Contra Costa Herald

News Of By and For The People of Contra Costa County, California

Concord nursing home to pay $2.3 million in settlement of grossly substandard care allegations

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Submitted false claims in billing to Medicare and Medi-Cal programs

By U.S. Attorney’s Office, Northern District of California

Tranquility Incorporated, a corporation doing business as San Miguel Villa which is a 190-bed skilled nursing facility located in Concord, CA, has agreed to pay $2.3 million to settle allegations that it submitted false claims by billing the Medicare and Medi-Cal programs for grossly substandard nursing home services it provided to its residents between 2012 and 2017, announced United States Attorney Stephanie M. Hinds and Department of Health and Human Services Office of Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan. (See settlement)

The settlement resolves allegations that from 2012 to 2017 San Miguel Villa submitted, or caused to be submitted, claims to the Medicare and Medi-Cal programs for payment of its services that were grossly substandard and failed to meet minimum required standards of skilled nursing care in multiple ways. The United States alleges that nursing home residents at San Miguel Villa were overmedicated with psychotropic drugs, suffered excessive falls, were exposed to resident-on-resident altercations, and experienced other mental and physical harm.

“Residents of nursing homes are among the most vulnerable in our community, and they rely on Medicare and Medi-Cal programs to provide the care and services they must have,” said United States Attorney Stephanie M. Hinds. “Nursing homes are entrusted to impart competent and quality care to their residents. This case demonstrates that when federal funds are provided but substandard care is delivered, this office is committed to seeking accountability.”

“Nursing homes are intended to be places of comfort and healing, but the provision of substandard care jeopardizes the residents’ health and safety,” stated Steven J. Ryan, Special Agent in Charge with HHS-OIG. “HHS-OIG and our law enforcement partners are staunchly dedicated to investigating allegations of inadequate care at Medicare- and Medicaid-certified nursing homes.”

Assistant U.S. Attorney Gioconda Molinari investigated the matter with the assistance of Paralegal Lillian Do and Auditor Garland He. The United States Attorney’s Office initiated the investigation with assistance from HHS-OIG as part of its ongoing commitment to ensure that nursing home residents receive the necessary skilled nursing home services that they are entitled to and require. The United States Attorney’s Office acknowledges and thanks HHS-OIG as well as the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse for their assistance in investigating this matter.

Working in conjunction with the United States Department of Justice Elder Justice Initiative, the United States Attorney’s Office runs an Elder Justice Task Force to identify and investigate nursing homes that provide grossly substandard care, and to support the efforts of state and local prosecutors, law enforcement, and other elder justice professionals who combat elder abuse, neglect and financial exploitation. If you or a loved one is experiencing abuse at a nursing home, please contact the California Long Term Care Ombudsman Crisis line at 1-800-231-4024, or the National Elder Fraud Hotline at 1-833–FRAUD–11 (or 833–372–8311).

 

Sutter Health agrees to pay $13 Million to settle False Claims Act allegations of improper billing for lab tests

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By U.S. Attorney’s Office, Northern District of California, U.S. Department of Justice

SAN FRANCISCO – Sutter Health, a Sacramento-based health care services provider, and its affiliate Sutter Bay Hospitals, the successor to Sutter East Bay Hospitals dba Alta Bates Summit Medical Center (collectively Sutter Health), agreed to pay more than $13 million to settle allegations that it violated the federal False Claims Act by billing the United States for toxicology screening tests performed by outside labs, announced United States Attorney Stephanie M. Hinds; Federal Bureau of Investigation San Francisco Special Agent in Charge Robert K. Tripp; Office of Personnel Management Office of Inspector General (OPM OIG) Special Agent in Charge Amy K. Parker; Department of Health and Human Services Office of Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan; Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) Western Field Office Special Agent in Charge Bryan D. Denny; and the Defense Health Agency (DHA). Sutter Health DOJ Settlement Agrmt 10.17.2022

“Sutter Health agreed to pay $13 million to settle allegations that it billed government health programs for lab tests performed by others,” said U.S. Attorney Stephanie M. Hinds. “Government health care programs must be protected, and this office will investigate and pursue health care providers that fail to provide the services paid for by public health care programs.”

“Investigating health care fraud and abuse is a priority for the FBI,” said FBI San Francisco Special Agent in Charge Robert K. Tripp. “These cases are often worked in conjunction with our federal law enforcement partners, and this settlement is a great example of the multi-agency investigative team’s hard work to protect the integrity of the Federal Employees Health Benefits Program.”

“The OPM OIG is committed to protecting the Federal Employees Health Benefits Program from fraudulent claims,” said OPM OIG Special Agent in Charge Amy K. Parker. “I applaud the dedicated team for their effort in securing today’s settlement.”

“When medical providers charge federal health care programs for services that other providers actually performed, the integrity of these programs is undermined,” said HHS-OIG Special Agent in Charge Steven J. Ryan. “Working with our law enforcement partners, we will continue to uproot and investigate such schemes.”

