Month: December 2024

Source: United States Department of Justice Criminal Division

The Justice Department, together with the Federal Trade Commission (FTC), today announced a civil enforcement action against Dave Inc. (Dave) and its co-founder, President, Chief Executive Officer and Chairman of the Board of Directors, Jason Wilk, for alleged violations of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).

Dave is a financial technology company that offers consumers short-term cash advances through its mobile app. The government’s lawsuit alleges that the defendants misled consumers by deceptively advertising Dave’s cash advances, charging hidden fees, misrepresenting how Dave uses customers’ tips and charging recurring monthly fees without providing a simple mechanism to cancel them.

According to a complaint filed in the U.S. District Court for the Central District of California, Dave and Wilk market their app as instantly providing consumers “up to $500” without any hidden fees. The complaint alleges that the defendants actually very rarely offer consumers anywhere near the advertised $500, often do not offer any cash advance at all, and charge an “express fee” to get cash advances instantly that they do not clearly disclose before consumers give the app access to their bank accounts. The lawsuit further alleges that the defendants induce app users to pay a sizeable “tip” on Dave’s cash advances by using a deceptive interface that does not offer a clear way to avoid tipping. According to the complaint, Dave’s app falsely represents to consumers that the company will purchase or pay for a certain number of meals for needy children based on the size of a customer’s tip, while in reality Dave keeps the vast majority of tips for itself and donates only a nominal sum to charity that is insufficient to purchase the stated number of meals. Finally, the complaint alleges that the defendants have violated ROSCA by enrolling their customers in automatically recurring monthly membership fees without clearly and conspicuously disclosing material transaction terms and without providing a simple mechanism for consumers to cancel those recurring fees.

This complaint, filed by the Justice Department, seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants and a permanent injunction to prohibit them from engaging in future violations. It amends and replaces an earlier complaint that FTC filed, which named only Dave as a defendant and did not seek any civil penalties.

“The Justice Department is committed to stopping companies and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees and subscriptions that are difficult to cancel,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to enforce the FTC Act, ROSCA and other statutes that protect consumers from such misconduct.”

Senior Trial Attorney Sarah Williams, Trial Attorneys Sean Z. Saper and John F. Schifalacqua and Assistant Director Zachary A. Dietert of the Civil Division’s Consumer Protection Branch are handling the case, in coordination with staff at the FTC’s Bureau of Consumer Protection.

For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

Source: United States Department of Justice Criminal Division

The Justice Department announced today that the Madoff Victim Fund (MVF) began its 10th and final distribution of over $131.4 million to victims of the Bernard L. Madoff fraud scheme. These funds were forfeited by the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme.

In this distribution, payments will be sent to more than 23,000 victims across the globe. With this 10th distribution, over 40,000 victims in the Madoff scheme will have recovered 93.71% of their fraud losses. Most of these victims were small investors who lost less than $500,000 in the fraud. Through its 10 distributions, MVF has paid over $4.3 billion from forfeited funds to 40,930 victims in 127 countries for losses they suffered from the collapse of BLMIS.

“The Criminal Division, through its Money Laundering and Asset Recovery Section (MLARS), is proud to administer the department’s remission program to compensate victims using forfeited assets,” said Principal Deputy Assistant Attorney General Brent S. Wible, head of the Justice Department’s Criminal Division. “The unprecedented scope and complexity of the Madoff remission process shows the power of forfeiture to recover assets and to compensate victims — a primary goal of the department’s Asset Forfeiture Program. This 10th and final distribution, led by MLARS’ dedicated victim compensation team, achieves the department’s goal of compensating victims by returning over $4 billion in forfeited assets to more than 40,000 victims of Madoff’s crimes and achieving nearly full recovery for these victims.”

“This office has never stopped at pursuing justice for victims of history’s largest Ponzi scheme,” said Acting U.S. Attorney Edward Y. Kim for the Southern District of New York. “With this 10th and final distribution, we have succeeded in compensating 40,930 victims with close to 94% of their losses. As this extraordinary effort demonstrates, this office and MLARS are committed to protecting and assisting victims of crime, no matter how long it takes and no matter how complicated the endeavor.”

“Today’s distribution represents an unprecedented conclusion of victim compensation from civil forfeiture actions related to the Madoff scheme with more than $4 billion repaid to over 40,000 victims,” said Assistant Director in Charge James E. Dennehy of the FBI New York Field Office. “These victims implicitly trusted Madoff with their investments only to ultimately lose significant monies to his selfish plan. With the Justice Department’s steadfast support, the FBI will continue its tireless seizure of assets from criminals who steal from others and seek to recover those assets for victim losses.” 

This 10th and final distribution represents the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions to provide compensation to eligible victims.

According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle.

On June 29, 2009, Madoff was sentenced to 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff, and their co-conspirators.

Compensation from the MVF is possible due to the extraordinary efforts of MLARS, which administers the forfeiture victim compensation program; the U.S. Attorney’s Office for the Southern District of New York; and the FBI, which led the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case.

The MVF is overseen by Richard Breeden, former Chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Justice Department to assist in connection with the victim remission proceedings. Mr. Breeden and his team at MVF have been essential in working with the department to evaluate over 66,000 remission petitions involving billions in cash flows, and to compute each victim’s fraud losses to enable payments to be made.

More information about MVF and its compensation to victims of BLMIS is available at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or info@madoffvictimfund.com.

Returning assets to victims of crime is a primary goal of the department’s Asset Forfeiture Program. Since 2000, the victim compensation program has returned more than $12 billion in forfeited assets to victims. MLARS, through its Program Management and Training Unit, coordinates with U.S. Attorneys’ Offices, federal law enforcement and regulatory agencies, and private parties to ensure consistent and efficient return of forfeited assets to victims.

