Month: April 2022

Source: United States Department of Justice News

          LOS ANGELES – A real estate developer has agreed to plead guilty to a federal criminal charge for offering to buy a million-dollar home for a Los Angeles County public official in exchange for the official’s assistance securing a $45 million county lease for the developer, the Justice Department announced today.

          Arman Gabaee, 61, a.k.a. “Arman Gabay,” of Beverly Hills, has agreed to plead guilty to one count of bribery, a crime that carries a statutory maximum sentence of 10 years in federal prison.

          Gabaee is scheduled to enter his guilty plea on May 2 before United States District Judge George H. Wu, and also has agreed to pay a fine of at least $1,149,000 and any restitution ordered.

          According to his plea agreement, Gabaee was a co-founder and co-managing partner of the Charles Company, a Hollywood-based commercial and residential real estate development firm. The then-county official whom Gabaee bribed was Thomas M. Shepos, 72, of Palmdale, who worked in Los Angeles County’s Real Estate Division and was involved in awarding contracts to real estate developers and contractors.

          Beginning no later than 2011 and continuing until April 2017, Gabaee paid Shepos bribes and kickbacks of approximately $1,000 per month in exchange for county leases, preferential contract terms, non-public information and other benefits. From December 2016 when Shepos began cooperating to April 2017, Gabaee paid Shepos $6,000 in cash bribes during meetings Shepos secretly recorded at the direction of the FBI.

          Further, in 2017, Gabaee offered to buy Shepos a Northern California residence – then worth more than $1 million – in exchange for Shepos’ assistance securing a county lease in the Hawthorne Mall, which Gabaee owned and was redeveloping. Gabaee wanted the county to enter into a 10-year, $45 million lease for county departments to rent office space in the Hawthorne Mall.

          During other secretly recorded meetings with Shepos, Gabaee first offered to purchase him a home listed at $1,199,000 in Sonoma County. Upon learning that this property was already in escrow, Gabaee offered to buy Shepos a different house, listed at $1,095,000, and also located in Sonoma County. Gabaee placed two offers on this property, first for $1,035,000 and later for $1,065,000. Gabaee admitted in his plea agreement that he rescinded the second offer hours after he made it because FBI agents had approached and informed him that they were aware of his bribes to Shepos.

          Shepos pleaded guilty in November 2018 to one count of making false statements to federal investigators who were investigating his financial relationship with Gabaee and one count of subscribing to a false tax return related to payments he received from Gabaee. Shepos is scheduled to be sentenced on June 27.

          The FBI investigated this matter.

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

Source: United States Department of Justice News

Miami, Florida – A 29-year-old Mexican national living in Boca Raton and Pompano Beach, Florida was sentenced yesterday in West Palm Beach federal court to 25 years in prison for posing on social media as a nine-year-old girl named “Sophia 12901,” encouraging young children to produce sexual exploitation material, trading child sexual exploitation material with others online, and being in the United States illegally.  

In 2020, Andres Rivera Reyes used a social media messenger application to find young girls for live video chats.  During the chats, Reyes would try to convince the children to take pornographic images of themselves.  A law enforcement investigation revealed that from January to May 2020, Reyes had engaged in these interactions with dozens of girls who were between eight and 12-years-old.  The investigation also revealed that Reyes had over 5,000 images and videos of child sexual exploitation material in his cellular telephone and that he exchanged this material with others using social media applications.  Reyes was previously removed from the United States in 2013 and was in the country illegally when he committed these crimes.

On August 19, 2021, Reyes pled guilty to one count of attempted production of child pornography, two counts of receipt of child pornography, one count of distribution of child pornography, one count of possession of child pornography, and one count of illegal reentry after removal.

In addition to his 25-year prison sentence, Reyes will be placed on supervised release for the remainder of his life as a registered sex offender.  He was also ordered to pay in excess of $160,000 restitution to victims.

Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, FBI Miami announced the sentence imposed by U.S. District Judge Robin L. Rosenberg.

FBI Miami’s West Palm Beach Office investigated this child exploitation case, with assistance from Homeland Security Investigations (HSI), Miami’s West Palm Beach Office and the Lincoln Police Department of Lincoln, Nebraska.

Assistant U.S. Attorney Gregory Schiller prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-80064.

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Source: United States Department of Justice News

NEWARK, N.J. – A Somerset County, New Jersey, man today admitted his role in a drug trafficking network that was responsible for the importation of large quantities of heroin into New Jersey, U.S. Attorney Philip R. Sellinger announced.  

William T. Bouza, 45, of Watchung, New Jersey, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with conspiracy to distribute heroin and possession of heroin with intent to distribute.

According to documents filed in this case and statements made in court:

In February 2019, Bouza arranged for a vehicle that was equipped with a secret compartment, or “trap,” containing 15 kilograms of heroin, to be shipped from California to a location in Union County. Law enforcement intercepted the vehicle, seized the narcotics, and identified Bouza as the intended recipient. In the following months, law enforcement determined that Bouza was storing and processing narcotics for street-level distribution at multiple locations in Essex County. In October 2019, Bouza was apprehended. Law enforcement subsequently discovered more than 1,000 packages, or “bricks” of heroin, each containing approximately 50 individual doses, in one of Bouza’s stash-houses. In total, law enforcement seized over 18 kilograms of heroin belonging to Bouza.

The controlled substances offenses carry a maximum penalty of life in prison, a mandatory minimum term of 10 years in prison and a $10 million fine. Sentencing is scheduled for Sept. 13, 2022.

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

U.S. Attorney Sellinger credited law enforcement officers with the United States Department of Homeland Security – Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, the New Jersey State Police, and other law enforcement agencies within the Opioids Task Force with the investigation.

