Making Immigration Happen
Chicago Woman Arrested for Selling Fraudulent Identity Documents to Illegal Aliens
A woman was arrested Wednesday, February 13, 2013, on charges she allegedly sold fraudulent identity documents to illegal aliens. These charges resulted from an investigation conducted by U.S. Immigra

Tag Archives: fraud

Nigerian National Guilty of Wire Fraud

A Nigerian man pleaded guilty in federal court Tuesday, January 15, 2013, to wire fraud. The guilty plea is the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Adebowale Ayodeji Owoaje, 31, pleaded guilty to a scheme to defraud individuals who were selling items and applying for jobs on Internet website craigslist. Using various aliases when he was located overseas, Owoaje used email to reach an agreement with the individuals on the sale price of items or terms of employment, including funds for a purported bonus or training materials.

From overseas, Owoaje sent counterfeit cashier’s checks to his co-conspirators in the United States. Based on instructions from Owoaje, a co-conspirator typed amounts on counterfeit cashier’s checks that exceeded the sales price or bonus agreed to by Owaoje and the individuals. The co-conspirator then mailed the counterfeit cashier’s checks to the individuals.

Owoaje informed individuals that a check in the wrong amount was sent to them by “mistake.” He then asked individuals to deposit that check in their bank account and to keep the amount Owoaje owed the individual, plus an additional sum for their trouble. Owoaje instructed individuals to wire the balance of the money via Western Union to a co-conspirator, whom Owoaje falsely represented to individuals as his secretary or shipping agent. Only after wiring this money did individuals learn that the cashier’s checks they received were counterfeit.

“HSI aggressively pursues these scam artists, even when they concoct and perpetrate their schemes from a foreign country with a perceived sense of anonymity and security,” said John P. Kelleghan, special agent in charge of HSI Philadelphia. “This case also serves as a reminder to U.S. citizens that if a business proposition sounds too good to be true, it probably is a scheme. HSI special agents were successful in identifying a manipulative criminal, who is now being held accountable for his crimes.”

Owoaje is scheduled to be sentenced April 15, 2013 and faces up to 80 years in federal prison, a three-year period of supervised release and a fine of up to $1 million.

2 Singapore Nationals Extradited to Washington, D.C. for Conspiracy to Export Military Equipment

Two individuals from Singapore have been extradited to stand trial in the District of Columbia in connection with an alleged fraud conspiracy involving the unlawful export of 55 military antennas from the United States to Singapore and Hong Kong.

The joint investigation is being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Department of Commerce and the FBI, with assistance from HSI Singapore and the Directorate of Defense Trade Controls within the Department of State, which licenses and regulates the export and international sales of United States Munitions List items.

Hia Soo Gan Benson, aka “Benson Hia,” and Lim Kow Seng, aka “Eric Lim” were arrested by Singaporean authorities Oct. 24, 2011, in connection with a U.S. request for extradition.

Benson and Seng each face one charge of conspiracy to defraud the United States by violating the Arms Export Control Act, and a potential sentence of five years in prison.

An indictment returned in the District of Columbia Sept. 15, 2010, alleges that Benson and Seng conspired to defraud the United States by causing a total of 55 cavity-backed spiral antennas and biconical antennas to be illegally exported from a Massachusetts company to Singapore and Hong Kong without the required Department of State license. These military antennas are controlled for export as U.S. munitions and are used in airborne and shipboard environments.

Benson and Seng are alleged to have, among other things, conspired to undervalue the antennas to circumvent U.S. regulations on the filing of shipper’s export declarations to the U.S. government. They also allegedly used false names and front companies to obtain the antennas illegally from the United States.

The prosecution is being handled by Assistant U.S. Attorney Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division.

Man Arrested for Impersonating ICE Officer, Threatened and Defrauded Immigrants

A New Jersey man was arrested Oct. 12, 2012, on charges of falsely impersonating a federal officer in order to defraud aliens seeking immigration assistance. The arrest is the result of an investigation being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Office of Professional Responsibility (OPR).

Ruben Alvarado, 27, of Elizabeth, N.J., is charged with one count of impersonating a federal officer and one count of identification document fraud.

According to court documents, from September 2009 through May 2011, Alvarado pretended to be an officer or employee acting under the authority of the Department of Homeland Security (DHS), ICE and the Transportation Security Administration. Alvarado targeted victims, via Facebook and in person, who desired to obtain federal employment, legal status, or work or travel authorization in the United States.