Source: United States Department of Justice

View All Environmental Crimes Bulletins

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In This Issue:

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Cases by District/Circuit

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District/Circuit	Case Name	Statute(s)
Central District of California	United States v. Phillips 66 Company	Wastewater Discharge/Clean Water Act
Eastern District of California	United States v. Jorge Calderon-Campos, et al.	Cock Fighting/Animal Welfare Act, Drugs
Southern District of California	United States v. Alejandro Cornejo	Refrigerant Smuggling/ American Innovation and Manufacturing Act, Conspiracy
Southern District of Florida	United States v. Royce Gillham	Biofuel Fraud/Conspiracy, False Claims
Middle District of Georgia	United States v. Christopher Beaumont, et al.	Dog Fighting/Animal Welfare Act, Conspiracy
	United States v. Fredricus White, et al.
District of Maine	United States v. Isaac Allen	Tampering with a Monitoring Device/Clean Air Act
District of Maryland	United States v. Idrissa Bagayoko	FIFRA, Fed Insecticide, Fungicide, Rodent
District of Massachusetts	United States v. John Murphy	Dog Fighting/Animal Welfare Act, Conspiracy
Southern District of Mississippi	United States v. Mary Mahoney’s Old French House, et al.	Seafood Mislabeling/ Conspiracy, Misbranding Seafood, Wire Fraud
District of Montana	United States v. Mold Wranglers, et al.	Lead Paint Abatement/False Claims Act/Toxic Substances Control Act, Knowing Endangerment
	United States v. David J. Dilley, et al.	Hybrid Sheep Cloning/Lacey Act
	United States v. Melanie Ann Carlin	Lead Paint Disclosures/Toxic Substances Control Act
Eastern District of New York	United States v. Bryan Gosman, et al.	Fish Trafficking/Conspiracy, Mail Fraud, Obstruction
Eastern District of North Carolina	United States v. Darien V. Wright	Emissions Inspections/Clean Air Act, Conspiracy
District of Oregon	United States v. Chamness Dirt Works, et al.	Asbestos Abatement/Clean Air Act
Eastern District of Pennsylvania	United States v. Khalil King, et al.	Misbranded Pesticide and Animal Drug Sales/ Federal Insecticide, Fungicide, and Rodenticide Act; Food, Drug and Cosmetic Act
District of Puerto Rico	United States v. Saul Enrique Jose De La Cruz, et al.	Eel Smuggling/Lacey Act, Smuggling
Western District of Texas	United States v. Don Rasmus Church	Wildlife Trafficking/ Conspiracy, Lacey Act, Smuggling
Eastern District of Washington	United States v. John Wesley Owens, et al.	Emissions Defeat Device Imports/Clean Air Act, Conspiracy, Smuggling
Western District of Washington	United States v. Tracy Coiteux, et al.	Tampering with a Monitoring Device/Clean Air Act
	United States v. Jonathan Achtemeier

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Announcements

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On November 13, 2024, the Environmental Crimes Policy Committee selected ECS Senior Trial Attorney Banu Rangarajan as this year’s recipient of the prestigious Raymond W. Mushal Award for Outstanding Contribution to Federal Environmental Criminal Law Enforcement.

Banu is currently a Senior Trial Attorney with the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division (ENRD). For twenty-three years prior to joining ECS, Banu was an Assistant United States Attorney and Senior Litigation Counsel with the U.S. Attorney’s Office for the Eastern District of North Carolina and a Trial Attorney with ENRD’s Environmental Defense Section. Banu has served as a selfless mentor and team-oriented colleague in every office she has worked in.

During her 30 years spent pursuing environmental criminals, Banu has made substantial and lasting contributions in the field of environmental prosecution that shall endure and leave an indelible legacy.

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Trials

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United States v. Idrissa Bagayoko

• No. 1:23-CR-00265 (District of Maryland)
• AUSA Kimberly Phillips
• RCEC Kertisha Dixon
• RCEC David Lastra

On November 22, 2024, a jury convicted Idrissa Bagayoko on two counts for transporting and selling the unregistered pesticide known as Sniper DDVP. Specifically, the jury found Bagayoko guilty of violating the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Hazardous Material Transportation Act (HMTA) (7 U.S.C. §§ 136j(a)(1) (A), 136l(b)(1)(B); 49 U.S.C. § 5124).

Bagayoko owned and operated Maliba Trading, LLC. According to evidence presented at trial, on September 29, 2021, Bagayoko drove from New York to Maryland and sold two boxes of the unregistered pesticide Sniper DDVP to an individual in Maryland. Police later stopped Bagayoko in Elkton, Maryland, with 18 additional boxes of Sniper DDVP, with a total of 1,728 bottles.

Subsequent lab tests revealed the presence of dichlorvos in samples taken from the bottles. EPA has classified dichlorvos as a probable human carcinogen. The defendant transported more than 330 pounds of dichlorvos (a reportable quantity) without requisite shipping papers.

The U.S. Environmental Protection Agency Criminal Investigation Division, the U.S. Department of Transportation Office of Inspector General, and the Elkton Maryland Police Department conducted the investigation.

Related Press Release: https://www.justice.gov/usao-md/pr/new-york-business-owner-convicted-illegal-transport-and-sale-unregistered-pesticides

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Indictments

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United States v. John Wesley Owens, et al.

• No. 2:24-CR-00140 (Eastern District of Washington)
• AUSA Jacob Brooks
• AUSA Dan Fruchter
• RCEC Gwendolyn Russell

On November 7, 2024, prosecutors charged multiple defendants for smuggling and illegally importing millions of dollars’ worth of emissions defeat devices from Canada into the United States.

