experienced and successful real estate investor with more than $200 million in deals under his belt, according to court documents.

          After Empire West experienced financial troubles – Skinner was unable to pay his staff and investors – he established Simple Growth in 2018 and falsely told investors who purchased Simple Growth coupon bonds “that their money would be used to purchase real estate that [Skinner] and Empire West would develop and resell at a profit,” according to the plea agreement.

          Skinner admitted that he did not intend to purchase, develop or resell real estate, and that he instead used investor funds to pay older investors, his employees and himself.

          Skinner “used investor funds from those entities and accounts to pay for personal trips, his mortgage, his utility bills, cosmetic surgery, and alimony payments to his ex-wife,” he acknowledged in the plea agreement.

          Simple Growth raised approximately $1,744,946 from more than 20 investors – none of whom received any of their money back.

          The securities fraud charge against Skinner carries a statutory maximum penalty of 20 years in federal prison.

          Skinner has agreed to surrender to federal authorities and make his initial court appearance on May 25.

          The FBI conducted the investigation into Skinner.

          Assistant United States Attorney Jeff Mitchell of the Major Frauds Section is prosecuting this case.

LOS ANGELES – An Orange County man was sentenced today to 54 months in federal prison for fraudulently obtaining $5 million in COVID-relief loans for his sham businesses, then used the money on himself, including purchasing Ferrari, Bentley and Lamborghini cars.

Mustafa Qadiri, 42, of Irvine, was sentenced by United States District Judge Josephine L. Staton, who also fined him $20,000 and ordered him to pay $2,861,050 in restitution.

Qadiri pleaded guilty in July 2021 to one count of bank fraud, one count of aggravated identity theft, and one count of money laundering.

According to court documents, Qadiri claimed to have operated four Newport Beach-based companies, none of which were in operation: All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc.

In May and June of 2020, Qadiri submitted false and fraudulent Paycheck Protection Program (PPP) loan applications to three banks on behalf of those companies. The false information Qadiri submitted included the number of employees to whom the companies paid wages, altered bank account records with inflated balances, and fictitious quarterly federal tax return forms. Qadiri also used someone else’s name, Social Security number and signature to fraudulently apply for one of the loans.

PPP loans were intended by Congress to provided financial support to businesses suffering under the weight of the COVID-19 pandemic’s economic fallout.

Relying on this false information, the banks funded the PPP loan applications and transferred approximately $5 million to accounts Qadiri controlled. Qadiri used the fraudulently obtained PPP loan proceeds for his own personal benefit, including for expenses prohibited under the requirements of the PPP program, such as the purchase of luxury vehicles, lavish vacations, and the payment of his personal expenses.

Federal agents seized the Ferrari, Bentley and Lamborghini cars that Qadiri purchased with the fraudulently obtained PPP loans, along with $2 million in ill-gotten gains from his bank account.

Homeland Security Investigations, the Small Business Administration Office of Inspector General, the FBI and IRS Criminal Investigation investigated this matter as part of the El Camino Real Financial Crimes Task Force.

Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office prosecuted this case.

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.

LOS ANGELES – A San Bernardino County man was arrested today on a federal criminal complaint alleging that he fraudulently obtained more than $800,000 in taxpayer funded COVID-19 relief funds by concealing his recent federal mail fraud conviction.Justin Konikow, 38, of Ontario, is charged with wire fraud. He is expected to make his initial appearance this afternoon in U.S. District Court in downtown Los Angeles. According to an affidavit filed with the complaint, in April 2020 Konikow applied for an Economic Injury Disaster Loan (EIDL), a program which provided low-interest funding to small businesses affected by the COVID-19 pandemic. The application was submitted on behalf of an entity called “Trendsetters” and listed Konikow as its sole owner.The April 2020 application contained representations that neither Konikow nor the business had ever been criminally charged or convicted of a crime. In fact, Konikow had been convicted in January 2020 of mail fraud in Los Angeles federal court for scheming to defraud the United States, the State of California and its Employment Development Department out of more than $250,000 by filing false unemployment and disability insurance claims using synthetic identities and fake companies. Konikow was sentenced in January 2021 to 35 months’ imprisonment and began serving his sentence in February 2022. The affidavit alleges that between 2021 and 2022, three EIDL modifications to increase the total proceeds were submitted, each identifying Konikow as Trendsetter’s sole owner. Each application contained a certification that all representations in the loan application (including in the original application) were true, correct, and complete, under penalty of perjury. None of the modification applications provided any information that Konikow was a convicted criminal.The Small Business Administration (SBA) approved the EIDL and each modification application and wired the loan proceeds totaling approximately $805,000 into Konikow’s bank account. Konikow then quickly wired substantial amounts of the COVID funds out of his bank account to pay off his credit card debt, car payments, and a transfer of approximately $47,000 to his Robinhood stock trading account.A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.If convicted, Konikow would face a statutory maximum sentence of 20 years in federal prison.The SBA Office of Inspector General is investigating this matter.Assistant United States Attorney Gregg Marmaro of the Major Frauds Section is prosecuting this case.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. 

LOS ANGELES – Three Los Angeles County residents were found guilty by a jury today of scheming to launder the proceeds of scams targeting older adults and other victims who were conned into buying Target gift cards, supposedly to resolve various financial problems.

At the conclusion of a 10-day trial, a jury convicted the three defendants – Blade Bai, 35, of El Monte; Bowen Hu, 28, of Hacienda Heights; and Tairan Shi, 29, of Diamond Bar – of one count of conspiracy to commit money laundering. The jury also found Bai guilty of an additional charge of conspiring to commit money laundering, an offense he committed after being freed on bond in the initial case.

Hu and Shi were remanded into custody immediately after today’s verdict, and Bai has been in custody since February 2022

According to evidence presented at trial, telephone scammers based overseas lied to victims to persuade them to buy one or more Target gift cards to fix nonexistent problems. Some victims received calls from fraudsters posing as law enforcement officers or government employees, who claimed the victims’ identities had been stolen or warrants had been issued for the victims’ arrest, and that money in the form of Target gift cards was necessary to remedy the problems.

Other victims were tricked into responding to tech support emails that purported to be from well-known companies and claimed there were serious problems relating to the victims’ financial accounts that could only be resolved by paying money in the form of Target gift cards.

As a result of the scammers’ lies and misrepresentations, the victims were convinced to buy Target gift cards – often more than one – typically in increments of $500 and to read the card numbers and access codes over the phone to the scam artists.

Bai, Hu and Shi obtained more than 5,000 gift cards from a group of unknown persons in China that called itself the “Magic Lamp” and sold gift card information via the online messenging application WeChat.

The defendants used WeChat to coordinate the distribution of gift cards to “runners,” who used the gift cards at Target stores primarily in Los Angeles and Orange counties to purchase consumer electronics, other gift cards and other items, according to court documents. Through the purchases and other transactions at multiple Target stores, the defendants and their co-conspirators sought to conceal the fact that the gift cards had been originally funded with fraudulent proceeds.

Prosecutors estimate that the defendants laundered more than $2.5 million in gift cards between approximately June 2019 and November 2020.

Bai was arrested on a criminal complaint in this matter in November 2020 and was released on bond. Within days of his release from federal custody, Bai engaged in another money laundering conspiracy involving Target gift cards. Bai offered to introduce an associate to someone who bought merchandise from him, and thereafter asked the associate to help him liquidate approximately $36,000 of Target gift cards. With Bai unwilling to be paid directly for the sale, two accomplices together arranged a deal in which they sold, to the customer, Bai’s gift cards for approximately 90 cents on the dollar.