“Today’s announced outcome concludes a collaborative effort to hold Sutter Health accountable for its improper billing practices that harmed our health care system, including the Department of Defense’s TRICARE program,” said DCIS Western Field Office Special Agent in Charge Bryan D. Denny. “DCIS will continue to work closely with our law enforcement partners to protect the integrity of the health care system.”

“We commend the Department of Justice, the U.S. Attorney’s office, and the other state and federal agencies for their commitment to justice,” stated the Defense Health Agency. “Their efforts protect taxpayer dollars to ensure our service members, veterans and their families continue to receive the highest level of medical care.”

The United States contends in the civil settlement agreement signed by Sutter Health that under the terms of a contract which the Sutter Health hospital Alta Bates Summit Medical Center entered into with Navigant Network Alliance, LLC, Navigant referred urine toxicology specimens obtained from physicians and laboratories across the country to Sutter. Sutter submitted bills, or caused bills to be submitted, for reimbursement of the qualitative and quantitative testing it performed on the specimens. The United States asserts that Sutter did not perform the quantitative testing on thousands of specimens referred under the agreement and that these quantitative tests were instead performed by third-party labs. The United States alleges that Sutter nevertheless sought reimbursement for the tests. In the settlement agreement, the United States contends that between August 1, 2016, and June 30, 2017, Sutter billed for urine toxicology tests it did not perform and was paid for the testing by the Federal Employees Health Benefits Program, Medicare, Medicaid, and Tricare.

Sutter agrees in the settlement agreement to pay $13,091,452 to settle the false claims allegations. Of that amount, Sutter has already paid more than $6.5 million to the United States. Sutter agrees to pay the remaining amount of approximately $6.5 million to the United States within 30 days. The settlement agreement resolves the civil law claims that the United States might have brought based upon these allegations.

This matter is being handled by Assistant United States Attorney David DeVito, with assistance from Garland He, Jonathan Birch, Lillian Do, and Alan Lopez. The matter is the result of a coordinated investigation between the U.S. Attorney’s Office for the Northern District of California and the FBI, OPM OIG, HHS-OIG, DCIS, and the DHA.

The investigation and resolution of this matter illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The civil settlement agreement is neither an admission of liability by Sutter Health nor a concession by the United States that its claims are not well founded.

 

Oakland man sentenced to five years in prison for targeting minors online in sexual extortion scheme

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Had help from Concord man, his co-defendant; victims included eight minors between 11 and 14 years old

OAKLAND – Delaney Tang was sentenced today to 60 months in prison for solicitation of child pornography and conspiracy to commit cyberstalking in connection with a sexual extortion scheme, announced Acting United States Attorney Stephanie M. Hinds and Homeland Security Investigations Special Agent in Charge Tatum King. The sentence was handed down by the Hon. Haywood S. Gilliam, U.S. District Judge.

Tang, 22, of Oakland, pleaded guilty to the charges on April 28, 2021. The plea agreement describes how Tang used Instagram to harass, threaten, and successfully extort a 12-year-old victim into sending him nude photos and videos of herself. The agreement further describes how Tang provided instructions to the victim specifying what she must wear, say, and do in her photos and videos as well as how Tang also attempted to coerce the victim into filming a video of herself performing additional sex acts with an underage male. Tang received assistance executing the scheme from co-defendant Vincenz Sison, 21, of Concord. Sison attempted to convince the victim to comply with Tang’s extortion requests. Ultimately, Tang publicly posted to Instagram and other sites sexually explicit images and videos of the 12-year-old victim after she stopped responding to Tang’s requests for additional photos and videos.

The government’s memorandum regarding Tang’s sentencing further explains how Tang used Instagram to extort additional victims, including seven identified underage victims who were between 11 and 14 years old.

On February 10, 2021, the United States filed a criminal information charging Tang and Sison with conspiracy to commit cyberstalking, in violation of 18 U.S.C. §§ 371 & 2261A(2)(B), and charging Tang with an additional count of solicitation of child pornography, in violation of 18 U.S.C. § 2252A(a)(3)(B).  Tang pleaded guilty to both counts charged against him.

In addition to the prison term, Judge Gilliam ordered Tang to serve an eight-year period of supervision following his release from prison.  Tang will surrender to begin serving his sentence on January 19, 2022. Tang’s next scheduled appearance is on January 12, 2022, at 10:00 a.m., for a hearing to determine restitution for his victims.

For his part in the scheme, Sison pleaded guilty to conspiracy to commit cyberstalking on April 28, 2021. Judge Gilliam scheduled Sison’s sentencing for February 2, 2022, at 10:00 a.m.

Special Assistant U.S. Attorney Christopher Vieira is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of an investigation by the San Francisco Police Department and the Department of Homeland Security.

 

Brentwood woman owner of Emeryville tax preparation company charged with tax fraud

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Traci Austin and Emeryville Tax Services 2019 promo from their Facebook page.