John Wesley Owens and Joshua Wesley Owens own Diesel Truck Products, Inc., d/b/a DPF Delete Shop, Inc., and Fulfillment Solutions & More, LLC. Kevin Paul Dodd owns Evolution Auto Performance and Evo Tunes Inc. Philip John Sweeney owns KX Wheels. The defendants participated in a scheme to smuggle and illegally import tens of millions of dollars in contraband emissions defeat devices from Canada into the United States and to sell and distribute them throughout the United States in violation of the Clean Air Act (CAA) (18 U.S.C. §§ 371, 545; 42 U.S.C § 4213(c)(2)(C)). Prosecutors further charged both Owenses and their companies with money laundering (18 U.S.C. § 1956(h)).

The CAA requires diesel trucks to maintain systems and components that limit harmful emissions. The CAA also requires heavy-duty diesel trucks to maintain an onboard diagnostic system which monitors the functionality of the hardware emissions control components. To ensure that the required emissions control systems are functioning properly, if the system detects that an emissions control component is not working or has been removed, it will put the truck into “limp mode,” which can limit the top speed to as low as 5 miles per hour. Hardware and software designed to disable these emissions controls, commonly known as defeat devices, can greatly increase dangerous emissions, particularly impacting communities that are close to major roads.

Between December 2015 and November 2023, the Owenses purchased more than $33 million dollars in illegal emissions defeat devices from Dodd, Sweeney, and their companies. Dodd, Sweeney, and the Owenses smuggled and illegally imported these emissions defeat devices from Canada into Eastern Washington and then sold and distributed them to customers throughout the United States.

During the summer of 2020, after receiving information requests from the Environmental Protection Agency, the Owenses decided to shut down their business website and re-launch under a new name. In May 2020, Joshua Owens sent an email to Dodd and said, “In June I’m winding down this ‘legal entity’ and starting up another one. Feels like I’m on borrowed time with the EPA.”

In July 2020, Joshua Owens launched a new website and new business named “DPF Delete Shop, Inc.,” listing a business address in the Cayman Islands. He continued to use this website to import, sell, and distribute defeat devices, despite repeated warnings that tampering with a monitoring device or method required under the CAA was illegal.

Owens and Sweeney conspired to disguise the shipments of illegal emission control devices from Canada into Eastern Washington. Between 2017 and 2023, the Owens and their businesses received more than $74 million in revenue through their online sales of emissions defeat devices to customers in the United States.

The U.S. Environmental Protection Agency Criminal Investigation Division, the Federal Bureau of Investigation, and the Internal Revenue Service conducted the investigation.

Related Press Release: Four business owners indicted for smuggling and illegally importing tens of millions of dollars in emissions defeat devices from Canada into Eastern Washington | Internal Revenue Service

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United States v. Chamness Dirt Works, et al.

• No. 3:24-CR-00430 (District of Oregon)
• AUSA Bryan Chinwuba
• RCEC Karla Perrin

On November 19, 2024, prosecutors filed an information charging Horseshoe Grove, LLC, and Chamness Dirt Works with knowingly violating the Clean Air Act National Emission Standards for Hazardous Air Pollutants (asbestos work practice standards) (42 U.S.C. §§ 7412(h),7413(c)(1)).  Prosecutors also charged Horseshoe Grove owner Ryan Richter and Chamness Dirt Works owner Ronald Chamness with CAA negligent endangerment (42 U.S.C. § 7413(c)(4)).

On November 10, 2022, Horseshoe Grove acquired a property in The Dalles, Oregon, which included a mobile home park and two dilapidated apartment buildings.

The previous owner provided the new buyers with an asbestos survey from December 2021, which identified more than 5,000 square feet of friable Chrysotile asbestos within the two deteriorating buildings, with levels ranging from 2% to 25%. The survey also noted non-friable asbestos in various building materials, including siding and flooring, throughout the apartments. Despite these findings, Horseshoe Grove failed to implement the necessary precautions for asbestos removal.

In March 2023, Chamness Dirt Works began demolishing the two asbestos-laden structures without following proper removal procedures. Chamness did not engage a certified asbestos abatement contractor, did not wet the asbestos-containing debris, and dumped the material in a regular landfill.

Horseshoe Grove paid Chamness Dirt Works a total of $49,330 for the demolition, which did not meet the required safety standards.

The U.S. Environmental Protection Agency Criminal Investigation conducted the investigation.

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United States v. Phillips 66 Company

• No. 2:24-CR-00699 (Central District of California)
• AUSA Dennis Mitchell
• AUSA Juan Rodriguez

On November 20, 2024, a grand jury returned a six-count indictment charging Phillips 66 Company (Phillips), a Houston-based energy business, with violating the Clean Water Act for illegally discharging hundreds of thousands of gallons of industrial wastewater from its Carson oil refinery into the Los Angeles County sewer system then failing to report the violations (33 U.S.C. §§ 1317(d) 1319(c)(1)(A), (c)(2)(A)).

Phillips operates oil and refinery facilities in the Los Angeles County area and discharges its wastewater into the publicly owned treatment works (POTW) operated by the Los Angeles County Sanitation District (LACSD). On November 24, 2020, Phillips’s Carson refinery discharged industrial wastewater to the POTW with a concentration of oil and grease more than 300 times the permitted level. Personnel at the Carson facility failed to inform LACSD of this discharge, which occurred over a two-and-a-half-hour period.

Authorities estimated that Phillips discharged more than 310,000 gallons, containing approximately 64,000 pounds of oil and grease, into the LACSD’s sewer system.

In December 2020, LACSD issued Phillips multiple notices of violation (NOVs) for discharging industrial wastewater containing an excessive concentration of oil and grease, failing to inform the LACSD about this discharge, and for adversely affecting the POTW. The following month, a Phillips manager responded to LACSD, acknowledging the facility’s non-compliance and noted that the company would “retrain operations personnel” on proper procedure.