Law enforcement arrested Bai again in February 2022 on a superseding indictment and he has remained in federal custody since that time.

United States District Judge André Birotte Jr. scheduled a January 26, 2024, sentencing hearing, at which time Bai, Hu and Shi will face a statutory maximum sentence of 20 years in federal prison for each money laundering conspiracy count.

Yan Fu, 60, of Chino Hills, pleaded guilty in September 2022 to one count of conspiracy to commit money laundering. Fu, who was one of the “runners” in this conspiracy, is serving a 20 month-sentence in federal prison. Judge Birotte also ordered Fu to pay $48,073 in restitution.

This case is the product of an investigation by Homeland Security Investigations (HSI) and the FBI. The investigation was conducted under the auspice of HSI Los Angeles’ El Camino Real Financial Crimes Task Force, a multi-agency task force comprised of federal and state investigators focused on financial crimes in Southern California.

The Social Security Administration’s Office of the Inspector General provided substantial assistance during the investigation, as did the following law enforcement agencies: the Brea Police Department; the La Palma Police Department; the Menifee Police Department; the Glynn County (Georgia) Police Department; the Fontana Police Department; the Charlotte-Mecklenburg (North Carolina) Police Department; the Streamwood (Illinois) Police Department; the Cleveland Police Department; the Madera County Sheriff's Office; the New York Police Department; the Norwood (New Jersey) Police Department; the Loudon County (Virginia) Sheriff's Office; the Waukesha County (Wisconsin) Sheriff's Department; the Fremont Police Department; the Marin County Sheriff's Office; the County of Hawaii Police Department; the Henderson (Nevada) Police Department; the Wilmington (Massachusetts) Police Department; the Las Vegas Metropolitan Police Department; the Lewisville (Texas) Police Department; the Gardena Police Department; the Des Moines Police Department; the Cobb County (Georgia) Sheriff`s Department; the Millburn (New Jersey) Police; the Wauwatosa (Wisconsin) Police Department; the San Angelo (Texas) Police Department; the Fairfax City (Virginia) Police Department; and the Virginia Beach Police Department.

Assistant United States Attorney Monica E. Tait of the Major Frauds Section and Justice Department Trial Attorneys Wei Xiang and Meredith Healy of the Civil Division’s Consumer Protection Branch are prosecuting the case.

The United States Attorney’s Office and the Consumer Protection Branch are part of the Transnational Elder Fraud Strike Force, which investigates and prosecutes scams targeting older adults and are run by transnational criminal organizations. These scams include mass mailing, telemarketing, and tech support scams.

If you fall victim to a gift card scam, immediately call the gift card issuer and ask them to freeze the gift card numbers involved – and save your receipt and the gift card.  Then, report the crime to the FBI’s Internet Crime Complaint Center at www.ic3.gov,  the Federal Trade Commission at https://reportfraud.ftc.gov/#/ or (877) 382-4357, and your local police department.

          SANTA ANA, California – An Orange County man was arrested today on federal charges alleging he fraudulently obtained approximately $5 million in Payment Protection Program (PPP) loans for his sham businesses, then used the money on himself, including purchasing Ferrari, Bentley and Lamborghini sports cars.

          Mustafa Qadiri, 38, of Irvine, was named in a federal grand jury indictment returned Wednesday charging him with four counts of bank fraud, four counts of wire fraud, one count of aggravated identity theft, and six counts of money laundering.

          Qadiri surrendered to law enforcement this morning and is expected to make his initial appearance this afternoon in United States District Court in Santa Ana.

          According to the indictment, Qadiri claimed to have operated four Newport Beach-based companies, none of which are currently in operation: All American Lending, Inc., All American Capital Holdings, Inc., RadMediaLab, Inc., and Ad Blot, Inc.

          In May and June of 2020, Qadiri allegedly submitted false and fraudulent PPP loan applications to three banks on behalf of those companies. The false information allegedly included the number of employees to whom the companies paid wages, altered bank account records with inflated balances, and fictitious quarterly federal tax return forms. Qadiri allegedly also used someone else’s name, Social Security number and signature to fraudulently apply for one of the loans.

          Relying on this false information, the banks funded the PPP loan applications and transferred approximately $5 million to accounts Qadiri controlled, according to the indictment. Qadiri allegedly used the fraudulently obtained PPP loan proceeds for his own personal benefit, including for expenses prohibited under the requirements of the PPP program, such as the purchase of luxury vehicles, lavish vacations, and the payment of his personal expenses.

          Federal agents have seized the Ferrari, Bentley and Lamborghini cars that Qadiri allegedly purchased with the fraudulently obtained PPP loans, along with $2 million in alleged ill-gotten gains from his bank account.

          The Coronavirus Aid, Relief, and Economic Security (CARES) Act was 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, Congress authorized more than $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 1 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.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          Homeland Security Investigations, the Small Business Administration Office of Inspector General, the FBI and IRS Criminal Investigation investigated this matter as part of the El Camino Real Financial Crimes Task Force.

          Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office is prosecuting this case.