Traci Austin allegedly aided in submission of more than 40 fraudulent tax returns and hosted “tax school” at which she taught prospective tax preparers how to compose fraudulent tax returns

Could face three years in prison and a $100,000 fine

By U.S. Attorney’s Office, District of Northern California, U.S. Department of Justice

OAKLAND – A federal criminal complaint unsealed today charges Traci Austin with aiding and assisting in the preparation of fraudulent tax returns, announced Acting U.S. Attorney Stephanie M. Hinds and Internal Revenue Service, Criminal Investigation, and IRS-Criminal Investigation Special Agent in Charge Mark H. Pearson.

The complaint describes Austin, 44, of Brentwood, CA, as the owner of a tax return preparation business called Emeryville Tax Services (“ETS”).  According to the complaint, Austin prepared materially false and fraudulent tax returns for her clients by including false and/or inflated Schedule A expenses, false and/or inflated Schedule C income and expenses, and false dependents.  By doing this, Austin fraudulently reduced her clients’ taxable income and tax liability, thereby resulting in larger refunds for the client and higher return preparation fee income for Austin.  The investigation has revealed that Austin allegedly assisted in the preparation of at least 42 fraudulent tax returns and an estimated tax loss of well over $697,000 to the federal government.

In addition to the false and fraudulent tax return preparation scheme, the complaint also alleges that since 2016, Austin has hosted a “Tax School” through ETS and charged a fee of at least $200 for students to attend the tax school.  According to the complaint, the goal of the tax school was to hire the attendees as preparers for ETS and prepare tax returns for ETS clients as well as the attendees’ own clients.  During the tax school, Austin allegedly instructed prospective tax preparers how to fraudulently manipulate tax returns to generate the maximum tax refund, and thus the maximum tax preparation fee by listing fictitious side businesses under Schedule C and fake business expenses on Schedule A, for example, the complaint describes how Austin taught her students how she created a fictitious dog grooming business for a client, created a fictitious profit and loss statement for the fake business, and how she instructed the client to print out some photos of dogs to support the idea of her fictitious business.

Austin is charged with aiding and assisting in the preparation of false and fraudulent federal income tax returns, in violation of 26 U.S.C. § 7206(2).

The charges in the complaint are merely allegations and the defendant is presumed innocent unless proven guilty in a court of law.

If convicted, Austin faces a maximum penalty of three years in prison and a $100,000 fine; however, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Austin made her initial federal court appearance this morning before United States Magistrate Judge Kandis A. Westmore.  Austin remains out of custody and her next scheduled appearance is at 10 a.m., on February 24, 2022, for a status conference before Magistrate Judge Westmore.

Assistant U.S. Attorney Abraham Fine is prosecuting the case with the assistance of Kay Konopaske and Helen Yee. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

 

Walnut Creek man, CEO of East Bay-based internet companies indicted on wire, securities fraud charges

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Alan K. Anderson arrested in connection with alleged scheme to raise money by creating false impression of profitability and sending false contracts to investors; companies market child-friendly services

SAN FRANCISCO – A federal grand jury has indicted Alan K. Anderson, charging him with wire fraud and securities fraud charges related to a scheme to use materially false and fraudulent pretenses to induce investors to make contributions to three businesses that were marketed as providing child-friendly internet services, announced Acting United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  alananderson_indictment USDOJ

The indictment filed October 13, 2021, and unsealed today, describes how Anderson, 59, of Walnut Creek, used misrepresentations to solicit investments for the three businesses.  According to the indictment, Anderson owned and controlled Imbee, Inc., a Delaware corporation based in Walnut Creek marketed as a child-friendly social media platform; Fanlala, a California corporation marketed as a service providing internet-based music streaming for children; and Fruit Punch, a California corporation marketed as providing music-streaming service for children.  The indictment alleges that beginning as early as April of 2010 through May of 2019, Anderson raised money for his companies by making false representations and creating false documents to support his bogus claims.  For example, the indictment alleges Anderson created fraudulent income statements and profit and loss statements and misrepresented the companies’ profitability to investors and potential investors; that Anderson created and altered contracts to represent falsely that one or more of his companies would be acquired by larger companies; and that Anderson created and altered contracts to make fraudulent claims that his companies created partnerships with other existing companies.  In addition, the indictment describes how Anderson emailed an investor to falsely claim Imbee was worth $21.6 million and that the investor owned 70% of the company.

In sum, the indictment charges Anderson with four counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of securities fraud, in violation of 15 U.S.C. §§ 78j(b) & 78ff and 17 C.F.R. 240.10b-5.  Anderson was arrested today in Walnut Creek.  He will make his initial federal court appearance tomorrow at 10:30a.m., before U.S. Magistrate Judge Thomas S. Hixson, in San Francisco.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, each count of wire fraud carries a maximum sentence of 20 years in prison and a maximum $250,000 fine. The securities fraud charge carries a maximum 20 years of imprisonment and a $5,000,000 fine.  In addition, the court also may order a term of supervised release, fines or other assessments, and restitution, if appropriate.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

In addition, in 2019, due to lies and misrepresentations he had made to previous shareholders, Anderson was issued a Desist and Refrain Order from the California Department of Business Oversight, preventing him from selling additional stock in Imbee, Inc. in the state “by means of any written or oral communication which includes untrue statements or omissions of material facts.”