The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.

Source: United States Department of Justice News

KNOXVILLE, Tenn. – On April 26, 2022, following a six-day trial in United States District Court, Knoxville, Tenn., a jury convicted Bryan Cornelius, 31, of Knoxville, Tennessee, of Conspiracy to Distribute over 50 grams of Methamphetamine, Conspiracy to Distribute over one kilogram of heroin and over 40 grams of Fentanyl, Conspiracy to Distribute over 100 kilograms of marijuana, Conspiracy to commit Money Laundering, Distributing over 50 grams of Methamphetamine, and Possession and Discharge of a Firearm in furtherance of his drug trafficking crimes. 

Sentencing for Cornelius is set for October 3, 2022, at 2:00 p.m., in the United States District Court before United States District Court Judge Thomas A. Varlan, in Knoxville, Tennessee.  Cornelius faces a sentence of life in prison.

The evidence presented at trial included wiretaps of multiple cellular phones, multiple search warrants at various Knoxville residences, narcotics, firearms, and cash seizures.  The evidence showed that Cornelius, a member of the Gangster Disciples street gang, was ordering narcotics from different sources of supply in California and receiving packages of methamphetamine and marijuana through the United States Postal Service (USPS), Fed-Ex, and UPS throughout 2019 and that he maintained multiple addresses across Knoxville to stash his narcotics, firearms, and cash to facilitate his narcotics distribution.  In addition, the evidence showed that, in furtherance of his drug trafficking, at approximately 2:45 p.m. on November 21, 2019, Cornelius, along with two others, drove by the Stop-n-Go on Brooks Avenue and Cornelius fired fifteen rounds of 7.62mm into a Mercedes-Benz.  The driver sustained two non-life-threatening gunshot wounds. 

Cornelius was the one defendant in a 23-person indictment who proceeded to trial; all other defendants entered guilty pleas.

Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Cornelius included the Federal Bureau of Investigation (FBI) HIDTA Task Force and the United States Postal Inspection Service (USPIS).  The FBI HIDTA Task Force includes the Roane County Sheriff’s Office, Knoxville Police Department, Knox County Sheriff’s Office, Blount County Sheriff’s Office, and Sevier County Sheriff’s Office.  The Tennessee Bureau of Investigation, the Drug Enforcement Administration, also assisted in this investigation by conducting drug analysis on seized narcotics in the case.  

“This prosecution is part of the Department of Justice’s comprehensive strategy to reduce violence and increase safety in the community by prosecuting violent criminals who use firearms in furtherance of their distribution of highly addictive and dangerous drugs, such as fentanyl and methamphetamine,” said United States Attorney Francis M. Hamilton III.

“Illegal drugs are the scourge of society and the cause of devastation for many families. The FBI, along with our federal, state, and local law enforcement partners are committed to identifying, disrupting, and holding those accountable who are responsible for harming our communities through their illegal activities,” said FBI Special Agent in Charge Joe Carrico. 

“The Postal Service has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute illegal drugs or other harmful substances,” said Tommy D. Coke, U.S. Postal Inspector in Charge of the Atlanta Division. “We will continue to work with our law enforcement partners to keep dangerous drugs out of the communities we serve.”

Assistant U.S. Attorneys Cynthia Davidson and Alan Kirk represented the United States at trial.

This case was part of the Department’s Organized Crime Drug Enforcement Task Force (OCDETF) and the HIDTA programs.  OCDETF is the primary weapon of the United States against the highest-level drug trafficking organizations operating within the United States, importing drugs into the United States, or laundering the proceeds of drug trafficking. The HIDTA program enhances and coordinates drug control efforts among local, State, and Federal law enforcement agencies. The program provides agencies with coordination, equipment, technology, and additional resources to combat drug trafficking and its harmful consequences in critical regions of the United States.

This case is also part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders working together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

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Source: United States Department of Justice News

Remarks as Delivered

Thank you so much, Damian, and good afternoon, everyone. We are here today because of the swift action of the prosecutors of the Southern District of New York working with federal, and state and local law enforcement partners. We are here today to hold accountable multiple corporate executives from Archegos Capital Management, whose alleged crimes jeopardized not only their own company, but also innocent investors and financial institutions around the world. 

Let me just make a few points.

First, I am in New York today because this is exactly the kind of criminal case that the Department of Justice should prioritize — and we will continue to do so. I want to commend the incredible hard work of the women and men of the Southern District of New York, of the FBI and our law enforcement partners, not just for their exceptional investigative work, but for the speed with which they have conducted this investigation. 

Cases against corporate executives are among the most complex that the Department of Justice brings. And the Southern District of New York continues to spearhead these types of investigations, and the department’s leadership is committed to ensuring that this office and others across the country have the resources to bring even more. 

Second, this announcement reflects the Justice Department’s continued effort to impose individual accountability on those who commit corporate crime. 

As the Attorney General and I have made clear, it is unambiguously this department’s first priority in corporate criminal matters to prosecute the individuals who commit corporate crime and who profit from corporate malfeasance – including when those individuals occupy the C-Suite. 

We will hold accountable those that break the law, and we will promote respect for the laws designed to protect investors, consumers and employees.   

Finally, this case reaffirms that when executives commit crimes, those crimes — and that conduct — affect companies and ordinary citizens alike. 

As I know from my own experience as a prosecutor, this kind of crime — the kind that leaves a financial crater in its wake — this kind of crime jeopardizes pensions, savings and jobs. 

We are committed to doing all we can to root out corruption in financial markets and to hold accountable those who perpetrate fraud on the investing public.  

Now let me turn it back over to the U.S. Attorney.