ATLANTA – Todd Burkhalter, the founder and chief executive officer of the Georgia-based financial advisory group Drive Planning LLC, has pleaded guilty to wire fraud for masterminding a years-long Ponzi scheme that allowed him to live a lavish lifestyle while causing thousands of investors to lose hundreds of millions of dollars.“Todd Burkhalter perpetrated what is likely the largest Ponzi scheme in Georgia history,” said U.S. Attorney Theodore S. Hertzberg. “Unbelievably, Burkhalter shamelessly continued to scam his victims even while under federal investigation. Today’s guilty plea is just the first step in holding Burkhalter accountable for the considerable harm he caused.”“Todd Burkhalter built a massive Ponzi scheme on lies, exploiting trust to steal hundreds of millions of dollars from more than 2,000 victims while funding an extravagant lifestyle,” said Paul Brown, Special Agent in Charge of FBI Atlanta. “The FBI will continue to aggressively pursue those who weaponize fraud and deception against investors, and we are committed to holding them fully accountable and seeking justice for every victim harmed.”According to U.S. Attorney Hertzberg, the charges, and other information presented in court: between September 2020 and June 2024, Drive Planning, at Burkhalter’s direction, marketed several investment opportunities, including the “Real Estate Acceleration Loan” opportunity (“REAL”) and the “Cash Out Real Estate Fund” (“CORE Fund”). Drive Planning claimed that investing in REAL and the CORE Fund was “easy and simple,” telling prospective investors that they did not need to be accredited investors to participate and encouraging them to invest money from retirement accounts, savings, and lines of credit.REAL was Drive Planning’s primary investment vehicle, which Burkhalter fraudulently marketed as a bridge loan opportunity that would guarantee investors a 10% return every three months. Drive Planning claimed that it offered short-term loans—the bridge loans—to real estate developers who needed immediate cash flow to complete existing projects or fund new ones. Burkhalter and Drive Planning deceived investors into believing their investments were safe by claiming that they were fully collateralized by real estate. To perpetuate these lies, Burkhalter directed Drive Planning to prepare fraudulent “collateral sheets” identifying properties—some of which did not even exist—with fictitious valuations that purportedly served as collateral for investments.Burkhalter and Drive Planning also falsely represented the extent of its relationship with real estate developers. In particular, Drive Planning highlighted its supposed relationship with a well-known real estate developer in Atlanta, Georgia (“Real Estate Developer-1”). In promissory notes with investors, Drive Planning falsely claimed investments were secured by real property within Real Estate Developer-1’s portfolio of properties. Eventually, Real Estate Developer-1 became aware that Drive Planning and Burkhalter were fraudulently using its name to promote the REAL investment. Real Estate Developer-1 sued Drive Planning and Burkhalter seeking to enjoin them from further using Real Estate Developer-1’s name. For the CORE Fund, Drive Planning falsely claimed that it provided “100% Passive Income from Tax Liens.” Drive Planning guaranteed investors a return of 10% every six months or a 22% return per year for up to three years. Drive Planning further misrepresented that investors’ contributions to the CORE Fund were pooled together, government-protected, and fully collateralized. Additionally, Burkhalter and others at Drive Planning failed to disclose that Drive Planning did not invest any funds in the CORE Fund after approximately December 9, 2022. In total, Drive Planning received at least $4.1 million from individuals who sought to invest in the CORE Fund.Burkhalter operated REAL as a Ponzi-scheme from its inception. In September 2020, after Drive Planning received its first $50,000 investment in REAL, Burkhalter used at least $21,000 to repay an earlier Drive Planning investor. None of the REAL funds were used for their supposed intended purpose—to finance bridge loans or enter joint ventures with real estate developers. Instead, within the first couple of months of marketing REAL, Burkhalter used at least $80,000 in investor money to pay his ex-wife’s attorneys and expenses related to recreational vehicles.Throughout the scheme, investors’ monies were used to pay off other Drive Planning investors, make commission payments to Drive Planning’s agents, and pay for personal expenditures. For example, Burkhalter spent approximately:$2 million to purchase a yacht;$2.1 million as part of a purchase of a luxury condo in Cabo San Lucas, Mexico;$800,000 on multiple luxury vehicles, including a 2020 Prevost Marathon motorcoach and two 2024 Land Rovers;Millions of dollars on luxury travel, including chartering private jets; and$320,000 on clothing, jewelry, and beauty treatments. Even after the Securities and Exchange Commission (“SEC”) began investigating Drive Planning in approximately March 2024, Burkhalter and others continued to solicit tens of millions of dollars in investments for REAL and the CORE Fund. Over the course of the scheme, Burkhalter defrauded more than 2,000 investors out of approximately $380 million.  In August 2024, the SEC obtained a temporary restraining order against Drive Planning and filed civil enforcement actions in federal court against Drive Planning and others related to the above-described scheme. Court-appointed receiver Kenneth D. Murena is responsible for attempting to recover funds and sell assets to repay Drive Planning’s many victims.Sentencing for Todd Burkhalter, 54, of St. Petersburg, Florida, will be scheduled at a later date before U.S. District Judge Tiffany R. Johnson. Pursuant to a plea agreement, the government has conditionally promised to recommend that the Court sentence Burkhalter to 17 and a half years of imprisonment. The Court is not bound by the government’s recommendation, and, in determining the actual sentence, it will consider the United States Sentencing Guidelines, among other factors.David Bradford, the former chief operating officer of Drive Planning, pleaded guilty to conspiracy to commit wire fraud on December 16, 2025, based on his involvement in the CORE Fund scheme. His sentencing hearing is scheduled for March 17, 2026 at 11:00 a.m. before Judge Johnson.This case is being investigated by the Federal Bureau of Investigation with substantial assistance from the Securities and Exchange Commission.Assistant U.S. Attorney Alex R. Sistla is prosecuting the case.For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

LOS ANGELES – An El Monte man and two Chinese nationals living elsewhere in Los Angeles County were sentenced today to terms in federal prison for laundering gift cards purchased by telephone-scam fraud victims at Target stores across the United States.

Blade Bai, 35, of El Monte; Bowen Hu, 28, of Hacienda Heights; and Tairan Shi, 29, of Diamond Bar; were sentenced to terms of 15 years, 10 years, and eight years in federal prison, respectively.

United States District Judge André Birotte Jr. also ordered the defendants to pay restitution in the amounts of $97,815 for Bai, $57,156 for Hu, and $39,416 for Shi.

Bai has been in federal custody since February 2022. Hu and Shi were remanded into custody after the guilty verdicts against them were read in September 2023.



“These defendants were part of a sophisticated, transnational fraud operation that targeted mostly older adults to cheat them out of their savings,” said United States Attorney Martin Estrada of the Central District of California. “Protecting our most vulnerable community members is critically important, and we will hold accountable those who reach into our country to engage in these sorts of egregious fraud schemes.”



The defendants were part of a network of individuals who laundered proceeds of fraud stored on Target gift cards. Telephone scammers fraudulently induced victims across the country to buy gift cards, often $500 each, and to provide the card numbers and access codes to the scammers. The scammers included government imposters falsely claiming to be police and other government personnel and retail and tech support impersonators falsely offering to fix nonexistent issues with the victims’ online account or computer.

The defendants acquired more than 5,000 gift card numbers and access codes from a group in the People’s Republic of China calling itself the “Magic Lamp,” and funneled the gift cards to “runners” to liquidate at Target stores in Southern California.  Those runners, at the defendants’ direction, would quickly use the cards to purchase high-value consumer electronics and conduct other transactions. The rapid transactions prevented victims from recouping the value on the cards when they contacted Target to report the scam.

At the conclusion of a 10-day trial in September 2023, a jury found the defendants guilty of a money laundering conspiracy that spanned from approximately June 2019 to November 2020. The jury also found Bai guilty of a second money laundering conspiracy, in which he enlisted an associate to help sell a batch of gift cards with fraudulent proceeds after his initial arrest in the case. One of the defendants’ main “runners,” Yan Fu, 61, of Chino Hills, pled guilty and was previously sentenced to 20 months in federal prison.

“Transnational fraud schemes typically rely on complicated networks designed to launder victim proceeds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This case is a testament to the commitment of the department and our partners to ensuring that all those who knowingly facilitate fraud face justice.”

“The FBI and its partners are committed to going after networks that perpetuate fraud even when they are targeting the American people from thousands of miles away and over the phone,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response and Services Branch. “Today’s sentencing should make it known to individuals that participate in this sort of illegal activity that they can expect to face the consequences of their actions.”

“HSI Los Angeles’ El Camino Real Financial Crimes Task Force will continue to aggressively target greedy criminals and organizations that seek to line their pockets by defrauding unsuspecting victims,” said Special Agent in Charge Eddy Wang for HSI Los Angeles. “The defendants’ desire for easy money will lead to them doing hard time.”

The Los Angeles Field Offices of Homeland Security Investigations and the FBI investigated the case, with assistance from the Social Security Administration’s Office of the Inspector General and numerous local police departments across the United States, including the Brea Police Department, the La Palma Police Department, and the Menifee Police Department.

Assistant United States Attorney Monica E. Tait of the Major Frauds Section and Trial Attorneys Wei Xiang and Meredith B. Healy of the Justice Department’s Consumer Protection Branch prosecuted the case.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 7 a.m. to 3 p.m. PT. English, Spanish and other languages are available.

More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at https://reportfraud.ftc.gov/ or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.

          LOS ANGELES – An Oklahoma man who grew up in Los Angeles was arrested today on a federal criminal complaint alleging that he telephoned bomb threats to five Los Angeles schools, including two elementary schools, and also threatened to shoot the children as they exited one of the elementary schools.

          Marcus James Buchanan, 44, of Blackwell, Oklahoma, is expected to make his initial appearance this afternoon in United States District Court in Wichita, Kansas.

          Buchanan is charged with one count of making a threat through interstate commerce to damage or destroy buildings by fire or explosives.

          According to an affidavit filed with the complaint, during a period of less than two hours on the morning of February 28, Buchanan called in bomb threats to two elementary schools, two middle schools, and a high school in Los Angeles. In a call to one of the elementary schools, Buchanan allegedly threatened to shoot the children as they exited the building.