Alvarado would provide his victims false approvals of their applications, often on forms inappropriate to the relief requested, that bore his signature as a purported officer of the United States. Alvarado would threaten victims who complained that the materials were not genuine by saying that his position at ICE vested him with the power to have them and their children deported. Alvarado took no action to further his victims’ legal or employment status, but demanded and obtained payments from his victims totaling more than $17,000.

If convicted of the impersonation charge, Alvarado faces three years in prison, and on the identification document fraud charge, 15 years in prison. Both also carry a maximum fine of $250,000.

Assisting OPR in the investigation was the DHS Office of Inspector General in Miami, Fla., and the Union County (N.J.) Prosecutor’s Office.

MVA Employee Enters Guilty Plea; Sold Fraudulent Driver’s Licenses to Illegal Aliens

Michael Anthony Peters, Jr. 29, of Riverdale, Md. pleaded guilty Friday, September 7, 2012, to a conspiracy to produce and sell Maryland driver’s licenses without lawful authority. The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) with the assistance of the Maryland Motor Vehicle Administration (MVA).

“Michael Anthony Peters violated the public’s trust and risked endangering our community by producing and issuing Maryland driver’s licenses to individuals who could not or were not willing to legitimately pass the required MVA examination,” said HSI Baltimore Special Agent in Charge William Winter. “This type of fraud poses a serious security vulnerability and could put the security of our communities and even our country at risk.”

According to his plea agreement, Peters was an employee of the MVA assigned to the Largo Branch. Peters’ duties included the issuance of Maryland driver’s licenses. Peters admitted that from July through October 2007, he received payment in exchange for producing and issuing Maryland driver’s licenses to individuals whom he knew had not passed the required tests. Many of these individuals were illegal aliens.

According to his plea agreement, Peters typically received approximately $300 as a bribe for each non-commercial driver’s license and $400 as a bribe for each commercial driver’s license he issued. Peters falsified MVA records to state that the applicants had passed the required tests and issued driver’s licenses in their names. Over the course of the conspiracy, Peters produced at least 40 driver’s licenses without lawful authority.

Peters faces a maximum sentence of five years in prison followed by three years of supervised release and a fine of $250,000 at his sentencing Dec. 18 before U.S. District Judge Roger W. Titus. As part of his plea agreement, Peters will be required to pay restitution in the amount of $12,000.

The investigation was conducted by HSI Baltimore and the MVA Investigation and Security Services Division.

The case was prosecuted by Assistant U.S. Attorney Robert K. Hur.

Charges for Individuals and Corporation Involved in Million Dollar Afghani Military Fraud Scheme

Three individuals and a corporation are charged with fraud and bribery in connection with their alleged role in a multi-million dollar fraud scheme involving the procurement of a military contract for services in Afghanistan, according to an indictment returned by a federal grand jury in Salt Lake City Wednesday, August 22, 2012.

Named in the 72-count indictment are David Young, 49, of Hernando Beach, Fla.; Christopher Harris, 48, of Lake Havasu, Ariz.; and Michael Taylor, 51, of Boston, the president of American International Security Corporation (AISC), which is also charged in the indictment.

The indictment alleges conspiracy; procurement and wire fraud; bribery of a public official; acceptance of a bribe by a public official; and money laundering and structuring violations. The charges follow an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Defense Criminal Investigative Service (DCIS), Internal Revenue Service-Criminal Investigation and the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit.

“As we are all aware, families in Utah and all across America continue to send loved ones to serve our nation in Afghanistan, and taxpayers continue to pay for the cost of the effort,” said Utah U.S. Attorney David B. Barlow. “Our office will fully and aggressively pursue alleged public corruption and fraud against taxpayers and the government such as that identified in today’s indictment.”

According to the indictment, in the spring of 2007, bids for a contract to manage Afghan supplies and train Afghan troops to do supply management were solicited by the U.S. Army. Because the need was deemed urgent, the Army requested a limited number of bids for the contract from private entities selected by the Army. The contract required the work to be performed in Afghanistan by a U.S. company. The indictment alleges the defendants conspired to use protected contract information to obtain an unfair competitive advantage for AISC over other bidders.

