Month: May 2022

Source: United States Department of Justice News

PORTLAND, Ore.—An Idaho man who formerly supervised order-fulfillment and warehousing operations for the Jacklin Seed Company, a Liberty Lake, Washington producer and marketer of grass seed and turfgrass, has been charged for his role in multiple schemes to defraud the J.R. Simplot Company and Jacklin, its former subsidiary.

Richard Dunham, 64, a resident of Hayden Lake, Idaho, has been charged by federal criminal information with two counts of conspiracy to commit wire fraud.

According to court documents, from 1997 until its sale in 2020, the J.R. Simplot Company, a major privately held supplier of agricultural products headquartered in Boise, Idaho, owned and operated Jacklin. During this time, much of Jacklin’s business operations, including a seed-blending and warehousing facility, were located in and around Albany, Oregon. Dunham, who supervised Jacklin’s Albany operations, had the authority to purchase grass seed from certain Oregon growers over others.

At some point between 2013 and 2015, Dunham, Jacklin general manager Christopher Claypool, 53, of Spokane, Washington, and others realized that growers’ preference for higher-yield grasses was creating substantial shortages of lower-yield varieties Jacklin had contracted to deliver to its customers. Dunham and Claypool recognized that these shortages would either cause Jacklin to fail to deliver on its existing contracts or require Jacklin to pay a premium to growers to acquire necessary inventory, substantially eroding company profits. The pair anticipated that either result would negatively affect their careers.

From January 2015 and continuing until at least the summer of 2019, Dunham and Claypool directed Jacklin employees, at the Albany facility and elsewhere, to fulfill customer orders with different varieties of grass seed than the customers had ordered, to conceal such substitutions from the customers, and to invoice the customers as though no substitutions had taken place. Together, they referred to this scheme as “getting creative.”

To conceal the unauthorized substitutions, Dunham and Claypool directed Jacklin employees to package the substitute seed varieties with false and misleading labels. They also directed employees to invoice the customers under the original terms of their contracts, notwithstanding the unauthorized substitutions. As a result of this scheme, Simplot refunded or credited more than $1.5 million to defrauded buyers.

During the same time, Dunham and Claypool also agreed to import mislabeled seeds from Moore Seeds, a Jacklin supplier based in Debolt, Alberta, Canada, to offset the shortage of one of Jacklin’s best-selling grass seed blends. In doing so, Dunham conspired with Raymond Walker, 60, a resident of Debolt and Moore’s managing director, to purchase a less expensive seed blend at above-market rates in exchange for Walker falsely labeling the seed as Jacklin’s premier blend and shipping it, under that false pretense, to Jacklin in Oregon.

In additional to the undisclosed seed substitutions, Dunham engaged in another scheme while employed with Jacklin. Beginning in April 2015, Dunham conspired with Gregory McCarthy, the owner of Ground Zero Seeds, a grass seed production and wholesale company based in Yamhill, Oregon that regularly did business with Jacklin. Dunham and McCarthy, who were longtime friends, agreed that Ground Zero would pay Dunham a per pound kickback for grass seed purchased by Jacklin. These kickbacks were built into the prices reflected on Ground Zero’s invoices to Jacklin and, between April 2015 and September 2019, caused Ground Zero is pay Dunham more than $191,789.

In facilitating their scheme, Dunham and McCarthy regularly corresponded by email, referring to Ground Zero’s kickbacks to Dunham as “shoes” or contributions to his “shoe fund.” To conceal their scheme, Dunham maintained an LLC through which he claimed to provide consulting and brokering services. Dunham negotiated kickbacks and fees from Ground Zero and other Jacklin suppliers through the LLC’s business checking account.

Dunham made his initial appearance in federal court today before U.S. Magistrate Judge Stacie F. Beckerman. He was released pending further court proceedings.

On July 7, 2021, Claypool was sentenced to three years in federal prison and three years’ supervised release after previously pleading guilty to conspiracy to commit wired fraud and money laundering.

On March 3, 2022, McCarthy was charged with conspiracy to commit wire fraud. He was arraigned on March 15, 2022 in Portland and released pending a two-day jury trial scheduled to begin on July 26, 2022.

In September 2021, in a separate criminal case, ProSeeds Marketing, Inc., a Willamette Valley grass seed distributor, pleaded guilty after knowingly concealing a scheme to defraud Jacklin. On November 29, 2021, the company was sentenced to a year of probation, a $5,000 fine, and more than $78,000 in restitution.