Assistant U.S. Attorneys Christiaan Highsmith and Scott Joiner of the Office’s Corporate and Securities Fraud Section are prosecuting this case with the assistance of Claudia Hyslop, Morgan Byrne and Ralph Banchstubbs.  This prosecution is the result of an investigation by the FBI.

Allen Payton contributed to this report.

 

Acting U.S. Attorney announces major law enforcement initiative to combat violence, drug distribution by La Nuestra Familia gang

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Map of La Nuestra Familia’s Areas of Criminal Influence. Source: FBI San Francisco

“Operation Quiet Storm was one of the largest gang takedowns in FBI San Francisco division’s history,” charges 55 defendants, some from Contra Costa

Acting U.S. Attorney Hinds emphasizes focus on community engagement to root out drivers of violent crime

SAN FRANCISCO – Acting United States Attorney Stephanie M. Hinds held a press conference Thursday to announce the unsealing of federal charges filed against 55 defendants, many of whom were members of, or affiliated with, the Nuestra Familia prison gang and its subservient street gangs.  Acting U.S. Attorney Hinds was joined in making the announcement by Federal Bureau of Investigation Special Agent in Charge Craig D. Fair, Drug Enforcement Administration Special Agent in Charge Wade R. Shannon, California Department of Corrections and Rehabilitation Chief Office of Correctional Safety Derrick Marion, Santa Clara Sheriff Laurie Smith, and San Jose Deputy Chief of Police Elle Washburn.

The focus of the press conference was the unsealing of 17 charging documents, including 14 indictments and 7 criminal complaints, setting out a broad array of charges against the defendants.  DOJ NF indictment 082521 DOJ SJG indictment 081221 DOJ EHP indictment_081221

According to an FBI San Francisco tweet on Thursday, “Operation Quiet Storm was the culmination of more than 5 years of complex investigative work. The gangs targeted in this case are responsible for much of the illicit drug distribution and violent crime that has plagued areas throughout CA.”

“No single defendant is responsible for all the conduct I am describing,” said Hinds. “The charges against each defendant are described in a charging document that is unique to each defendant. By disrupting gang leadership, we reduce violence on our streets.  By removing violent actors and crime drivers from the streets, we make our neighborhoods safer.”

According to the documents unsealed today, La Nuestra Familia – Spanish for “Our Family”– was a prison gang operating in the California state prison system. Falling under the gang’s supervision are Norteño street gangs established in numerous cities and counties, and in jails and prisons, throughout Northern California and elsewhere. Several of the charging documents unsealed Thursday describe various aspects of the gang.  For example, one indictment (here (Leadership)) describes the largely-incarcerated leadership, while another (here (SJG)) describes the activities of a street gang called the San Jose Grande and yet another (here (EHP)) describes a group referred to as El Hoyo Palmas Street Gang. The picture that emerges is one of a violent and structured organization that finances its activities through crime and encourages its members to visit violence upon anyone who threatens the gang’s existence, including members who break gang rules, members who attempt to leave the gang, and rival gang members.

According to the documents unsealed Thursday, of the 55 defendants, 28 individuals were charged with racketeering crimes, while the remaining individuals were charged with drug trafficking and firearms offenses. Conspiracies alleged in the indictments include agreements to distribute drugs including heroine, methamphetamine, and cocaine; to commit armed robberies; and to commit murder.  Additional defendants were charged with other related crimes ranging from drug distribution to armed robbery.

According to a San Diego Union-Tribune report, “Prosecutors said 36 of the defendants were already in state prison and have been moved to federal holding facilities. Authorities have not said how many of the 19 remaining defendants were arrested in law-enforcement sweeps this week.”

Acting U.S. Attorney Hinds emphasized the goal to “fish with a spear, not a net.”

“Working with our federal and state, local, and tribal law enforcement partners, as well as impacted communities, our law enforcement efforts have focused on addressing violent crime-driven by gangs,” said Hinds.  “We will continue to work with our law enforcement partners, as well as members of our community, to identify and address the drivers of crime in our neighborhoods.  We intend to continue to deliver results by focusing on the needs of our communities.”

“Operation Quiet Storm was one of the largest gang takedowns in FBI San Francisco division’s history,” said FBI San Francisco Special Agent in Charge Fair.  “The coordinated efforts of this operation were done with one goal in mind: to disrupt the communications and organizational structure of a criminal network who has terrorized our neighborhoods for far too long.”

“Today’s operation strikes a substantial blow to Nuestra Familia leadership. This investigation revealed the wide-ranging influence of the gang that extends far beyond prison walls. It is clear they have hard and fast rules, and those who run afoul are met with intimidation and violence that spills into our communities,” said DEA Special Agent in Charge Shannon. “We will continue to look at these organizations structurally to disrupt and dismantle them.”