“The scope, complexity and brazenness of this alleged fraud scheme are astounding,” said ICE Director John Morton. “If the allegations prove true, millions of dollars in U.S. government funds earmarked to help train and equip Afghan soldiers were used instead to indulge the defendants’ appetites for wealth and opulent lifestyles, including investments in private planes, precious metals and real estate. As this long-term probe and the resulting indictment make clear, HSI and its investigative partners are committed to ensuring that those who misuse taxpayers’ dollars and violate the public’s trust are held accountable for their actions.”

The indictment alleges that Young, an activated reservist in the Army with the rank of Lieutenant Colonel, served as a current or former public official in his action for and on behalf of the U.S. Army. By virtue of his position, Young had access to bid, proposal and source selection information about the contract, including information establishing the government’s price estimate. Young also suggested AISC as one of a limited number of bidders. As a current or former official with responsibilities involving the contract, Young was barred from personally benefiting from the contract.

The indictment alleges that before the contract was awarded, Young disclosed information about the government’s price estimate, selection criteria, competing bid information and other confidential procurement information to Harris, Taylor, and AISC. The indictment also alleges Harris,Taylor, and AISC promised and gave money to Young in return for him using his official position to influence the award of the contract.

“Fraud and corruption in military contracting not only take away precious dollars necessary for the dedicated American warfighter, but they undermine the confidence of the American public who demand a military procurement system that spends their tax dollars wisely and responsibly,” said Janice M. Flores, special agent in charge of the DCIS Southwest Field Office. “In this case, it is alleged that both a military officer and a government contractor betrayed the public’s trust. This investigation should serve as a warning for those intent on defrauding the U.S. military and American public that law enforcement will pursue these crimes relentlessly.”

Using the protected contract information, AISC submitted a bid to the U.S. Army of $899,782, an amount that allegedly closely matched the military’s price estimate for the contract which Young had helped establish. AISC was awarded the six-month contract in the amount of $899,781.96. The indictment also alleges that based on the initial fraud in the procurement of the pilot contract, Harris, Young and Taylor obtained extensions of the contract and four additional follow-on contracts. According to the indictment, AISC received approximately $54 million from the Army under the agreement. The co-conspirators distributed more than $20 million among themselves, the indictment alleges.

The indictment alleges 13 counts of bribery of a public official and 13 counts of acceptance of a bribe by a public official in connection with payments Harris, Taylor and AISC made to Young. The indictment claims Harris, Young, Taylor and AISC used nominee entities and individuals to conduct and conceal the transfer of proceeds of their scheme among themselves. The indictment charges 16 counts of wire fraud involving email correspondence between the defendants as a part of the execution of the alleged fraud scheme.

Several counts of the indictment relate to alleged steps the defendants took to conceal the alleged fraud, including engaging in money laundering and structuring transactions. Harris is charged in seven counts of the indictment with structuring currency transactions he made at America First Credit Union in St. George, Utah, to avoid the financial institution’s legal obligation to report transactions in excess of $10,000. The indictment alleges Harris made a series of $9,000 cash withdrawals from the credit union between May 2009 and February 2010.

“IRS Criminal Investigation is proud to lend its financial investigative expertise to complex, multi-agency investigations,” Paul Camacho, special agent in charge of the IRS Las Vegas Field Office, said. “By working closely with our fellow law enforcement partners, we can ensure that crime doesn’t pay. We hit the bad guys where it hurts – in their wallets. By taking away their assets and profits, we deprive them of the proceeds of their criminal activity.”

The indictment also contains a notice of intent to seek forfeiture of substantial real and personal property, including more than $6 million in funds; approximately 20 houses and other property in Utah, Florida, Arizona and New Hampshire; motor vehicles, including a Hummer and a Jaguar; a boat; an airplane; and hundreds of gold coins.

Harris was arrested in Utah on a complaint filed in July. He had an initial appearance and was released. Summonses will be issued to AISC, Young and Taylor to appear in U.S. District Court inSalt Lake City.

The conspiracy count carries a maximum penalty of up to five years in prison. The two government procurement fraud counts also have potential five-year sentences. The potential penalty for the bribery charges is up to 15 years for each count. Each of the 16 wire fraud counts is punishable by up to 30 years in prison. The money laundering counts carry potential maximum penalties of 10 to 20 years, depending on the violation. The charges involving the structuring of transactions carry potential penalties of up to five years per count.

Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

Fraudulent Gambling Ring Dismantled by ICE, HSI, and FBI

PokerStars and Full Tilt Poker, two of three online poker companies sued by the U.S. in a money laundering and forfeiture complaint, have entered into a settlement agreement which requires PokerStars to forfeit $547 million and Full Tilt Poker to forfeit virtually all of its assets. The settlement comes as a result of an investigation which included the Asset Identification and Removal Group (AIRG) of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), along with the FBI.

The allegations are based on the amended civil forfeiture complaint filed in September and the indictments returned in the related criminal action:

On October 13, 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act (UIGEA), making it a federal crime for gambling businesses to “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.” Despite the passage of the UIGEA, Full Tilt Poker, PokerStars, and Absolute Poker/Ultimate Bet (the poker companies), each located offshore, continued operating in the U.S. Because U.S. banks and credit card issuers were largely unwilling to process their payments, the poker companies allegedly used fraudulent methods to circumvent federal law and deceive these financial institutions into processing payments on their behalf. For example, the poker companies arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls. Of the billions of dollars in payment transactions that the poker companies deceived U.S. banks into processing, approximately one-third or more of the funds went directly to the poker companies as revenue through the “rake” charged to players on almost every poker hand played online.

To accomplish their fraud, the poker companies worked with an array of highly compensated “payment processors” who obtained accounts at U. S. banks for the poker companies. The payment processors lied to banks about the nature of the financial transactions they were processing, and covered up those lies, by, among other things, creating phony corporations and websites to disguise payments to the poker companies. For example, a PokerStars document from May 2009 acknowledged that they received money from U.S. gamblers through company names that “strongly imply the transaction has nothing to do with PokerStars,” and that PokerStars used whatever company names “the processor can get approved by the bank.”

Full Tilt Poker further defrauded players by misrepresenting that player funds on deposit in online gambling accounts were safe, secure and available for withdrawal at any time. In reality, the company did not maintain funds sufficient to repay all players, and instead, utilized players’ funds to distribute more than $400 million to Full Tilt Poker’s owners. By March 31, 2011, two weeks before the initial complaint in this action was unsealed, Full Tilt Poker owed approximately $390 million to players around the world, including approximately $160 million to players in the United States. At that time, Full Tilt Poker had only approximately $60 million deposit in its bank accounts. Full Tilt Poker’s scheme continued even after the civil forfeiture action commenced and the related criminal indictment was unsealed in April 2011. Full Tilt Poker continued accepting foreign player funds despite the fact that it had liabilities to players around the world for over $300 million, yet held only a small fraction of that amount in its bank accounts.

Eleven defendants were charged criminally in connection with the original Internet poker indictment, seven of whom have been arrested. All of the seven defendants except one have each pleaded guilty. Charges are still pending against the remaining four defendants.

According to court documents, under the terms of the settlement with Full Tilt Poker, the company agreed to forfeit virtually all of its assets to fully resolve the charges in the complaint. Under the terms of the settlement with PokerStars, the company agreed to forfeit $547 million to the U.S. and to reimburse the approximately $184 million owed by Full Tilt Poker to foreign players, in order to fully resolve the allegations in the complaint. The settlement further provides that PokerStars will acquire the forfeited Full Tilt Poker assets from the government.

Under the terms of the settlement with Full Tilt Poker, U.S. victims of the company’s alleged fraud will be able to seek compensation from DOJ. The funds that will be used to compensate qualifying victims will come from the $547 million that will be forfeited by PokerStars as part of its settlement with the government.

In addition to forfeiting $547 million to the U.S., under the terms of the settlement with PokerStars, the company must make available to foreign players all balances that were held in the Full Tilt Poker accounts within 90 days; the amount of those balances is approximately $184 million. Pokerstars will also acquire the forfeited Full Tilt Poker assets from the government. PokerStars’ acquisition will be complete upon the government’s receipt of a $225 million payment from PokerStars, which must take place within six days of the entrance of the settlement on Wednesday, August 1, 2012.

The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Mexican National Removed for Fraud; Practiced Medicine Without License

A Mexican national convicted in Nevada for practicing medicine without a license, who is also wanted in his native country for fraud, was turned over to Mexican authorities Thursday, August 2, 2012, by officers from U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO).