On February 8, 2021, the Carson facility discharged approximately 480,000 gallons of non-compliant industrial wastewater, which contained at least 33,700 pounds of oil and grease, into the POTW over a five-and-a-half-hour period.

In March 2021, LACSD issued new NOVs, and, once again, Phillips management acknowledged its non-compliant behavior. A manager also informed the LACSD that maintenance was ongoing on industrial wastewater pretreatment equipment, namely, an API Separator, to increase its effectiveness in skimming oil.

The United States Environmental Protection Agency Criminal Investigation Division conducted the investigation.

Related Press Release: https://www.justice.gov/usao-cdca/pr/texas-based-oil-and-gas-company-phillips-66-indicted-alleged-violations-clean-water

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Guilty Pleas

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United States v. Mold Wranglers, et al., 

• No. 6:24-CR-00025 (District of Montana)
• AUSA Ryan Weldon

On November 5, 2024, Mold Wranglers, Inc., a Kalispell-based hazardous material mitigation company, pleaded guilty to a False Claims Act conspiracy for filing false claims with the U.S. Department of Veterans Affairs (VA) for lead paint abatement work that was never performed (18 U.S.C. § 286). Sentencing is scheduled for March 4, 2025.

Between 2018 and 2019, Mold Wranglers claimed it performed lead abatement work at the Freedom’s Path Fort Harrison facility. The project consisted of converting residential units for low-income veterans and their families. Mold Wranglers submitted documentation to the VA for work including painting over lead-based paint with encapsulating paint. However, the company failed to comply with federal regulations governing lead work, as its employees were not certified to handle lead, and it did not notify the Environmental Protection Agency (EPA) of the work as required.

Additionally, Mold Wranglers applied the encapsulating paint in a manner inconsistent with the manufacturer’s specifications.

The agreement the company made with the VA specified it was NOT performing an actual abatement but merely “aesthetically repairing the paint and finishing the homes.” Despite this agreement, the company submitted 11 false payment requests, claiming to have performed lead abatement work, and received a total of $456,000 in federal funds for work that did not meet the necessary standards for lead abatement.

The U.S. Environmental Protection Agency Criminal Investigation Division and Office of Inspector General, The Department of Veterans Affairs, and the Department of Housing and Urban Development conducted the investigation.

Related Press Release: District of Montana | Kalispell company admits filing false claims for payment to federal agency claiming an abatement of lead paint in veterans housing at Fort Harrison | United States Department of Justice

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United States v. Royce Gillham

• No. 2:24-CR-14046 (Southern District of Florida)
• ECS Senior Trial Attorney Adam Cullman
• AUSA Daniel Funk

On November 7, 2024, Royce Gillham, the former General Manager of a biofuel producer based in Fort. Pierce, Florida, pleaded guilty to conspiring to commit wire fraud and conspiring to make false claims (18 U.S.C.§ 371). Sentencing is scheduled for February 27, 2025.

This biofuel company produced and sold renewable fuel and fuel credits and claimed to turn various feedstocks into biodiesel. When reporting the number of gallons produced to the Internal Revenue Service and the Environmental Protection Agency (EPA), Gillham and his employer vastly overstated their production volume in an effort to generate more credits. When auditors sought more information from the company, Gillham and his co-conspirators gave them false information about their fuel production and customers.

The scheme generated more than $7 million in fraudulent EPA renewable fuels credits and sought over $6 million in fraudulent tax credits connected to the purported production of biodiesel.

The U.S. Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service Criminal Investigations conducted the investigation.

Related Press Release: Southern District of Florida | Florida Man Pleads Guilty to Biofuel Fraud Conspiracy | United States Department of Justice

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United States v. Christopher Beaumont, et al.

• No. 1:24-CR-00005 (Middle District of Georgia),
• ECS Senior Trial Attorney Ethan Eddy

On November 13, 2024, Christopher Beaumont pleaded guilty for his role in a large-scale dog fight event that was disrupted while in progress on April 24, 2022, in Donalsonville, Georgia. Beaumont pleaded guilty to conspiracy, possessing and transporting a dog for animal fighting purposes, and sponsoring and exhibiting (fighting) a dog at the event (18 U.S.C. § 371; 7 U.S.C. § 2156(a)(1)). Cornelious Johnson pleaded guilty to the same charges.

Prosecutors charged more the 14 defendants who traveled to this event from across southwest Georgia, Alabama, and Florida to fight their dogs. Agents recovered 27 dogs, including 22 that were found in cars on the scene and had either already been fought, or whose handlers were awaiting their turn in the pit. Agents found one dog still in the fighting pit who later succumbed to his injuries, as well as others living on the property.

The U.S. Department of Agriculture and Seminole County, Georgia, Sheriff’s Office conducted the investigation.

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United States v. Khalil King, et al.

• No. 2:23-CR-00177 (Eastern District of Pennsylvania)
• AUSA Christopher Parisi

On November 15, 2024, Bien King and Khalil King pleaded guilty to violating the Federal Insecticide, Fungicide, and Rodenticide Act for selling a misbranded pesticide and for violating the Food, Drug, and Cosmetic Act for selling misbranded animal drugs (7 U.S.C. §§ 136j(a)(1)(E); 21 U.S.C. § 331(a)). Sentencing is scheduled for March 5, 2025.

Bien King created “Little City Dogs” (LCD) a New York corporation with office space in New York City. Bien King also created a website that sold various products intended to treat diseases or pests in animals.