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

This case is being prosecuted by the Organized Crime Strike Force of the United States Attorney’s Office for the Northern District of California.  The prosecution is the result of an investigation by the FBI (San Francisco, Sacramento, and Phoenix Divisions) and the DEA, with the assistance of the Santa Clara County Sheriff’s Office, the California Department of Corrections and Rehabilitation, the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Santa Clara County District Attorney’s Office, and the San Jose Police Department, as well as the support of the Alameda County Sheriff’s Office, Antioch Police Department, Campbell Police Department, Fremont Police Department, King’s County Sheriff’s Office, Monterey County Sheriff’s Office, Mountain View Police Department, Sacramento Police Department, Salinas Police Department, Menlo Park Police Department, Santa Clara County Parole Department, Santa Clara County Probation Department, Santa Clara Police Department, Santa Cruz County District Attorney’s Office, Santa Cruz County Sheriff’s Office, Modesto Police Department, San Francisco Police Department, and Stanislaus County Sheriff’s Department, and Sunnyvale Department of Public Safety.

This investigation and prosecution are part of the Organized Crime Drug Enforcement Task Force (“OCDETF”), which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

 

Mexican prison gang Nuestra Familia’s leaders, members, associates charged with racketeering including some from Contra Costa

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Description of indictment by USDOJ against Nuestra Familia leaders, members and associates on Aug. 25, 2021.

Indictment describes the gang’s nexus of power overseeing thousands of members throughout California; Antioch Police Department assist in investigation

Involved in plots to murder 14 victims, plus robbery, drug trafficking and money laundering

SAN JOSE – A federal grand jury returned an indictment charging 17 defendants with racketeering conspiracy, including acts involving murder, robbery, drug trafficking, and money laundering, and charging five others with drug trafficking-related crimes.  The indictment handed down on August 25, 2021, and unsealed Thursday, September 16, 2021 catalogues a litany of crimes allegedly directed by the Nuestra Familia’s command structure incarcerated in California prisons.  The charging announcement was made by Acting United States Attorney Stephanie Hinds, Federal Bureau of Investigation Special Agent in Charge Crag D. Fair, and Drug Enforcement Administration Special Agent in Charge Wade R. Shannon at a press conference this morning. Also appearing at the press conference were Chief of the Office of Correctional Safety for the California Department of Corrections and Rehabilitation Derrick Marion, Santa Clara Sheriff Laurie Smith, and San Jose Deputy Chief of Police Elle Washburn. DOJ NF_indictment 082521

“The indictment charges all seven of the members who make up the Nuestra Familia’s ruling body: the General Council,” said Acting U.S. Attorney Hinds. “While the physical movement of this leadership was restricted by prison walls, the indictment alleges their power and influence were not so constrained. By disrupting gang leadership, we reduce violence on our streets.  By removing violent actors and crime drivers from the streets, we make our neighborhoods safer.”

“The arrests made yesterday, most significantly the arrests of the Nuestra Familia leadership, will severely cripple the ability of this criminal enterprise to continue to facilitate crimes in communities throughout the state and help break a decades-old cycle of violence,” said FBI San Francisco Special Agent in Charge Fair.

“Today’s operation strikes a substantial blow to Nuestra Familia leadership. This investigation revealed the wide-ranging influence of the gang that extends far beyond prison walls. It is clear they have hard and fast rules, and those who run afoul are met with intimidation and violence that spills into our communities,” said DEA Special Agent in Charge Wade R. Shannon. “We will continue to look at these organizations structurally to disrupt and dismantle them.”

According to the indictment, the 17 racketeering defendants were members and associates of the Nuestra Familia (“NF”) prison gang, a violent and lucrative organization formed in the 1960s.  The NF is alleged in the indictment to be a criminal enterprise that was created to organize, protect, discipline, profit from, and maintain the allegiance of gang members on the streets of and within custodial facilities in California.  As outlined in the indictment, membership in the NF involved a process of sponsorship, approval, and indoctrination.  The perpetration of violence and other crimes was ordinarily a prerequisite to entrance, continued membership, and advancement in the organization.  Once membership was achieved, this membership was for life.  The indictment alleges an NF oath provides: “If I lead, follow. If I stumble, push me. If I fall, avenge me. If I betray you, kill me.”

The indictment also describes the NF’s organizational structure and, in particular, the gang’s governing body: a seven-member “General Council,” made up of three Generals and a four-member Inner Council, which makes significant decisions and oversees the activities of the NF and its subservient gangs.  The indictment outlines each position according to the NF Constitution.  According to the NF Constitution, the Street Regiment General oversees the NF’s “overall street operations.”  The General of the Prisons is responsible for the NF’s “overall pinta [prison] functions,” and the General Advocates Office is the NF’s “justice department.”  Tiered just below these three NF Generals was the Inner Council, which consisted of four senior NF members who served as “advisors” to the Generals and provided a system of checks and balances.  All seven members of the NF’s General Council led the NF organization while incarcerated in the California prison system.  Each is charged in this indictment.