          On April 27 and 28, Buchanan allegedly called in additional bomb threats to two of the Los Angeles schools he previously threatened, and threatened to shoot and kill children at other schools. On the afternoon of April 27, Buchanan called an elementary school and said to a school employee, “There is a bomb at your school and we will shoot the kids when they get out of the school. That is what you get for not accepting me in ’86,” according to the affidavit. When the employee asked who was calling, Buchanan allegedly responded, “If you try to find out, I will shoot you.” After receiving the threat, the school staff notified police and placed the school on lockdown. Police searched the campus for explosives or unusual items but found none.

          On April 28, Buchanan allegedly called the same school again and said there was a pipe bomb placed at the school’s address. After receiving the bomb threat, the school staff notified police and placed the school on lockdown. Police searched the campus for explosives or unusual items but found none.

          That same day, Buchanan allegedly called a different elementary school and said, “Stop playing games you know who this is. I am going to shoot the school. I know the kids are there.” Afterwards, the school was placed on lockdown, but – as with all the incidents – no explosives or unusual items were found.

          Phone records indicated that the threatening calls came from a number identified with Buchanan, the affidavit states.

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

          If convicted, Buchanan would face a statutory maximum sentence of 10 years in federal prison.

          The FBI and the Los Angeles School Police Department investigated this matter.

          Assistant United States Attorney Morgan J. Cohen of the General Crimes Section is prosecuting this case.

RIVERSIDE, California – A former detective with the Murrieta Police Department pleaded guilty today to a federal criminal charge for soliciting bribes from a Colombian art dealer who was seeking immigration benefits in the United States.

Paul John Gollogly, 74, of Temecula, pleaded guilty to one count of bribery.

According to his plea agreement, Gollogly began working for the Murrieta Police Department (MPD) in March 2013 to lead its purported anti-money laundering program. In this role, he handled and directed confidential informants (CI) registered with the department, including non-U.S. citizens who needed authorization from the U.S. government to enter and work in the United States.

In April 2013, Gollogly registered an individual – identified in court documents as “Person A” – as a CI with MPD. Person A was a Colombian national and a wealthy art dealer who had significant business interests in Colombia, the United States, Mexico, Panama, and Spain. Person A owned art galleries in New York and Spain, as well as a hotel in Mexico.

While previously employed at a police department in Florida, Gollogly had registered Person A as a CI with that police department. Person A was neither a U.S. citizen nor had legal permanent resident status, commonly known as holding a “green card.”

From April 2013 to February 2020, Gollogly helped Person A obtain various immigration benefits, including authorization from the U.S. Department of Homeland Security (DHS) to allow Person A to enter and work in the United States for one year at a time and facilitation of Person A’s physical entry into the United States. Gollogly also attempted to assist with Person A’s permanent residency application.

Gollogly wrote letters of support to DHS for Person A’s approvals to enter the United States, falsely stating that Person A’s work as a CI resulted in arrests, seizures of large amounts of money and drugs, and additional investigations. In fact, the information Person A provided MPD resulted in none of these things.

Also, on at least 25 occasions, Person A texted Gollogly to inform him of Person A’s arrival in the United States, including Person A’s arrival date and location, and flight information in case Person A got held up at a port of entry by immigration authorities. On at least five occasions, after receiving notice of Person A’s arrival at the San Ysidro Port of Entry at the U.S.-Mexico border, Gollogly personally drove to San Ysidro to meet Person A and facilitate Person A’s incident-free reentry into the United States.

In exchange for this help with immigration authorities, Gollogly solicited and received benefits from Person A, including:



receiving tickets to art shows in New York and Miami;

the hiring of a Gollogly family friend to work at one of Person A’s businesses and making efforts to help a Gollogly relative secure a job with a major philanthropist, whom Person A knew personally;

arranging for hotel stays for two close Gollogly relatives and another Gollogly friend at Person A’s hotel in Mexico, including one July 2014 stay in which – at Gollogly’s request – Person A had wine and flowers inside the hotel room of one of the close relatives;

paying four months’ rent in 2018 and 2019 for a Gollogly relative who was living in New York City; and

paying for dinner at an upscale New York restaurant for Gollogly and four of his relatives in December 2019.



United States District Judge Sunshine S. Sykes scheduled a January 19, 2024 sentencing hearing, at which time Gollogly will face a statutory maximum sentence of 10 years in federal prison. Prosecutors have agreed to seek no more than 18 months’ imprisonment for Gollogly.

The FBI investigated this matter, with assistance from the U.S. Immigration and Customs Enforcement, Office of Professional Responsibility.

Assistant United States Attorneys Julius J. Nam of the Public Corruption and Civil Rights Section and Courtney N. Williams of the Riverside Branch Office are prosecuting this case.

LOS ANGELES – A licensed physician and an alleged San Fernando Valley drug dealer were arrested today in connection with the death of actor Matthew Perry, who suffered a fatal ketamine overdose in October 2023.

In total, five defendants, including two doctors, have been charged in this matter, according to court documents unsealed today.

The defendants arrested today are charged in an 18-count superseding indictment returned on Wednesday with distributing ketamine to Perry during the final weeks of the actor’s life:



Jasveen Sangha, 41, a.k.a. “The Ketamine Queen,” of North Hollywood; and

Dr. Salvador Plasencia, 42, a.k.a. “Dr. P,” of Santa Monica.



Sangha and Plasencia are charged with one count of conspiracy to distribute ketamine. Sangha also is charged with one count of maintaining a drug-involved premises, one count of possession with intent to distribute methamphetamine, one count of possession with intent to distribute ketamine, and five counts of distribution of ketamine.

The superseding indictment alleges that Sangha’s distribution of ketamine on October 24, 2023, caused Perry’s death. Plasencia is charged with seven counts of distribution of ketamine and two counts of altering and falsifying documents or records related to the federal investigation.

Sangha and Plasencia are expected to be arraigned later today at United States District Court in downtown Los Angeles.

“These defendants cared more about profiting off of Mr. Perry than caring for his well-being,” said United States Attorney Martin Estrada. “Drug dealers selling dangerous substances are gambling with other people’s lives over greed. This case, along with our many other prosecutions of drug-dealers who cause death, send a clear message that we will hold drug-dealers accountable for the deaths they cause.”

“Bringing these individuals to justice for their role in the untimely death of Mr. Perry required coordination and hard work by a number of people, and I want to thank LAPD detectives and our federal partners for their patience and dedication,” said LAPD Chief Dominic Choi. “As the boots on the ground in our communities, on a daily basis LAPD officers witness first-hand the harm that these narcotics can cause, so I’m pleased that our collective efforts have led to the arrest of these individuals.”

“Today we announce charges brought against the five individuals who, together, are responsible for the death of Matthew Perry,” said DEA Administrator Anne Milgram. “We allege each of the defendants played a key role in his death by falsely prescribing, selling, or injecting the ketamine that caused Matthew Perry’s tragic death. Matthew Perry’s journey began with unscrupulous doctors who abused their position of trust because they saw him as a payday, to street dealers who gave him ketamine in unmarked vials. Every day, the DEA works tirelessly with our federal, state, and local partners to protect the public and to hold accountable those that distribute deadly and dangerous drugs – whether they are local drug traffickers or doctors who violate their sworn oath to care for patients.”