Bien King’s son, Khalil, worked in the New York office. Khalil King was responsible for mixing ingredients and packaging various products for shipment. The defendants obtained the ingredients for these products from various suppliers in China. They knew that these suppliers routinely mislabeled shipments of these products to avoid detection by customs officials.

When LCD received orders from online sales, Khalil King and others routinely shipped the products from the New York office to customers throughout the United States. An undercover agent placed several orders for various products through the LCD website. These purchases included a January 17, 2020, order for fipronil drops and ivermectin. Fipronil is designed to treat external parasites such as fleas and ticks. Ivermectin is designed to control heartworms in dogs and cats.

The defendants shipped the fipronil drops and ivermectin from New York to an address in Springfield, Pennsylvania. The labeling and packaging material accompanying the fipronil drops did not include information required by law. The labeling and packaging material accompanying the ivermectin likewise did not include required information. Furthermore, Little City Dogs’ facility in New York City was not registered with Health and Human Services.

The U.S. Environmental Protection Agency Criminal Investigation Division and the U.S. Food and Drug Administration Office of Criminal Investigations conducted the investigation.

Related Press Release: https://www.justice.gov/usao-edpa/pr/nyc-mother-and-son-charged-interstate-shipment-misbranded-animal-drugs

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United States v. Jonathan Achtemeier

• No. 3:24-CR-05072 (Western District of Washington)
• AUSA Seth Wilkinson
• AUSA Lauren Staniar
• SAUSA Karla Perrin

On November 20, 2024, Jonathan Achtemeier pleaded guilty to conspiracy to violate the Clean Air Act (CAA) for his role in tampering with required monitoring devices on diesel trucks (18 U.S.C. § 371). Achtemeier admitted to modifying the software on hundreds of trucks nationwide between 2019 and 2022 to prevent the monitoring devices from detecting the removal of emissions controls. Achtemeier conspired with mechanics and truck fleet operators, instructing them on how to remove or disable anti-pollution hardware on diesel trucks, a process known as “deleting.” Achtemeier tampered with the monitoring device on his clients’ trucks by connecting laptops to the trucks’ onboard computers and remotely “tuning” the vehicle’s computer, which rendered required monitoring devices inaccurate. This allowed the trucks to run without functioning emissions control systems and resulted in the trucks emitting significantly more pollution than legally allowed.

Achtemeier charged as much at $4,500 per truck for work that often took him two hours or less. Achtemeier advertised his services on social media nationwide, doing business as Voided Warranty Tuning or Optimized Ag. Between 2019 and 2022 his company took in more than $4.3 million in gross profits.

Tampering with required monitoring devices is a felony violation of the CAA, and tampered pick-up trucks emit 30 to 1,200 times more pollution than legally allowed. The vehicles, ranging from pickup trucks to semi-trucks, were serviced by co-conspirators across Washington State and elsewhere.

The Environmental Protection Agency Criminal Investigation Division conducted the investigation. 

Related Press Release: Western District of Washington | New Jersey man pleads guilty to nationwide conspiracy to violate the Clean Air Act by remotely disabling pollution control devices on diesel trucks | United States Department of Justice

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United States v. Isaac Allen

• No. 2:24-CR-00125 (District of Maine)
• AUSA David Joyce

On November 20, 2024, Isaac Allen, the owner of a diesel repair shop called Red Barn Diesel Performance in Windham, Maine, pleaded guilty to conspiracy to tamper with Clean Air Act (CAA) monitoring devices and obstructing an agency proceeding (18 U.S.C. §§ 371, 1505; 42 U.S.C. § 7413(c)(2)(C)).

Between January 2017 and September 2020, Allen conspired with a local truck sales business to reprogram the on-board diagnostic (OBD) systems of diesel trucks by downloading software, or “tunes,” which disabled the systems’ ability to detect emissions control malfunctions.

Disabling emissions controls or tampering with the OBD system of a diesel truck causes its emissions to increase significantly.

In June 2022, the U.S. Environmental Protection Agency issued Allen a CAA Information Request, seeking details on the vehicles serviced by Red Barn, including the impact of the engine tunes on emissions systems and OBD functions. Allen underreported the number of vehicles affected.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation with support from the Maine State Police.

Related Press Release: District of Maine | Owner of Red Barn Diesel Performance Pleads Guilty to Conspiring to Tamper with Clean Air Act Monitoring Devices on Diesel Trucks | United States Department of Justice

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United States v. Melanie Ann Carlin

• No. 6:24-CR-00024 (District of Montana)
• AUSA Ryan Weldon

On November 21, 2024, Melanie Ann Carlin pleaded guilty to violating the knowing endangerment provision of the Toxic Substances Control Act for failing to provide required lead-based paint disclosures to veterans residing at Freedom’s Path Fort Harrison in Helena, Montana (15 U.S.C. § 2615(b)(2)(A)). Carlin’s actions led to the exposure of veterans and their families to dangerous levels of lead, a hazardous substance known to cause serious health issues, particularly for children. Sentencing is scheduled for March 4, 2025.

Carlin owns a property management company called 406 Properties, Inc. She was responsible for overseeing rental units at Freedom’s Path, a housing facility with units built prior to 1978. The facility provided affordable homes for veterans and their families. Between September 2019 and September 2021, Carlin knowingly failed to provide mandated lead disclosures.  Carlin knew that the property was built before 1978, which meant that the presence of lead paint was likely.

In 2019, after receiving an email from the Montana Department of Commerce about lead paint concerns, Carlin signed and submitted forms for the units, falsely indicating that they were either free of lead paint or built after 1978. Despite having first-hand knowledge that lead paint was present in the buildings, Carlin continued to neglect her duty to disclose this information to tenants.