Further, the indictment describes the appointment by these leaders of NF members to positions of power over hierarchical and paramilitary structures called “regiments,” imposed on its gang members operating on the streets in California.  While the NF was composed of a relative few, it exercised control and wielded influence over thousands of subordinate gang members in counties and prisons throughout Northern California using such regiments.  These regiments primarily guaranteed the NF’s vast influence and control over its own and its street gang members, ensured avenues to direct violence and other illicit activity, and secured means for the NF to make money through the commission of criminal activity.

The NF oversaw such regiments in Contra Costa County, Santa Clara County, Monterey County, Santa Cruz County, San Benito County, San Francisco County, San Mateo County, Alameda County, Solano County, San Joaquin County, Fresno County, Kings County, Tulare County, Madera County, Merced County, Kern County, Sacramento County, Yolo County, Humboldt County, Shasta County, Lassen County, Tehama County, Butte County, Yuba County, Sutter County, Lake County, Placer County, and Sonoma County, as well as in Salinas Valley State Prison, Pelican Bay State Prison, Pleasant Valley State Prison, California State Prison – Solano, California State Prison – Sacramento, and High Desert State Prison.

According to the indictment, NF members and associates were involved in plots to kill 14 victims between April 2013 and July 2019 as part of the charged racketeering conspiracy.  The defendants charged in the alleged racketeering conspiracy include the following:

Defendant Age Charges Maximum Statutory Penalty
DAVID CERVANTES aka “DC” 73 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
ANTONIO GUILLEN aka “Chuco” 55 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
JAMES PEREZ aka “Conejo”

 

 67 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
SAMUEL LUNA aka “Sammy”

 

 46 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
GUILLERMO SOLORIO aka “Capone”

 

 42 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
TRINIDAD MARTINEZ aka “Trino”

 

 41 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
GEORGE FRANCO aka “Puppet”

 

 56 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
STEVEN TRUJILLO aka “Esteban”

 

 56 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
SALVADOR CASTRO aka “Gangster”

 

 51 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
BRYAN ROBLEDO aka “Turtle” 48 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
ALEX YRIGOLLEN aka “Sleepy”

 

 52 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
JUAN SOTO aka “Drifter”

 

 38 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
EDGARDO RODRIGUEZ aka “Big Evil”

 

 41 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
ROBERT MALDONADO aka “KJ”

 

 46 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
ERIC ZARATE aka “Baby G”

 

 43 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
ROCKY BRACAMONTE aka “Fox”

 

 37 18 U.S.C. § 1962(d) – Racketeering Conspiracy Life
JOSHUA CORTEZ aka “Buddah”

 

 28 18 U.S.C. § 1962(d) – Racketeering Conspiracy 20 years

Also charged in the indictment are defendants who allegedly participated in two conspiracies to possess and distribute methamphetamine, one in May of 2019 and the other in September 2020 to March 2021.  The charges pending against these defendants are as follows:

Defendant Age Charges Maximum Statutory Penalty
WILLIAM RODRIGUEZ aka “Negro” 34 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine At least 5 years, up to 40 years
MARVIN RODRIGUEZ 34 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine

 

 At least 5 years, up to 40 years
CRISTIAN MORA aka “C-Fresh” 28 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine

 

 At least 5 years, up to 40 years
MARTIN JOSEPH RUPPEL JR. 42 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine

 

 At least 5 years, up to 40 years
ANAELISA CUEVAS 35 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine At least 5 years, up to 40 years

The court also may order additional terms of supervised release, fines, and restitution.  Nevertheless, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The defendants are scheduled to make initial federal court appearances before U.S. Magistrate Court Judge Nathanael Cousins and U.S. Magistrate Court Judge Sallie Kim today.

This case is being prosecuted by the Organized Crime Strike Force of the United States Attorney’s Office for the Northern District of California.  The prosecution is the result of an investigation by the FBI (San Francisco, Sacramento, and Phoenix Divisions), the DEA, the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the U.S. Marshal Service, with the assistance of the Santa Clara County Sheriff’s Office, the California Department of Corrections and Rehabilitation, the Santa Clara County District Attorney’s Office, and the San Jose Police Department, and with support from the Alameda County Sheriff’s Office, Antioch Police Department, Campbell Police Department, Fremont Police Department, King’s County Sheriff’s Office, Monterey County Sheriff’s Office, Mountain View Police Department, Sacramento Police Department, Salinas Police Department, Menlo Park Police Department, Santa Clara County Parole Department, Santa Clara County Probation Department, Santa Clara Police Department, Santa Cruz County District Attorney’s Office, Santa Cruz County Sheriff’s Office, Modesto Police Department, San Francisco Police Department, the Stanislaus County Sheriff’s Department, and Sunnyvale Department of Public Safety.

This investigation and prosecution are part of the Organized Crime Drug Enforcement Task Force (“OCDETF”), which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

 

Contractor from Orinda sentenced to two years in federal prison for bribing SF public official over seven years

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Also fined $127,000; defendant bribed former SF DPW Director Mohammed Nuru with money, meals and gifts – including a tractor

“Varela’s conduct with Nuru was business as usual for Varela.”