U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.

This case was investigated by IRS-Criminal Investigation and the U.S. Department of Agriculture Office of Inspector General. It is being prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.

Source: United States Department of Justice News

A New Jersey man pleaded guilty today to filing a false corporate tax return with the IRS.

According to court documents and statements made in court, Gabriel Ferrari, of Edison, owned Buses and Trucks Inc. (B&T), an automotive repair business located in Edison. Ferrari used B&T funds to pay for personal items, including gambling on horse races. He did not inform his tax preparer about the diverted corporate funds for tax years 2011 through 2014 and, as a result, B&T’s corporate tax returns and his personal income tax returns for each of these years were false.

Ferrari is scheduled to be sentenced on Sept. 14 and faces a maximum penalty of three years in prison for filing a false tax return. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-Criminal Investigation investigated the case.

Trial Attorney Ann M. Cherry of the Tax Division and Assistant U.S. Attorney Andrew Trombly of the U.S. Attorney’s Office for the District of New Jersey are prosecuting the case.

Source: United States Department of Justice News

Note: To download fugitive reward posters in English and Spanish, click on: Tito Montes Bobadilla, Herlinda Bobadilla, and Juan Carlos Montes Bobadilla.

Today, the U.S. Department of State announced a reward of up to $5 million each for information leading to the arrest and conviction of three Honduran nationals indicted in the Eastern District of Virginia on charges stemming from their roles as leading figures in a drug-trafficking operation.

On Oct. 8, 2015, a federal grand jury returned an indictment charging Tito Montes-Bobadilla, aka Alejandro Montes-Bobadilla or Pimpi, 32; Herlinda Bobadilla, aka Erlinda Ramos-Bobadilla or Chinda, 61; Juan Carlos Montes-Bobadilla, aka Mono, 35; Noe Montes-Bobadilla aka Ton, 38; and two others with conspiracy to distribute five kilograms or more of cocaine. The Department of State is offering $5 million for information leading to the arrest and/or conviction of Tito Montes-Bobadilla, Herlinda Bobadilla, or Juan Carlos Montes Bobadilla. The three Bobadillas are currently fugitives and are believed to be armed and dangerous.

According to court documents and allegations in the indictment, from 2006 until the date of the indictment, Juan Carlos Montes-Bobadilla, his mother Herlinda Bobadilla, and his brother Tito Montes-Bobadilla allegedly were leaders in the Montes-Bobadilla drug-trafficking organization (DTO), or “Los Montes,” one of the largest drug cartels in Honduras. Noe Montes-Bobadilla led the Montes DTO prior to his arrest and extradition to the United States in 2017. Noe Montes-Bobadilla’s brothers, Tito Montes-Bobadilla and Juan Carlos Montes-Bobadilla, allegedly led cells within the DTO with their own supply and distribution networks. Their mother, Herlinda Bobadilla, allegedly assisted her sons in the importation, transportation, and distribution of cocaine. Through these efforts, the Montes DTO allegedly distributed thousands of kilograms of cocaine destined for the United States.

The Montes DTO allegedly had its base of operations around Francia, Honduras, in the Department of Colón. The Montes DTO allegedly received shipments of cocaine via boats, clandestine aircraft, and even submarines by South American suppliers. Individual shipments allegedly carried hundreds of, and sometimes more than a thousand kilograms of cocaine. The Montes DTO allegedly worked closely with other drug-trafficking organizations to import the cocaine in Honduras and transport it north through Central America and Mexico to the United States.

After his extradition, Noe Montes-Bobadilla was convicted, and, in April 2019, sentenced to 37 years’ imprisonment on the drug-trafficking charge.

If you have information regarding this case, please contact the U.S. Drug Enforcement Administration (DEA) at +504-9452 4032 or +504-9430 7106, which can accept messages from the social messaging applications WhatsApp and Signal, or by email at Montes.tips@usdoj.gov. If you are located outside of the United States, please contact the nearest U.S. Embassy or Consulate. If in the United States, please contact the local DEA office in your city.

Assistant U.S. Attorneys James L. Trump, Thomas W. Traxler, and Anthony Aminoff of the Eastern District of Virginia and Trial Attorneys Teresita Mutton and Douglas Meisel of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case. The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Noe Montes-Bobadilla. 