Edgar Eduardo Orozco-Abundis, 41, was transported by ERO from Reno to San Diego, where he was repatriated at the Otay Mesa border crossing. Orozco is charged with criminal fraud in three separate warrants issued by Mexico’s Attorney General in July 2010, December 2010 and April 2011.

Orozco’s removal from the United States comes 10 months after he was encountered by ERO officers at the Washoe County Jail during a routine screening for criminal aliens. Further processing confirmed his identity and ERO officers subsequently received notification from the Mexican Attorney General’s regional attaché that Orozco was wanted in Mexico on outstanding criminal warrants for fraud.

Orozco’s incarceration in the Washoe County Jail followed his arrest on felony local charges for practicing medicine without a license and obtaining money under false pretenses. After encountering Orozco at the jail, ERO filed the paperwork placing him in deportation proceedings. On Sept. 26, 2011, an immigration judge granted Orozco’s request to waive his right to an immigration hearing and receive a stipulated removal to Mexico.

Department of Homeland Security databases indicate Orozco was in the U.S. illegally. On July 18, Orozco’s state criminal sentence was suspended and he was turned over to ERO for deportation.

“This case shows yet again the vital public safety benefit of the screenings ICE does at jails and prisons nationwide,” said Steven Branch, field office director for ERO Nevada. “Thanks to enhanced technology and increased information sharing with our law enforcement partners, it’s more and more difficult for international fugitives to elude justice by fleeing to the United States.”

Since Oct. 1, 2009, ERO has removed 455 foreign fugitives from the United States who were being sought in their native countries for serious crimes, including kidnapping, rape and murder. ERO works with ICE’s Office of International Affairs, foreign consular offices in the United States, and Interpol to identify foreign fugitives illegally present in the country.

L.A. Toy Company Dismantled for Money Laundering, Drug Trade

The co-owners and three employees of a Los Angeles toy company made their initial appearances in federal court Monday, April 16, following their indictment for allegedly orchestrating an elaborate financial scheme to launder millions of dollars for drug trafficking organizations in Mexico and Colombia.

The employees of Woody Toys Inc. were taken into custody the morning of Monday, April 16, capping an 18-month probe by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service (IRS) Criminal Investigation, and the multi-agency Southern California Drug Task Force headed by the Drug Enforcement Administration (DEA). Two Mexico-based toy dealers are also charged in the case.

The two-count indictment, unsealed Monday, April 16, accuses the City of Industry toy wholesaler, and seven individual defendants, with using dozens of “structured” cash deposits in the United States to launder illicit proceeds generated by drug trafficking organizations. The indictment also accuses Woody Toys of receiving multiple cash payments of more than $10,000 without filing the required paperwork with the IRS. The case is being prosecuted by the U.S. Attorney for the Central District of California.

“Using a toy company as a front for narcotics proceeds is an insidious practice,” said United States Attorney André Birotte Jr. “I applaud the federal agents who worked long and hard to crack this elaborate money laundering scheme. Their work hits drug traffickers where it hurts – in their wallets and pocketbooks.”

The indictment details how Woody Toys employees allegedly received payments in U.S.
dollars of what one defendant described as “narco-money.” According to the indictment, in some instances the money was deposited in the company’s accounts at banks in Chicago, New York, Laredo and south Florida on behalf of the company’s customers in Mexico and Colombia. Other times, the currency was given directly to Woody Toys’ employees by  couriers. The indictment describes one such money drop in the parking lot of an El Monte fast food restaurant where an unnamed company worker picked up $10,000 wrapped in cellophane. In another example, seized video shot by a company surveillance camera  shows one of Woody Toys’ owners accepting seven bricks of cash from two men who were not toy buyers.

According to court documents, the company’s cash receipt books reveal that between 2005
and December 2011, Woody Toys took in approximately $3 million in out-of-state cash without filing the required IRS forms. Additionally, during that same six-year timeframe, Bank of America (BoA) records indicate another $3 million in out-of-state cash was deposited into Woody Toys’ BoA accounts in structured amounts.