By U.S. Attorney’s Office for the Northern District of California

SAN FRANCISCO – Alan Varela was sentenced Thursday, Sept. 16, 2021 in federal court to 24 months in prison and ordered to pay a $127,000 fine for a seven-year conspiracy to commit honest services wire fraud by bribing a San Francisco public official, announced Acting United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable William H. Orrick, United States District Judge.

A federal complaint filed September 17, 2020, charged Varela, 60, of Orinda, and William Gilmartin, 61, of San Mateo, with bribery of a public official.  In 1991, Varela founded ProVen Management, a Bay Area civil engineering and construction firm that engaged in large scale infrastructure projects.  Varela and Gilmartin acted as the firm’s president and vice-president, respectively, during the conspiracy time period.  According to the complaint, Varela and Gilmartin provided a stream of benefits to Mohammed Nuru, then the Director of San Francisco’s Department of Public Works (DPW), in exchange for favorable treatment of their business interests, including non-public inside information.

Upon entering his guilty plea to conspiring to commit honest services wire fraud on May 27, 2021, Varela described in his plea agreement his role in the bribery conspiracy of then-DPW Director Nuru.  The bribery’s goal was to use Nuru’s prominence as a powerful San Francisco public official to ensure the success of Varela and his co-conspirators’ business ventures.  Nuru’s position as DPW Director provided him with great influence over San Francisco public contracts, permits, and construction projects, as well as over other City departments and private companies seeking DPW contracts.  In his plea agreement, Varela admitted that for seven years, from 2013 until the day of Nuru’s arrest on federal charges January 27, 2020, he conspired with his co-defendant Gilmartin, with Balmore Hernandez – a construction company CEO who pled guilty earlier and is cooperating with the FBI – and with others to pay bribes to Nuru consisting of cash, free meals and entertainment, equipment for Nuru’s ranch, and the prospect of a cut of future profits from expected City contracts.

Varela’s plea agreement detailed a scheme in which he and his co-conspirators focused on winning a lucrative DPW contract and its related Port of San Francisco lease to operate an asphalt recycling plant and a concrete plant on the Port’s land.  The plea agreement describes that Nuru agreed, in exchange for cash and other valuables, to use his official position to get Varela and his co-conspirators’ proposal selected.  Gilmartin arranged to compensate Nuru by asking an unnamed company to award a $100,000 contract to Hernandez and, in turn, Hernandez used the contract’s proceeds for Nuru.  For his part, Nuru sent early drafts of San Francisco’s Request for Proposals for the project and other inside information to the conspirators to improve their likelihood of being selected.  Nuru also regularly discussed the plans and inside information with Gilmartin and Hernandez over expensive restaurant dinners, always paid for by Gilmartin and ultimately totaling approximately $20,000.

The conspirators’ proposal was selected in September 2015.  According to the plea agreement, Nuru continued to meet with the group to supply additional inside information during the expensive meals paid for by Gilmartin.  At one of their meetings, Nuru requested a tractor for his ranch.  Varela coordinated with Gilmartin and Hernandez to deliver the tractor to Nuru.

Nuru was arrested on federal bribery-related charges on January 27, 2020, before the negotiations to finalize the asphalt recycling plant agreements with DPW and the Port of San Francisco reached completion.

In a filed memorandum addressing Varela’s sentencing, the government argued that Varela’s conduct with Nuru was business as usual for Varela.  The government asserted that Varela, whose business success had gained him a life of luxury including 50 acres in Napa, for years facilitated a casual culture of corruption, a culture that ultimately undermines the public’s faith in their government and the rule of law.  Elaborating on the tractor bribe, the sentencing memorandum points out that the value of the new John Deere tractor, including its attachments, approximated $40,000.  Varela lined up the purchase of the tractor and rushed to get it delivered to Nuru at Nuru’s ranch on February 18, 2019.  The delivery led to Nuru to happily text “Work begins at the ranch” along with a photo of the tractor being unloaded at his ranch. The government, after outlining this and other acts of bribery, submitted a sentence recommendation of 30 months imprisonment.

This case is part of a larger federal investigation targeting public corruption in the City and County of San Francisco.  To date, eleven individuals have been charged, including two high-ranking San Francisco public officials, Mohammed Nuru and Harlan Kelly.  Multiple city contractors and facilitators have been charged.  According to the charges earlier filed against Mohammed Nuru and others, Nuru allegedly took hundreds of thousands of dollars in bribes in cash, meals, and work on his vacation home from contractors who obtained San Francisco public contracts.  Allegations in the complaint filed against Harlan Kelly assert he received thousands of dollars in airfare, meals, jewelry, and travel expenses, along with repair work on his house.

In addition to the prison term and fine, United States District Judge Orrick also sentenced the defendant to a three-year period of supervised release.  Varela will begin serving his sentence on January 2022.

The case is being prosecuted by the Corporate and Securities Fraud section of the U.S. Attorney’s Office. The case is being investigated by the FBI.