This case is being investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) Operation Harpoon.

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

Source: United States Department of Justice

Nery A. Martinez Vasquez, 54, and Maura N. Martinez, 54, both of Shasta Lake, California, were both sentenced today for conspiring to subject three victims to forced labor, a crime to which the defendants had previously pleaded guilty. Vasquez was sentenced to six and a half years in prison and Martinez was sentenced to three years in prison. Both defendants were also sentenced to three years of supervised release and a fine of $25,000. The couple was also required to pay $300,000 in restitution to seven total victims. Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division and U.S. Attorney Phillip A. Talbert for the Eastern District of California made the announcement.

According to court documents, from September 2016 to February 2018, the defendants — who owned and operated a restaurant and janitorial service — used various coercive means to force their victims into working long hours of physically demanding work, seven days a week, for minimal to no pay. In August 2016, the defendants convinced the victims, a Guatemalan relative and her two minor daughters, ages 15 and 8, to come to the United States by falsely promising the victims a better life and arranging for them to enter the United States and overstay their temporary visitor visas. The defendants then conspired with each other to impose an inflated debt on the victims that they required the victims to pay back through working for them. When the adult victim complained and expressed an interest in leaving, the defendants threatened to have the victims arrested for overstaying their visas unless they continued working the same long hours, seven days a week, for little pay. Similarly, the defendants kept the two minor victims working at their businesses instead of attending school by telling the victims that immigration authorities would find and arrest them if the minor victims attempted to go to school. The defendants housed the victims in a dilapidated, unheated trailer with no running water, and degraded and humiliated them in front of others. Finally, the defendants used force and threats of force to intimidate the victims.  For instance, Nery Martinez Vasquez beat the children with a stick that had the children’s name and nickname written on it along with the phrase “what goes up, must come down.”

“These defendants used the promise of a better life to lure a mother and her children to travel to the United States, only to betray their familial relationship and exploit the victims’ precarious situation to cruelly oppress and degrade them, and to turn a profit off their backs,” said Assistant Attorney General Clarke. “Forced labor has no place in our civilized society. This sentencing makes clear our commitment to holding perpetrators accountable and our dedication to eradicating human trafficking.”

“These defendants exploited vulnerable victims, forcing them to work in their businesses, failing to pay wages, and depriving them of basic human rights,” said U.S. Attorney Talbert. “Now they have been sentenced to years in prison and have paid hundreds of thousands of dollars in restitution to their victims. The U.S. Attorney’s Office continues its commitment to protect and defend vulnerable members of our society from human trafficking, and we appreciate the partnerships we have with the Civil Rights Division and the FBI that led to the result in this case.”

“We hope today’s sentencing will offer the victims confidence as they continue to reclaim their lives,” said Special Agent in Charge Sean Ragan for the FBI Sacramento Field Division. “Forced labor, a form of human trafficking, is of significant concern for the FBI, but is difficult to identify and investigate without cooperation of fearful victims who believe escape is not an option because of the lies they have been told by their exploiters. This case highlights how such crimes may occur in public view at a legitimate business yet go unnoticed. The FBI is deeply commitment to seeking justice for all victims of human trafficking — regardless of immigration status or background — to ensure victims receive the care and support they need to break free from their exploiters.”

This case is the product of an investigation by the FBI. Assistant U.S. Attorneys Katherine T. Lydon and Audrey Hemesath for the Eastern District of California, and Trial Attorney Avner Shapiro of the Civil Rights Division prosecuted the case.

Source: United States Department of Justice Criminal Division

Five members and associates of a violent white supremacist gang, the 1488s, were convicted today in Alaska by a federal jury of RICO conspiracy, murder in aid of racketeering, kidnapping, and assault.   

Evidence presented at trial showed that the 1488s are a violent prison-based gang operating inside and outside of state prisons throughout Alaska. The 1488s use Nazi-derived symbols to identify themselves and their affiliation with the gang, including a 1488 “patch” tattoo which depicts an Iron Cross superimposed over a swastika. The tattoo can only be worn by “made” members who generally gained full membership by committing acts of violence on behalf of the gang. The gang has written rules and a code of conduct, including the creed that “the only currency we recognize is violence and unquestionable loyalty.” 