The three other defendants – charged separately – are:



Erik Fleming, 54, of Hawthorne, who pleaded guilty on August 8 to one count of conspiracy to distribute ketamine and one count of distribution of ketamine resulting in death. Fleming admitted in court documents that he distributed the ketamine that killed Perry. He further admitted to obtaining the ketamine from his source, Sangha, and to distributing 50 vials of ketamine to Perry’s live-in personal assistant, Kenneth Iwamasa – half of them four days before Perry’s death.

Kenneth Iwamasa, 59, of Toluca Lake, who conspired with Sangha, Fleming, and Plasencia to illegally obtain ketamine and distribute it to Perry. Iwamasa, who pleaded guilty on August 7 to one count of conspiracy to distribute ketamine causing death, admitted to repeatedly injecting Perry with ketamine without medical training, including performing multiple injections on Perry on October 28, 2023 – the day Perry died.

Dr. Mark Chavez, 54, of San Diego, a physician who has agreed to plead guilty to one count of conspiracy to distribute ketamine. Chavez admitted in his plea agreement to selling ketamine to Plasencia, including ketamine that he had diverted from his former ketamine clinic. Chavez also obtained additional ketamine to transfer to Plasencia by making false representations to a wholesale ketamine distributor and by submitting a fraudulent prescription in the name of a former patient without that patient’s knowledge or consent.



According to the superseding indictment unsealed today, in late September 2023, Plasencia learned that Perry, a successful actor whose history of drug addiction was well documented, was interested in obtaining ketamine. Ketamine is a general anesthetic whose medical risks require a health care professional to monitor a patient who had just been given the drug.

After learning about Perry’s interest in ketamine, Plasencia contacted Chavez – who previously operated a ketamine clinic – to obtain ketamine to sell to Perry. In text messages to Chavez, Plasencia discussed how much to charge Perry for the ketamine, stating, “I wonder how much this moron will pay” and “Lets [sic] find out.”

During September and October of 2023, Plasencia distributed ketamine to Perry and Iwamasa outside the usual course of professional practice and without a legitimate medical purpose on at least seven occasions. He did so by teaching Iwamasa how to inject Perry with ketamine, selling ketamine to Iwamasa to inject into Perry, leaving vials of ketamine with Iwamasa for self-administration, personally injecting ketamine into Perry without the proper safety equipment – including once inside a car parked in a Long Beach parking lot – and failing to properly monitor Perry after Plasencia injected Perry with the drug. Plasencia knew that Iwamasa had never received medical training and knew little, if anything, about administering or treating patients with controlled substances.

The superseding indictment also alleges that Plasencia conspired with Chavez about inventory, price, and availability of ketamine to sell to Perry and Iwamasa. Chavez, in turn, sold Plasencia orally administered ketamine lozenges that he obtained after writing a fraudulent prescription in a patient’s name without her knowledge or consent, and lied to wholesale ketamine distributors to buy additional vials of liquid ketamine that Chavez intended to sell to Plasencia for distribution to Perry.

Beginning in mid-October 2023, Iwamasa also began obtaining ketamine for Perry from Fleming and Sangha. After discussing prices with Iwamasa, Fleming coordinated the drug sales with Sangha, and brought cash from Iwamasa to Sangha’s stash house in North Hollywood to buy vials of ketamine. On October 24, 2023, while waiting for Sangha’s ketamine to arrive, Fleming advised Iwamasa that the ketamine was “on its way to our girl,” referring to Sangha. Sangha has distributed ketamine and other illegal drugs from her stash house in North Hollywood since at least 2019.

Sangha was aware of the danger of ketamine: In August 2019, Sangha sold ketamine to victim Cody McLaury in the hours before his overdose death. After a family member of McLaury’s sent Sangha a text message saying that her ketamine had killed McLaury, Sangha conducted a Google search for “can ketamine be listed as a cause of death[?]” The superseding indictment alleges that Sangha nonetheless continued to sell ketamine from her stash house.

Using the Plasencia-provided instructions and syringes, Iwamasa injected Perry with the ketamine that was sold to him by Fleming and Sangha, including on October 28, 2023, when Perry died at his Pacific Palisades home after receiving multiple ketamine injections. Plasencia sold the ketamine to Iwamasa despite being informed at least one week earlier that Perry’s ketamine addiction was spiraling out of control. After Perry’s death was reported in the news, Sangha texted Fleming, “Delete all our messages.”

After Perry’s death, federal agents and detectives with the Los Angeles Police Department executed search warrants at Sangha’s residence, where they found evidence of drug trafficking, including approximately 79 vials of ketamine, approximately 1.4 kilograms (3.1 pounds) of orange pills containing methamphetamine, psilocybin mushrooms, cocaine, and prescription drugs that appeared to be fraudulently obtained.

In February and March of 2024, in response to a legal request for production of documents in connection with the federal investigation, Plasencia provided altered and falsified medical records, purporting to show that he had a legitimate “treatment plan” in place for Perry, with the intent to influence the investigation into Perry’s death. 

“The U.S. Postal Inspection Service’s partnership with state and federal law enforcement agencies and the support of the U.S. Attorney’s Office demonstrates our continued dedication to protecting communities from the harm caused by the illicit distribution and misuse of dangerous drugs,” said Matthew Shields, Acting Inspector in Charge of the Los Angeles Division. “We will continue to work diligently to bring justice to families affected by these types of crimes.”

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

If convicted of all charges, Sangha would face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment. Plasencia would face up to 10 years in federal prison for each ketamine-related count and up to 20 years in federal prison for each records falsification count.

Iwamasa and Fleming will face up to 15 years and 25 years, respectively, when they are sentenced in their federal cases.

Chavez has been charged in an information pursuant to a plea agreement and will be arraigned on August 30. At sentencing, Chavez will face up to 10 years in federal prison.

The Los Angeles Police Department, the Drug Enforcement Administration, and the United States Postal Inspection Service are investigating this matter.

Assistant United States Attorneys Ian V. Yanniello of the General Crimes Section and Haoxiaohan H. Cai of the Major Frauds Section are prosecuting this case.

LOS ANGELES – An entertainment industry accountant pleaded guilty today to a felony charge for lying to federal law enforcement officials about his role in laundering illicit proceeds from an illegal gambling operation run by a former minor-league baseball player and which involved professional athletes.

William Eric Fulton, 59, of Agoura Hills, pleaded guilty to one count of making false statements.

According to his plea agreement, Fulton and his company provided bookkeeping, accounting, and tax preparation services for Wayne Joseph Nix, 46, of Newport Coast, a former minor-league baseball player who for nearly 20 years ran an illegal bookmaking business.

Beginning no later than 2011, Fulton was aware that Nix ran an illegal gambling business. Nonetheless, Fulton knowingly laundered Nix’s illegal gambling proceeds by continuing to provide financial services to Nix and providing access to the financial system. Specifically, Fulton continued to transfer money between accounts, issue checks and wires to Nix’s gambling clients who won large bets, and helped Nix obtain bank loans to facilitate the gambling business. Between 2010 and 2020, Fulton charged Nix approximately $336,645 in professional fees for his financial services.  

Fulton also admitted in his plea agreement that on three separate occasions from March 2011 to October 2019 he provided personal loans to Nix totaling $1.25 million, which allowed Nix to pay his gambling clients when Nix needed rapid access to funds, which Fulton agreed to provide at no cost to Nix.

In addition, Fulton placed personal bets with Nix via the Sand Island Sports website. On one day, Fulton placed 14 bets, including three bets he made on a professional match of one of his company’s clients. Fulton also referred at least one of his company’s clients to Nix for the purposes of illegal gambling.