 

Richmond man pleads guilty to producing child pornography

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Defendant recorded videos of him having sex with 16-year-old girl; admits to other sex crimes; faces 15 to 30 years in prison and $250,000 fine

By U.S. Attorney’s Office for the Northern District of California

OAKLAND – Ranbir Singh pleaded guilty Wednesday, Sept. 15, 2021 in federal court in Oakland to the production of child pornography, announced Acting United States Attorney Stephanie M. Hinds and Homeland Security Investigations Special Agent in Charge Tatum King.

In his plea agreement, Singh, 47, of Richmond, admitted that on March 13, 2013, he had sexual intercourse in an Alameda County hotel room with a female whom he knew to be 16 years old at the time.  The plea agreement describes that Singh set up a video camera in the hotel room before the intercourse began.  Singh admitted that he persuaded the minor female to engage in sexual intercourse for the purpose of recording it.  He made multiple video recordings of his sex with the minor female over the next several hours.  At one point the minor female protested the ongoing sexual intercourse, but Singh continued despite her protests.  During the recordings of the sexual acts, Singh admitted that he positioned the camera so that the video would record the sexual acts.

Singh also admitted in his plea agreement that earlier, in January 2013, he video recorded the same minor female sitting in a car’s backseat with her hands restrained behind her back by handcuffs.  She was topless.

Singh further admitted that in May 2013 he traveled with a different minor female to a casino hotel in Placer County.  Singh admits that he knew this female was a minor.  The plea agreement describes that in a hotel room at the casino Singh had sexual intercourse with the minor female, after he showed her a video he recorded depicting his sexual intercourse with the minor female in the Alameda County hotel room on March 13, 2013.

The initial federal charges were brought against Singh in a complaint filed March 1, 2021.  The complaint reflects that the investigation began when the two minor female victims came forward, though initially they did not know Singh’s true name, and later developed when the sexually explicit videos were discovered.

Singh was indicted on March 23, 2021, on the charge of production of child pornography in violation of 18 U.S.C. 2251(a).  The maximum penalty for a violation of production of child pornography in violation of 18 U.S.C. 2251(a) is imprisonment for 30 years, with a minimum mandatory term of imprisonment of 15 years, and a fine of $250,000.  However, any sentence will be imposed by a court only after the court’s consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Singh’s sentencing hearing is scheduled for December 8, 2021, in Oakland federal court before the Honorable Haywood S. Gilliam, Jr., United States District Judge.  Singh remains in custody awaiting sentencing.

According to localcrimenews.com, Singh was also arrested by Richmond Police in January for Disobeying a Domestic Relations Court Order.

Jonathan U. Lee is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Leeya Kekona, Kay Konopaske, and Kathleen Turner.  The prosecution is the result of an investigation by Homeland Security Investigations and the Richmond Police Department.

Allen Payton contributed to this report.

 

San Quentin prison guard from Pittsburg, two others charged in Death Row contraband smuggling scheme

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San Quentin State Prison. Photo by CA Dept. of Corrections.

“The charge carries a maximum sentence of 20 years in prison and a $250,000 fine.”

SAN FRANCISCO – Keith Christopher and Isaiah Wells appeared in federal court today to face the charge of conspiracy to commit honest services fraud using interstate wires, announced Acting United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  A third co-defendant, Tanisa Smith-Symes, will appear tomorrow in federal court in Las Vegas, Nevada, where she was arrested today.

According to the complaint, Christopher, 37, of Pittsburg, California, Smith-Symes, 45, of Las Vegas, Nevada, and Wells, 32, of Tracy, California, conspired to smuggle cell phones into San Quentin State Prison’s East Block, where condemned inmates are housed.  Cell phones create safety and security risks for prison employees and other inmates, and state law deems them contraband and prohibits their possession by inmates.  Christopher is a Corrections Officer at San Quentin State Prison in Marin County.  The complaint alleges that Smith-Symes worked with a Death Row inmate with whom she had a relationship to obtain the contraband phones and ship them to Wells, who then provided the phones to Christopher, who in turn smuggled them into the prison.  Using this scheme, the complaint alleges that the conspirators successfully smuggled at least 25 phones into the prison and that the inmate working with Smith-Symes sold the phones inside the prison for up to $900 each.  Smith-Symes sent bribery payments to Christopher through Wells and others whom Christopher had appointed to receive the money.  The complaint further alleges that Christopher charged $500 as payment for each phone he smuggled into the prison.

The complaint filed against Christopher, Smith-Symes, and Wells charges each defendant with one count of conspiracy to commit honest services fraud using interstate wires in violation of 18 USC §§ 1343, 1346, and 1349.  The charge carries a maximum sentence of 20 years in prison and a $250,000 fine.  Any sentence following conviction, however, is imposed by a court only after the court’s consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 USC § 3553.

Christopher and Wells appeared today on the charges before United States Magistrate Judge Sallie Kim, who sits in San Francisco.  They were released on bond and are scheduled to next appear in federal court on September 17, 2021.

Charges contained in a criminal complaint are mere allegations.  As in any criminal case, the defendants are presumed innocent unless and until proven guilty in a court of law.

The prosecution is the result of an investigation by the FBI and the California Department of Corrections and Rehabilitation’s Office of Internal Affairs.