“Drug dealers and toy sellers are unlikely bedfellows, but let’s not kid ourselves, legitimate teddy bear buyers don’t close the sale with stacks of cash in restaurant parking lots,” said Claude Arnold, special agent in charge for HSI Los Angeles. “The reality is, unscrupulous companies that conspire to help the cartels cover their financial tracks are contributing in no small way to the devastation wrought by the international drug trade.”

According to the indictment, as part of the scheme, foreign toy retailers with Colombian
and Mexican pesos would contact currency brokers to buy discounted U.S. dollars to purchase merchandise from Woody Toys. The dollars being “sold” were allegedly proceeds from illegal drug sales that have been deposited in the toy company’s accounts or delivered to the business. Finally, the Colombian or Mexican pesos the currency broker received from the foreign toy retailer are remitted to the drug trafficking organization.

“This investigation revealed that Woody Toys was accepting bulk cash at their business premises allegedly from individuals other than their toy customers,” stated Special Agent in Charge Leslie P. DeMarco of IRS-Criminal Investigation’s Los Angeles Field Office. “Money launderers seeking to introduce illegally-generated funds into the legitimate financial system by structuring their deposits will not be tolerated by the federal
government. IRS-Criminal Investigation is working hard to ensure criminals do not use the United States financial system to legitimize their illegal profits.”

Investigators say the scenario, often referred to as a “black market peso exchange,” benefits all of the participants. Criminal organizations have a means to launder illicit proceeds using international trade; the access to discounted U.S. currency enables foreign retailers to avoid steep exchange rates and other fees, boosting their profit margins; and for the U.S.-based company, the scheme is a way to substantially increase its sales volume.

In addition to the criminal charges, the indictment seeks the forfeiture of more than $3.7 million identified during the investigation as proceeds allegedly derived from the money laundering scheme.

“Today’s announcement makes it clear that DEA will continue to work together with its
federal, state, local and international partners in identifying, targeting and arresting those who distribute drugs in our communities or benefit from the distribution of drugs to our children,” said Briane M. Grey, acting special agent in charge for DEA Los Angeles.

According to the indictment, the defendants’ money laundering activities date back to
2005 and continued until on or about December 2011. Those charged in the case are:

  • Jia “Gary” Hui Zhou, 43, of Diamond Bar, co-owner of Woody Toys;
  • Dan “Daisy” Xin Li, 43, of Diamond Bar, co-owner of Woody Toys;
  • Kit Yee Lam, 51, of Diamond Bar, accountant for Woody Toys;
  • Jazmin Contreras, 33, of Los Angeles, accountant for Woody Toys;
  • Anabel Rufino, 32, of Norwalk, sales manager for Woody Toys;
  • Jose Miguel Yong-Hinojosa, 26, of Guadalajara, Mexico, Woody Toys client; and
  • Luis Ernesto Flores Rivera, 53, of Guadalajara, Mexico, Woody Toys client.

The five toy company employees were taken into custody Monday in the Los Angeles area. Luis Flores was arrested April 1 in Laredo, Texas. He has been arraigned and is expected to be transferred to California by the U.S. Marshals Service. Meanwhile, Jose Yong-Hinojosa was detained by federal agents Saturday night at Los Angeles International Airport  following his arrival on a flight from Mexico.

The multi-agency probe targeting Woody Toys began in November 2010 based on  evidence uncovered during a similar money laundering investigation targeting another Los Angeles-area toy wholesaler, Angel Toys. Angel Toys’ two top executives pleaded guilty to money structuring violations and were sentenced earlier this year to 37 months in prison. Several former employees of Angel Toys subsequently went to work for Woody Toys.

All of the defendants in the Woody Toys case are charged with conspiring to evade
federal reporting requirements involving cash transactions of more than $10,000, a charge that carries a maximum penalty of five years in federal prison. In addition, the company, and defendants Zhou and Flores are charged with conspiring to launder money, which is punishable by up to 20 years in prison.

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

USPS Manager and Wife Sentenced for Federal Fraud

A former Bay Area manager for the U.S. Postal Service (USPS) pleaded guilty the week of April 6 to wire fraud charges and conspiring to violate the federal conflict of interest statute for orchestrating a fraudulent billing scheme involving a truck leasing company he operated with this wife.

Balvinder Singh Chadha, 45, of Union City, admitted he was an investor and the de facto
head of a company called Golden Pacific Logistics, Inc. (GPL) while employed as the manager of vehicle service operations at a USPS facility in Oakland. GPL was established for the purpose of obtaining truck leasing contracts with the USPS unit Chadha managed.