In September 2021, an 18-month-old child living in one of the units ingested lead paint chips. Subsequent medical tests revealed the child had dangerously high blood lead levels and required lead poisoning treatment. Carlin admitted to agents that she knew about the lead paint disclosure requirement but failed to give residents the required notice. Carlin’s failure to act placed veterans and their families at imminent risk of serious harm.

The U.S. Environmental Protection Agency Criminal Investigation Division the Office of Inspector General, The Department of Veterans Affairs, and the Department of Housing and Urban Development conducted the investigation.

Related Press Release: Real Estate Agent Pleads Guilty to Knowing Endangerment for Failing to Provide Lead-Based Paint Disclosures for Veterans Housing | Office of Inspector General OIG

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United States v. Fredricus White, et al.

• No. 1:24-CR-00005 (Middle District of Georga)
• ECS Senior Trial Attorney Ethan Eddy
• ECS Law Clerk Amanda Backer

On November 22, 2024, Fredricus White, Brandon Baker, Rodrecus Kimble, Tamichael Elijah, Timothy Freeman, Gary Hopkins and Marvin Pulley entered guilty pleas for their roles in a large-scale dog fighting event that was disrupted while in progress on April 24, 2022, in Donalsonville, Georgia. White and Baker pleaded guilty to conspiracy and to possessing and transporting a dog for animal fighting purposes. Freeman pleaded guilty to being a spectator at the event, and Kimble, Elijah, Hopkins, and Pulley pleaded guilty to conspiracy (18 U.S.C. §§ 371, 49; 7 U.S.C. § 2156).

Prosecutors charged a total of 14 defendants who traveled to this event from across southwest Georgia, Alabama, and Florida to fight their dogs. Agents recovered 27 dogs, including 22 who were found in cars on the scene and had either already been fought, or whose handlers were awaiting their turn in the pit. Agents found one dog still in the fighting pit who later succumbed to his injuries, as well as others living on the property.

The U.S. Department of Agriculture and the Seminole County, Georgia, Sheriff’s Office conducted the investigation.

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Sentencings

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United States v. Jorge Calderon-Campos, et al.

• No. 1:22-CR-00131 (Eastern District of California)
• AUSA Karen Escobar.

On November 4, 2024, a court sentenced Jorge Calderon-Campos to eight years and one month of incarceration for his involvement in a drug distribution operation in Bakersfield, California, and for unlawfully possessing animals for the purpose of cockfighting. Calderon-Campos pleaded guilty to conspiracy to distribute methamphetamine and heroin and to violating the Animal Welfare Act (21 U.S.C. §§ 841 (a)(1), (b)(1)(A)); 7 U.S.C. § 2156(b); 18 U.S.C. § 49(a)). Calderon-Campos is one of seven people charged in this drug and animal fighting venture investigation.

On March 30, 2021, Calderon-Campos (who calls himself “Americano”) supplied 26 pounds of methamphetamine to co-defendants Mark Garcia and Alberto Gomez-Santiago. Between January and April 2022, Calderon-Campos also possessed roosters he used to participate in an animal fighting venture. During a search of his residence on April 26, 2022, law enforcement officers found numerous hens and roosters, various cockfighting implements (including razors and spurs) and six cockfighting trophies, including several with plates inscribed with “Team Amkno” (shorthand for “Team Americano”). At Calderon-Campos’s “stash house,” law enforcement officers found 14 hens and 77 roosters, cockfighting leashes, a cockfighting trophy, and a variety of syringes and pill bottles containing substances related to cockfighting supplements.

On January 27, 2022, Jose Beltran-Chaidez, at the direction of his brother Antonio Beltran-Chaidez, delivered more than two pounds of heroin to Calderon-Campos to sell. However, when Calderon-Campos was unable to sell the drug, Beltran-Chaidez took it back. A California Highway Patrol officer subsequently stopped Beltran-Chaidez for a traffic violation and found the heroin.

On August 26, 2024, a court sentenced Antonio Beltran-Chaidez to 46 months’ incarceration, followed by 24 months supervised release, after he pleaded guilty to possessing heroin with the intent to distribute (21 U.S.C. § 841(a)(1)). 

Jose Angel Beltran-Chaidez pleaded guilty to possession with intent to distribute heroin and is scheduled for sentencing on February 10, 2025 (21 U.S.C. §§ 841 (a)(1), (b)(1)(A)).

Gomez-Santiago pleaded guilty and was sentenced to four years and nine months in prison. Garcia pleaded guilty and is scheduled for sentencing on February 3, 2025. Byron Adilio Alfaro-Sandoval is scheduled for trial to begin on January 28, 2025.

Homeland Security Investigations and the Drug Enforcement Administration conducted the investigation, with assistance from the U.S. Department of Agriculture Office of Inspector General, the U.S. Marshals Service, the U.S. Customs and Border Protection, the U.S. Secret Service, the Bureau of Land Management, the Kern County High Intensity Drug Trafficking Area Task Force, the California Highway Patrol, the California Department of Corrections and Rehabilitation, the Kern County Sheriff’s Office, the Kern County Probation Department, and the Bakersfield Police Department.

Related Press Release: Eastern District of California | Fifth Member of Bakersfield Drug Ring Sentenced | United States Department of Justice

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United States v. Tracy Coiteux, et al.

• No. 3:21-CR-05184 (Western District of Washington)
• AUSA Seth Wilkinson
• AUSA Cindy Chang
• RCEC Karla Gebel Perrin

On November 5, 2024, a court sentenced the owners of two automotive businesses for conspiracy and tampering with a monitoring device or method in violation of the Clean Air Act (CAA). Tracy Coiteux and Sean Coiteux will each pay $10,000 fines, complete four-year terms of probation (to include four months’ home confinement) and perform 60 hours of community service. The two co-owned Racing Performance Maintenance Northwest (known as RPM) and a related sales company called RPM Motors and Sales NW.