Evidence presented at trial showed that Filthy Fuhrer, formerly known as Timothy Lobdell, 45, founded and led the 1488 gang from inside Alaska’s maximum-security prison, where he is serving a 19-year sentence for the attempted murder of an Alaska State Trooper. Fuhrer ordered members of the gang to commit violent kidnappings and assaults in the “free world” outside of prison. Trying to impose greater organization and structure with non-incarcerated members, Fuhrer believed that some members were defying the 1488 code of conduct and diminishing the power and influence of the gang. Fuhrer sent out a trusted lieutenant with a list of directives, these directives culminated in the kidnapping and assault of two low-level gang members on April 2, 2017, and July 20, 2017, and the kidnapping, assault, and murder of Michael Staton on Aug. 3, 2017.

According to evidence presented at trial, 1488 members Roy Naughton, aka Thumper, 43; Glen Baldwin, aka Glen Dog, 40; and Colter O’Dell, 29, worked with Craig King, aka Oakie, 56, who was a member of the Hells Angels Motorcycle Club, to kidnap and murder one of the victims, who had previously stolen from both King and the 1488s. King lined a room with plastic, where he and the 1488 defendants beat and tortured the victim. Baldwin and O’Dell then took the victim out to the woods, shot him, and burned his body. O’Dell earned his membership patch into the 1488s by committing the murder of Staton.

“The guilty verdicts today strike a significant blow to the highest levels of the 1488 gang,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “The Department of Justice and our law enforcement partners remain committed to combating and dismantling violent white supremacist gangs.” 

“Violent gangs, especially those based upon racial hatred, are a plague to our society,” said U.S. Attorney S. Lane Tucker for the District of Alaska. “As this case demonstrates, the crimes of organized prison gangs often go beyond the prison walls bringing violence into our communities. Today’s convictions are a major disruption to the operation of the 1488 prison gang and hold accountable those who order or commit brutal and heinous crimes. We will continue to work closely with our law enforcement partners to identify, investigate and prosecute violent gang crimes regardless of where they take place. There is no higher priority than keeping our communities and the citizens of Alaska safe.”

“Today’s verdict demonstrates the FBI’s commitment to investigating and dismantling violent gangs, regardless of where they are being operated and who is leading them,” said FBI Assistant Director Luis Quesada of the Criminal Investigative Division. “In collaboration with our federal, state, local and international partners, we will aggressively target and pursue violent offenders. This verdict sends a clear signal to others who engage in gang violence that we will hold them accountable and bring them to justice.”

“The inhumanity shown by members of the 1488 criminal enterprise, to include the kidnapping, torture, and murder of Michael Staton, is a gruesome example of why we must identify and dismantle violent criminal organizations,” said Special Agent in Charge Antony Jung of the FBI Anchorage Field Office. “The morally despicable extremist prison gang has been seriously undermined thanks to the robust and effective, coordinated law enforcement and prosecution efforts shown throughout this case. These convictions will certainly make our community a safer place.”

Fuhrer was convicted of racketeering conspiracy, conspiracy in aid of racketeering, murder in aid of racketeering, kidnapping resulting in death, three counts of kidnapping conspiracy, two counts of kidnapping and two counts of assault in aid of racketeering. Naughton was convicted of racketeering conspiracy, conspiracy in aid of racketeering, murder in aid of racketeering, kidnapping resulting in death, three counts of kidnapping conspiracy, two counts of kidnapping and two counts of assault in aid of racketeering. Baldwin, O’Dell, and King were convicted of racketeering conspiracy, conspiracy in aid of racketeering, murder in aid of racketeering, kidnapping resulting in death, and kidnapping conspiracy. All five defendants face a mandatory sentence of life in prison without parole for the murder.

The FBI’s Safe Streets Task Force and the Alaska State Troopers, Alaska Bureau of Investigation, investigated the case in conjunction with the U.S. Attorney’s Office for the District of Alaska and the Criminal Division’s Organized Crime and Gang Section (OCGS). Investigative assistance was provided by the IRS Criminal Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Postal Inspection Service, the U.S. Marshals Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Anchorage Police Department (APD), and the State of Alaska’s Department of Corrections.

Trial Attorney Jeremy Franker of the Criminal Division’s OCGS and Assistant U.S. Attorneys William Taylor, James Klugman and Chris Schroeder are prosecuting the case.