The case is the result of a multi-year probe by the USPS Office of Inspector General’s Major Fraud Investigations Division and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

In July 2005, Chadha endorsed GPL during the procurement process for a USPS truck
leasing contract that was ultimately awarded to GPL. Over the next four years, GPL billed USPS for trucks that were never leased, mileage that was never incurred and maintenance costs that were never authorized under GPL’s contract. Using his USPS position, Chadha authorized payments to GPL and requested at least 18 modifications of the original contract, which extended the length of the contract and increased the number of trucks authorized for leasing. All told, GPL billed and received more than $6.4 million, which included at least $4.4 million in fraudulent billing.

Chada’s wife, Jaspinder Kaur Chada, 39, pleaded guilty March 28 to her role in the
fraud conspiracy.

In pleading guilty, the defendants admitted conspiring to violate the federal conflict of interest statute, which prohibited Balvinder Chadha, as an USPS employee, from participating in a contract in which he and his wife had a financial interest. The defendants admitted they engaged in a variety of measures to conceal Balvinder’s association with GPL and create the appearance that he and GPL were engaged in an arm’s-length business relationship.

The Chadhas were charged in a two-count information filed March 16. Count one charged Balvinder Chadha with committing wire fraud and count two charged him and his wife with conspiring to violate the federal conflict of interest statute. In addition, the information contains a forfeiture allegation against Balvinder Chadha in relation to the wire fraud offense. Pursuant to their respective plea agreements, Balvinder Chadha pleaded guilty to both counts and his wife pleaded guilty to count two.

“As federal agencies, we have a responsibility to combat fraud and ensure taxpayers’ dollars are not being misspent,” said Clark Settles, special agent in charge for HSI San Francisco. “These guilty pleas should send a message about the serious consequences facing those who seek to exploit their position for personal gain at the expense of the American people.”

“The vast majority of Postal Service employees and contractors are hard-working
professionals dedicated to the furtherance of Postal Service operations,” said Joanne Yarbrough, special agent in charge for the Major Fraud Investigations Division of the USPS Office of Inspector General. “However, when employees and contractors violate the public trust, as in this case, we will investigate those individuals aggressively and seek prosecution to the fullest extent of the law.”

The Chadhas were both released on bond. Their sentencing is set for July 11. Wire fraud carries a maximum sentence of 20 years and the conspiracy charge is punishable by up to five years in prison. Additionally, each count carries a possible fine up to $250,000, or twice the gross pecuniary gain or twice the gross pecuniary loss, whichever is greater.

Assistant U.S. Attorney Andrew S. Huang is prosecuting the case aided by legal assistants
Vanessa Vargas and Jeanne Carstensen. Assistant U.S. Attorney Susan Gray also provided
assistance with the case.

Fresno Man Pleads Guilty to Fraudulent License Scheme

A Fresno-area man has pleaded guilty to federal criminal charges stemming from his role in a scheme to sell fraudulently obtained California driver’s licenses to ineligible  individuals.

Moreno Delgado, 31, of Riverdale, entered his guilty plea Monday, March 12. According
to the plea agreement, Delgado recruited people who wanted a genuine California driver’s
license but could not get one through legitimate means. Delgado would have them fill out the Department of Motor Vehicles (DMV) application form, and for a fee, he would pass the information and payment on.

Once former DMV technician and co-defendant Alfonso Casarez received the information
from Delgado, he electronically altered the individual’s driver’s license application to reflect that the person had passed required DMV tests that had never been taken or that the individual had failed. After alteration of the records, the DMV automatically issued and mailed a genuine driver’s license to the individual. Delgado admitted to recruiting three people for this scheme, one of whom received a Class A commercial license.

Delgado’s sentencing is set for May 29. He faces a maximum statutory penalty of five
years in prison.

This case is the product of an investigation by U.S. Immigration and Customs  Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Department of Motor Vehicles, Investigations Division, Office of Internal Affairs. Assistant
U.S. Attorneys Henry Z. Carbajal III and Grant B. Rabenn are prosecuting the case.

Charges are currently pending against Casarez, as well as 11 other co-defendants. All
remaining defendants are scheduled for a hearing before Judge O’Neill May 21.