A jury convicted Tracy Coiteux in May 2024 following a three-day jury trial on conspiracy and CAA violations; Sean Coiteux and the companies pleaded guilty in March 2024 to violating the CAA (18 U.S.C. § 371; 42 U.S.C. § 7413 (c)(2)(C)). The companies will be sentenced on January 13, 2025.

Between January 2018 and January 2021, the defendants directed employees to delete pollution control hardware on diesel trucks they sold or serviced. They then tampered with the vehicles monitoring devices to prevent detection of the removal of the control equipment. The Coiteux’s companies charged between $1,000 and $2,000 for this work. Over a three-year period, the defendants serviced close to 375 diesel trucks, taking in more than $500,000 for these illegal modifications.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

Related Press Release:  Western District of Washington | Owners of Clark County automotive repair and performance shop sentenced to home confinement, probation for conspiracy and violations of Clean Air Act | United States Department of Justice

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United States v. Darien V. Wright

• No. 5:24-CR-00160 (Eastern District of North Carolina)
• AUSA David Beraka

On November 7, 2024, a court sentenced Darien V. Wright to pay a $40,000 fine and complete a three-year term of probation. The first year of probation will be under home confinement with 15 days of intermittent confinement following home detention. Wright pleaded guilty to conspiring to violate the Clean Air Act (CAA) and to making a CAA false statement for conducting fraudulent inspections of approximately 14,721 vehicles over a five-year period (18 U.S.C. § 371; 42 U.S.C. § 7413(c)(2)(A)).

Wright owned and operated Just Wright Automotive, LLC, a business licensed by the North Carolina Department of Transportation to conduct emissions and safety inspections for vehicles registered in the State of North Carolina. Between January 2018 and August 2023, Wright and others conducted false tests by changing the county of registration associated with motor vehicles from an area of non-obtainment (a county that requires vehicle emissions testing, such as Cumberland County) to a county that does not require vehicle emissions testing, thereby bypassing the required emissions inspections.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

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United States v. David J. Dilley, et al.

• Nos. 4:24-CR-00006, 00084 (District of Montana)
• ECS Senior Trial Attorney Patrick Duggan
• ECS Trial Attorney Sarah Brown
• AUSA Jeff Starnes
• ECS Paralegal Jillian Grubb

On November 7, 2024, a court sentenced David J. Dilley for violating the Lacey Act and the Endangered Species Act (16 U.S.C. §§ 1538(a)(1)(G), 3372(d)(2), 3373(d)(3)(B)). Dilley will pay a $18,750 fine and make a $6,250 community service payment to the National Fish and Wildlife Foundation. He will also complete a three-year term of probation.

Dilley conspired with Jack Schubarth to help him create giant hybrid sheep for captive hunting. Schubarth smuggled Marco Polo argali sheep parts from Kyrgyzstan into the United States. This protected species of sheep, native to high elevations in the Pamir region of Central Asia, is deemed the largest in the world.

In 2013, Schubarth provided the genetic material to a third-party cloning facility, and, in 2016, received successfully cloned pure Marco Polo argali embryos. Schubarth raised a pure male argali clone that he named “Montana Mountain King.” In 2018, Schubarth began breeding Montana Mountain King with other species and selling the offspring, as well as argali semen, throughout the U.S. To evade detection, Schubarth falsely labeled the offspring on Certificates of Veterinary Inspection and other official forms. At the same time, Schubarth solicited Montana hunting guides to provide him with the testicles of recently killed trophy sized native Rocky Mountain bighorn sheep, in violation of Montana law, so that he could use their genetics in his breeding operation and sell the semen in interstate commerce.

In June and July 2020, Dilley facilitated the purchase and interstate transport of twelve hybrid Marco Polo argali sheep from Schubarth, and falsely identified 43 species of sheep on a Certificate of Veterinary Inspection. Dilley falsified these documents knowing these sheep are prohibited in Montana.

Schubarth was sentenced in September 2024 to six months’ incarceration, followed by three years’ supervised release. Schubarth also will pay a $20,000 fine to the Lacey Act Reward Fund and make a $4,000 community service payment to the National Fish and Wildlife Foundation.

The U.S. Fish and Wildlife Service Office of Law Enforcement and the Montana Fish, Wildlife and Parks conducted the investigation.

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United States v. Alejandro Cornejo

• No. 3:24-CR-01523 (Southern District of California)
• ECS Senior Trial Attorney Stephen DaPonte
• AUSA Eric Chaing

On November 8, 2024, a court sentenced Alejandro Cornejo after pleading guilty to a conspiracy charge for attempting to smuggle refrigerant across the southern border (18 U.S.C. § 371). Cornejo will complete a one-year term of probation and pay $14,560 in restitution to VLS Environmental Solutions. He also will forfeit the refrigerant.

On June 24, 2024, Cornejo attempted to cross into the United States from Mexico with eight 25-pound cylinders of 410A refrigerant and four 30-pound cylinders of R22 refrigerant. Prosecutors charged Cornejo with smuggling and violating the American Innovation and Manufacturing Act of 2020, which specifically prohibits importing, selling, distributing, or offering hydrochlorofluorocarbons  for sale without allowances issued by the U.S. Environmental Protection Agency.

The U.S. Environmental Protection Agency Criminal Investigation Division, Homeland Security Investigations, and Customs and Border Protection conducted the investigation.

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United States v. Bryan Gosman, et al.