During an October 2021 interview with federal law enforcement about the Nix gambling business, Fulton falsely denied all knowledge of Nix’s involvement in sports gambling, falsely claimed to have had no knowledge that Nix was a bookmaker until learning law enforcement had searched Nix’s home in February 2020, and repeatedly made the false assertion that he had never placed a bet with Nix.

United States District Judge Dolly M. Gee scheduled a November 29 sentencing hearing, at which time Fulton will face a statutory maximum sentence of five years in federal prison. Fulton has agreed to pay a fine of no less than $673,290.

Nix pleaded guilty in April 2022 to one count of conspiracy to operate an illegal gambling business and one count of subscribing to a false tax return. His sentencing hearing is scheduled for March 6, 2024.

Nix’s longtime partner in the gambling operation – Edon Yoshida Kagasoff, 45, of Lake Forest – pleaded guilty in April 2022 to one count of conspiracy to operate an illegal gambling business. Kagasoff was sentenced on July 5 to six months of probation, was fined $1,000, and was ordered to forfeit $3,164,563 in ill-gotten gains.

Former Major League Baseball player Yasiel Puig Valdés, 32, who allegedly lied to federal law enforcement investigating Nix’s illegal gambling operation, is charged with obstruction of justice and making false statements. His trial is scheduled for January 16, 2024.

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

Homeland Security Investigations and IRS Criminal Investigation are conducting the ongoing investigation in this matter. The HSI agents are part of the El Camino Real Financial Crimes Task Force.

Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Dan Boyle of the Environmental Crimes and Consumer Protection Section are prosecuting this case.

          LOS ANGELES – An Orange County man was sentenced today to 48 months in federal prison for fraudulently obtaining more than $5 million in COVID-relief loans for three shell companies.

          Raghavender Reddy Budamala, 36, of Irvine, was sentenced by United States District Judge Otis D. Wright II, who also ordered Budamala to pay $5,151,497 in restitution.

          Budamala pleaded guilty on June 21 to one count of bank fraud and one count of money laundering. As part of his plea agreement, Budamala agreed to forfeit real estate in Orange County, Malibu and Los Angeles, as well as approximately $4,119,662 in funds from bank and investment accounts and cryptocurrency.

          From January 2019 to August 2019, Budamala formed or acquired three shell companies with no operations – Hayventure LLC, Pioneer LLC, and XC International LLC. Following the outbreak of the COVID-19 pandemic and the enactment of federal programs designed to address the resulting economic fallout, Budamala submitted to the Small Business Administration seven applications for pandemic-relief loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program.

          As part of the applications filed from April 2020 through March 2021, Budamala falsely represented to the banks administering the COVID-relief business loan programs that his companies employed dozens of individuals and earned millions of dollars in revenue, and that he needed the money for payroll and business expenses.

          The addresses listed for the companies were bogus, nonexistent or residential. The states where Budamala’s companies purportedly operated have no records of those companies paying wages to any employees, and bank records for the companies reflect no significant business income or operating expenses.

          The SBA and the banks funded six of the loans and disbursed a total of $5,151,497. Budamala applied to have several of the loans forgiven and falsely represented that he had used the SBA money entirely for payroll.

          Once the loans were funded, Budamala used the money to pay for personal expenses, including the purchase of a $1.2 million investment property in Eagle Rock, the purchase of a $597,585 property in Malibu, the purchase of a personal residence in Irvine, a $970,000 investment in an EB-5 Immigrant Investor Visa Program and a nearly $3 million deposit into Budamala’s personal TD Ameritrade account.

          Budamala has been in federal custody since his arrest on February 23, when he attempted to abscond from the United States to Mexico via the San Ysidro border crossing. A criminal complaint was filed against him on February 24.

          IRS Criminal Investigation, the FBI, and the Small Business Administration’s Office of Inspector General investigated this matter.

          Assistant United States Attorney Gregory D. Bernstein of the Major Frauds Section and Assistant United States Attorney Maxwell K. Coll of the Asset Forfeiture and Recovery Section prosecuted this 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, among other methods, 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 https://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 (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

          LOS ANGELES – A Santa Clarita man was sentenced today to 41 months in federal prison for attempting to steal millions of dollars in Paycheck Protection Program (PPP) COVID-relief loans for his companies by submitting fraudulent applications that included fake tax documents and information for non-existent employees.

          Raymond Magana, 41, was sentenced by United States District Judge Stanley Blumenfeld Jr., who ordered him to pay $360,415 in restitution. At today’s hearing, Judge Blumenfeld called Magana’s crime “a despicable offense” and noted that Magana exploited a “national emergency” in order to “line his own pockets.”

          Magana pleaded guilty in January 2021 to one count of fraud in connection with major disaster or emergency benefits.

          In May and June 2020, Magana submitted to banks PPP loan applications that contained false statements about the number of employees and the amount of payroll expenses. Specifically, on June 3, 2020, Magana submitted a PPP loan application to Customer’s Bank for $940,416 for The Building Circle LLC, a company registered in his name.

          In that application, Magana falsely claimed the company’s average monthly payroll was $376,167 for 40 workers. Magana admitted to submitting fraudulent tax documents that reported $4,402,000 in annual wages paid to 40 employees in 2019 and $852,000 paid in employee wages during the first quarter of 2020.

          IRS and California Employment Development Department records showed that the company never reported paying any employees, and the underwriting packet also did not include a list of employees or associates for the company, according to an affidavit filed with a criminal complaint in this case.

          Investigators later determined that the Pico Rivera address given as The Building Circle’s headquarters was a 980-square-foot, single-family home that appeared to be a residence, not a business. Ultimately, the loan application was approved and $940,416 was funded to Magana’s company on June 4, 2020, the affidavit states.

          Magana also applied for and received a PPP loan of $360,415 for Forward Builders LLC, another company, using fake tax documents and false employee information, and falsely claiming $1.73 million in employee wages.

          When a bank manager contacted Magana after one of the business accounts receiving PPP funds had been frozen because of suspicious activity, he told the bank “We have all the documents, we got approved,” and he refused to agree to return the improperly obtained PPP funds, the affidavit states. The bank nonetheless kept the $940,416 in Magana's bank account frozen, and he could not access it.

          The actual loss from the two loans that were approved and disbursed was $360,415. Prior to today’s sentencing hearing, Magana deposited with the court $360,415 as his restitution payment.

          Magana’s business partner, Steven R. Goldstein, 37, of Northridge, is serving a one-year federal prison sentence for committing fraud in connection with major disaster or emergency benefits. Goldstein pleaded guilty in December 2020 to a federal fraud charge and admitted in his plea agreement that he fraudulently obtained $655,000 in PPP loans for his companies by submitting false tax documents and fake employee information.

          IRS Criminal Investigation and the Small Business Administration’s Office of Inspector General investigated this case.

          Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office prosecuted this case.

LOS ANGELES – Two members of a $2.1 million Riverside County-based, family-run telemarketing scam each were sentenced in absentia today to 108 months in federal prison for their roles in a scheme that defrauded more than 4,000 job seekers by tricking them into paying fees in exchange for employment opportunities that turned out to be nonexistent.

Lisa Kay Camp, 61, and Barry Lee Biddle, 48, both formerly of Lake Elsinore, were sentenced by United States District Judge Stephen V. Wilson, who also ordered them to pay $2,181,316 in restitution to their victims, which they must pay jointly and severally with three previously sentenced co-conspirators.

Camp and Biddle pleaded guilty in September 2019 and October 2019, respectively, to one count of conspiracy to commit wire fraud. They fled together from pretrial supervision in August 2020 before their sentencing hearings, which were scheduled for October 2020. They remain at large.

From May 2009 to July 2013, Camp, with the help of Biddle and her adult children, operated a fraudulent telemarketing business that went by various fictitious names, including “Contractor Management,” “Commercial Crews,” “US Tradepros,” and “IPower Marketing.” The defendants used auto-dialer services and multiple websites to lure prospective job seekers to pay for background checks that were never performed and to receive job leads that never existed.

Camp controlled nearly two dozen bank accounts in various company names through which she projected the appearance of legitimacy and the co-schemers received money from victims. Biddle set up, maintained, and operated the computer workstations, phone network, and websites used by the fraudulent telemarketing business.

The aggregated amount of loss to job seekers over the four-year period of the scheme was approximately $2,181,316 with at least 4,183 victims defrauded.

Three other defendants – all of whom are children of Camp – have been sentenced in this case after each pleading guilty to one count of conspiracy to commit wire fraud:



Andrea Maureen Aviles, 41, of Lake Elsinore, who was sentenced to 18 months in federal prison;

Gerald James Camp, 42, of Lake Elsinore, who was sentenced to one year and one day in federal prison; and

Allisa Lynn Vasquez, 39, of Sun City, who was sentenced to 18 months in federal prison.



The FBI investigated this matter.

Assistant United States Attorney Julius J. Nam of the Public Corruption and Civil Rights Section is prosecuting this case.

Anyone with information about Lisa Camp and Barry Biddle’s whereabouts is encouraged to contact the FBI’s Los Angeles Field Office at (310) 477-6565 or the United States Marshals Service at 1-877-WANTED-2 or (877) 926-8332.

LOS ANGELES – A Lompoc man was sentenced today to 240 months in federal prison for aiding and abetting the distribution of fentanyl that resulted in the death of a fellow inmate at a Santa Barbara County jail and the serious bodily injury of another inmate.

Kaelen Jacobkeali Wendel, 32, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong.

At the conclusion of a five-day trial, a jury on March 1 found Wendel guilty of one count of distribution of fentanyl resulting in death and serious bodily injury.

In October 2022, Wendel smuggled fentanyl into a unit of the Santa Barbara County North Branch Jail. He packaged the powerful synthetic opioid in candy containers.

As the new inmate, Wendel handed some fentanyl to his co-defendant, Michael Villapania, 36, of Lompoc, in the expectation that he would receive jail commissary goods in exchange. Villapania then sold the drug to a victim identified in court documents as “J.V.” J.V. then shared the fentanyl with another victim, who is identified in court documents as “E.E.”

After ingesting the drug during the early morning hours of October 20, 2022, E.E. and J.V. overdosed. After an inmate alerted a custody deputy about the overdose, deputies and nurses administered multiple doses of Narcan – a life-saving medication used to reverse opioid overdoses – and performed CPR on both inmates. They revived J.V., but E.E. died.

Villapania pleaded guilty on February 1 to one count of distribution of fentanyl. He was sentenced on June 10 to seven years in federal prison.

“[Wendel] committed a serious offense that ended in a tragedy,” prosecutors argued in a sentencing memorandum. “He smuggled fentanyl into a jail unit, killing E.E. and nearly killing J.V. He created a market for fentanyl where there was none.”

The Drug Enforcement Administration and the Santa Barbara County Sheriff’s Office investigated this matter.

Assistant United States Attorneys Suria M. Bahadue, Alexandra Kelly, and Kenneth R. Carbajal of the General Crimes Section prosecuted this case.

SANTA ANA, California – A Whittier man was arrested today on a 14-count federal indictment alleging that he used dating apps and websites such as Tinder, Hinge, and Bumble to con victims of his romance scams out of more than $2 million.Christopher Earl Lloyd, 39, is expected to make his initial appearance and be arraigned on the felony charges this afternoon in United States District Court in Santa Ana.Lloyd is charged with 13 counts of wire fraud and one count of engaging in a monetary transaction in property derived from the fraud.According to the indictment that a federal grand jury returned on July 2, from April 2021 to February 2024, Lloyd used dating apps and websites to befriend and engage in romantic relationships with his victims. Lloyd lied to his victims to give them the impression that he was financially successful and knowledgeable about investments.Lloyd’s falsehoods included that he had closed on multiple properties, that he had been a financial manager for years, that he was the vice president of a company called Planet 13 Holdings, and that he worked for an investment company called Landmark Associates. None of these statements was true.Lloyd fraudulently induced his victims to provide money and property to him, including in the form of purported investments, by telling them he knew of investment opportunities that would benefit them. Lloyd also told his victims that he would invest their money, that they would receive regular returns on these investments, and that they could withdraw these investments at any time.He supported his false statements by signing contracts with victims that specified the investments that the victims were to make and setting a false schedule of investment returns. Lloyd’s victims then sent him money, including via wire transfers, Cash App, Zelle, or cash payments. Lloyd used the victims’ money for his own personal benefit. For example, in May 2023, Lloyd allegedly withdrew $40,000 in funds a victim sent him to write a check to a Lexus car dealership in Mission Viejo.In total, Lloyd caused his victims to suffer more than $2 million in losses.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.         If convicted, Lloyd would face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and up to 10 years in federal prison for the monetary transaction count.The FBI is investigating this matter.Assistant United States Attorney Kevin Fu of the Orange County Office is prosecuting this case.

          LOS ANGELES – A Ventura County man has been sentenced to 168 months in federal prison for participating in a massive fraud scheme that used dozens of nonexistent companies to collect nearly $5 million in unemployment benefits for phony employees who never performed any work at the fake entities.

          Jack Benjamin Hessiani, a.k.a. “Jack Herrera,” 40, of Camarillo, was sentenced today by United States District Judge John A. Kronstadt. Hessiani pleaded guilty in August 2018 to one count of mail fraud.

          According to court documents, Hessiani created numerous fictitious businesses for the sole purpose of defrauding the Employment Development Department (EDD), the state agency that administers the federal unemployment insurance program in California. After he and his co-schemers filed documents with EDD that showed made-up earnings for the fictitious workers, Hessiani and the co-schemers submitted claims for unemployment insurance benefits for laid-off “employees.” In fact, many of the “employees” were people who had agreed to provide their personal identifying information in exchange for a portion of the unemployment insurance benefits. Some of the benefit portions would go to drug users who likely used the funds to enable future drug purchases, while others were poor students who later faced criminal exposure as a result of the actions of Hessiani and his co-schemers, court papers state.

          The unemployment benefits were sent in the form of checks and debit cards to “mail drops” that Hessiani and the co-schemers established in the names of other individuals, according to court documents. After EDD began issuing unemployment benefits, Hessiani ensured that documents were filed that falsely stated that the laid-off “workers” were still unemployed, and he later sought “extended benefits” to obtain unemployment insurance benefits for the sham workers beyond the normal six-month period. These extended benefits were ultimately funded by the United States Treasury.

          According to court documents, Hessiani and his co-schemers submitted approximately 725 unemployment insurance claims – including 521 original claims and 204 claims for extended benefits – in the names of 384 “employees.” The investigation identified 43 fictitious companies based in Ventura County that were used to further the scheme, which caused EDD to suffer actual losses of $3.96 million and the United States Treasury to suffer actual losses of approximately $900,000. Hessiani enlarged his scheme by inducing the people whose names were already being used to obtain fraudulent benefits to “recruit” others who would be identified as additional false employees at the fictitious companies, and he paid referral fees for each new fake worker brought into the scheme.

          Three other defendants in the case have pleaded guilty to criminal charges and are pending sentencing. They are Hessiani’s brother, James Manuel Herrera, 30, of Camarillo; Eduardo Josue Garcia, 27, of Camarillo; and Daniel Ayala-Mora, 29, formerly of Camarillo.

          The investigation in this case was conducted by the United States Department of Labor, Office of Inspector General; the United States Secret Service; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the California Employment Development Department.

          Assistant United States Attorneys Ranee Katzenstein and Julian André of the Major Frauds Section are prosecuting this case.

          WASHINGTON - With the annual tax return filing deadline almost upon us, the vast majority of taxpayers are complying with their legal obligation to file accurate returns and pay the taxes that they owe. However, there are taxpayers who attempt to evade paying their fair share of taxes, file false returns, fail to file returns or seek to obstruct the Internal Revenue Service (IRS)’s efforts to assess or collect monies that are due. The Justice Department’s Tax Division warns taxpayers who attempt to violate the federal tax laws that they face prosecution, jail, restitution and significant monetary penalties.

          “Most Americans follow the tax law and rightfully expect that each of their fellow citizens will do the same,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Yet every year some taxpayers try to take a different path – they hide money offshore, declare only a small portion of their income, make up bogus deductions and lie to the IRS if they are caught. With this year’s filing deadline approaching, these taxpayers should stop, reverse course and simply pay what they owe. As the Justice Department’s recent criminal prosecutions make clear, the consequences for willful violations are severe: jail time and substantial monetary penalties.”

          “The majority of Americans file their taxes without issue and they would tell you that they want strong enforcement of the tax laws to ensure that we are all paying our fair share,” said Chief Richard Weber of IRS Criminal Investigation. “For those thinking about intentionally evading the tax laws – IRS-CI has the finest financial investigators and are trained to follow the money trail wherever it may lead.”

          Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country, as evidenced by the sampling of recent convictions listed below. These enforcement efforts continue year-round.

Recent Tax Evasion and Filing False Tax Returns Prosecutions:



In March, Denver Nichols, a Labadie, Missouri roofing contractor, pleaded guilty to filing false 2007 and 2008 income tax returns. Nichols operated his roofing business under the name Eagle Roofing Co. He late filed false 2007 and 2008 returns that underreported his business’s gross receipts by approximately $959,500 and $794,680.





In March, Stephen Leib, a Philadelphia, Pennsylvania tech business owner, pleaded guilty to tax evasion. Leib owned New Wave Logistics Inc. He evaded more than $800,000 in taxes by cashing a significant amount of his business’s gross receipts at a check cashing facility, lying to his accountant about the total amount of income he earned and filing false tax returns.





In March, Jeffrey Nowak, a Las Vegas, Nevada liquor storeowner, was sentenced to serve 41 months in prison for tax evasion and conspiring to defraud the United States. Nowak conspired with Ramzi Suliman, with whom he jointly owned and operated liquor stores in Las Vegas. Nowak and Suliman skimmed cash receipts and provided their accountant with a phony set of books that omitted nearly $4 million in cash receipts.





In February, Jose Echeverria, a Chelan Falls, Washington businessman, pleaded guilty to filing a false individual income tax return. Echeverria owned and operated a produce sales business. He underreported his income by approximately $564,292.





In December 2016, James and Mardeen Perin, former owners of Sully’s Pub in West Des Moines, Iowa, pleaded guilty to aiding and assisting in filing a false tax return. The Perins filed a false 2013 tax return that did not report cash that they earned through their business.



Recent Failure to File Tax Returns Prosecutions:



In March, James Burton and Lucretia Pecantte-Burton, two Louisiana attorneys, pleaded guilty to failing to file individual income tax returns. Burton and Pecantte-Burton were partners of the law firm Pecantte-Burton & Burton (PB&B) and regularly received cash payments. They also had a partnership interest in a tax return preparation business. Burton and Pecantte-Burton did not file 2007 through 2009 income tax returns.





In February, Samuel Frazier, a Gulfport, Mississippi businessman, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Frazier owned two companies in Gulfport: Frazier Fire Systems LLC and EZ Haul Demolition and Construction LLC. Frazier failed to file a 2009 tax return despite earning more than $618,253 in income.





In December 2016, John Raschella, a former Parma, Ohio resident, was convicted at trial for failing to pay more than $1 million in income taxes, interest and penalties for 1995, 1996 and 1998 through 2012 on income earned as an insurance salesman. He also failed to timely file income tax returns between 1989 and 2012.





In June 2016, Carlos Cortes, a San Antonio, Texas artist, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Cortes did not file tax returns for 2006 through 2009, despite earning more than $1.3 million in income during this time.



Recent Prosecutions Involving the Use of Nominee Entities and Offshore Bank Accounts to Hide Assets and Income:



In March, Casey Padula, a Port Charlotte, Florida owner of Demandblox, a marketing and information technology business, pleaded guilty to conspiracy to commit tax and bank fraud. Padula conspired to move more than $2.5 million to offshore accounts in Belize and disguised them as business expenses in the corporate records. Padula used the funds to pay for personal expenses and purchase significant personal assets.





March, Masud Sarshar, a Los Angeles, California businessman, was sentenced to serve 24 months in prison for hiding more than $23.5 million in offshore bank accounts. Sarshar maintained several undeclared bank accounts at Israeli banks, both in his name and in the names of entities that he created. Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income. Sarshar reported none of this income on his individual and corporate tax returns.





In January, three Orange County, California residents pleaded guilty to hiding millions of dollars in secret foreign bank accounts. Dan Farhad Kalili, David Ramin Kalili and David Shahrokh Azarian, willfully failed to file legally required reports, commonly known as FBARs, disclosing their bank accounts in Switzerland and Israel.





In January, Peggy and John DeYoung, a Missoula, Montana couple, pleaded guilty to conspiring to defraud the United States. The DeYoungs had not filed an income tax return since 1998. Peggy DeYoung earned income through her ownership interest in two companies that owned Southern California mobile home parks. The DeYoungs also established a number of purported trusts. They owned bank accounts in the names of these trusts using fabricated taxpayer identification numbers and paid personal expenses from the accounts, causing a tax loss of $376,350.



Recent Prosecutions of Attempts to Obstruct IRS Efforts to Assess and Collect Taxes:



November 2016, Richard Thomas Grant, a Point Richmond, California man, was sentenced to serve 33 months in prison. Grant stopped filing income tax returns and paying income taxes despite earning significant income as a partner with an engineering company. Grant attempted to frustrate IRS collection and audit efforts by filing lawsuits against the IRS. To conceal his income, Grant used prepaid debit cards and money orders to pay personal expenses.





In November 2016, Steven Headden Young of St. Petersburg, Florida, was sentenced to serve 21 months in prison. Young evaded a substantial portion of his individual income taxes for 2007 through 2011 and interfered with an IRS audit. He fabricated a letter from the IRS to a bank directing the bank to send subpoenaed records to a bogus address.





In October 2016, Henti Lucian Baird, a Greensboro, North Carolina resident and former IRS revenue officer, pleaded guilty. Baird filed tax returns each year but has not paid since at least 1998. Baird created nominee bank accounts to hide hundreds of thousands of dollars from the IRS, submitted false information to the investigating IRS officer regarding these accounts and transferred funds from nominee accounts to avoid impending IRS levies.





June 2016, Paul Tharp, a North Carolina man, was sentenced to serve 21 months in prison. Tharp failed to file tax returns for 2003 through 2006, and the IRS assessed income tax against him for those years. Tharp attempted to evade payment of his tax debt by filing false disclosures with the IRS, omitting businesses that he owned as well as bank accounts and rental income.



          More information about the Tax Division’s criminal and civil enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.