• No. 2:21-CR-00217 (Eastern District of New York)
• ECS Trial Attorney Christopher Hale
• ECS Senior Trial Attorney Ken Nelson
• ECS Paralegal Samantha Goins
• ECS Paralegal Jonah Fruchtman

On November 12, 2024, a court sentenced Bryan and Asa Gosman to complete two-year terms of probation with restitution ($5,000 to $247,000) to be determined at a later date. The court cited the Gosmans’ “extraordinary cooperation” as the basis for the probation sentence. The court further ordered Christopher Winkler to forfeit $725,000. Winkler was also sentenced to pay restitution in the amount of $725,000, though a portion of that is expected to be joint and several with the Gosmans.

The Gosmans previously pleaded guilty to a mail fraud, obstruction, and fish trafficking conspiracy involving tons of illegal fluke and black sea bass. Winkler, a Long Island fisherman, was sentenced in July 2024 to 30 months’ incarceration, followed by two years of supervised release.

A jury found Winkler guilty on all counts following a three-week trial in October 2023. Winkler was charged with conspiracy, mail fraud, and obstruction of justice (18 U.S.C. §§ 371, 1341, 1519). Winkler, a commercial fisherman and the captain of the F/V New Age, conspired to commit mail fraud, obstruct the National Oceanic and Atmospheric Administration (NOAA) through the falsification of fishing logs, and unlawfully frustrate NOAA’s efforts to regulate federal fisheries by participating in a scheme to illegally overharvest fluke and black sea bass.

On at least 200 fishing trips between 2014 and 2017, Winkler targeted summer flounder (fluke) and black sea bass and harvested those fish in excess of quotas and state trip limits. He also falsified Fishing Vessel Trip Reports (FVTRs) for those trips.

In the related case, Bryan and Asa Gosman and the company they partially own — Bob Gosman Co., Inc. — previously pleaded guilty for their role in the fishing fraud conspiracy. In total, the co-conspirators overharvested approximately 200,000 pounds of fluke and black sea bass, with a conservative wholesale valuation of $750,000. A court sentenced the company in December 2021.

Under federal law, a fishing captain is required to accurately detail his catch on a form known as an FVTR, which is mailed to NOAA. Similarly, the first company that buys fish directly from a fishing vessel, termed a fish dealer, is required to record what it purchases on a federal form known as a dealer report. NOAA relies on this information to set policies designed to ensure a sustainable fishery.

The National Oceanic and Atmospheric Administration Office of Law Enforcement conducted the investigation.

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United States v. Don Rasmus Church

• No. 1:24-CR-00146 (Western District of Texas)
• ECS Trial Attorney Sarah Brown
• ECS Paralegal Jonah Fruchtman

On November 13, 2024, a court sentenced Don Rasmus Church to pay a $5,000 fine to the Lacey Act Reward Fund and to complete a one-year term of probation. Church pleaded guilty to violating the Endangered Species Act for importing protected Australian reptiles into the United States on behalf of a fake zoo that he represented as a legitimate business (16 U.S.C §§ 1538(c), 1540).

Between May 2019 and June 2021, Church imported 165 native Australian reptiles by providing false information to Australian and U.S. authorities. The imported reptiles included three rusty monitor lizards, a species internationally protected under the Convention on International Trade in Endangered Species.

To further this scheme, Church claimed he imported reptiles on behalf of the “Austin Reptile Center,” an entirely fictitious entity. He submitted documents to Australian authorities containing misrepresentations about the facility, including photographs of reptile exhibits, employee names and positions, floor plans, and financial information.

To gain purported legal authority to import the reptiles, Church submitted documentation containing misleading and erroneous information about the fictious Austin Reptile Center to the U.S. Fish and Wildlife Service. He then imported the reptiles on behalf of this “Center,” knowing his actions were unlawful.

The U.S. Fish and Wildlife Service Office of Law Enforcement conducted the investigation.

Related Press Release:  Office of Public Affairs | Texas Man Pleads Guilty to Unlawfully Importing Internationally Protected Reptiles from Australia | United States Department of Justice

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United States v. Mary Mahoney’s Old French House, et al.

• Nos. 24-CR-00045, 00046 (Southern District of Mississippi)
• ECS Senior Trial Attorney Jeremy Korzenik
• AUSA Andrea Jones

On November 18, 2024, a court sentenced Mary Mahoney’s Old French House restaurant (Mahoney’s) to pay a $149,000 fine and $1,350,000 in forfeiture for proceeds it obtained from its fraudulent seafood sales to its customers. The company also will complete a five-year term of probation with the special condition that the company must maintain records for no less than five years describing the species, sources, and the cost of the seafood it acquires for sale to its customers, and must make these records available to any federal, state, or local governmental authority that regulates food for human consumption and/or the harvesting, storage, labeling, or sale of seafood.

Anthony Charles Cvitanovich, restaurant co-owner and manager, will pay a $10,000 fine and complete a three-year term of probation, to include four months’ home detention.

Mahoney’s pleaded guilty to conspiracy to misbrand seafood and wire fraud (18 U.S.C. §§ 371, 1343; 21 U.S.C. §§ 331(k), 333(a)(2)). Cvitanovich pleaded guilty to misbranding seafood (21 U.S.C. §§ 331(k), 333(a)(2)).

Between December 2013 and November 2019, Mahoney and co-conspirators fraudulently sold approximately 58,750 pounds (more than 29 tons) of fish that was frozen and imported from Africa, India, and South America as local premium species. Between 2018 and 2019, Cvitanovich mislabeled approximately 17,190 pounds of fish sold at the restaurant.

The defendants and a wholesale supplier described fish on Mahoney’s menu as premium higher priced local species, such as snapper and grouper from the Gulf of Mexico. However, an investigation, including genetic testing, determined that the fish was of foreign origin, including Lake Victoria perch from Africa, tripletail from Suriname, and unicorn filefish from India.

The U.S. Food and Drug Administration Office of Criminal Investigations conducted the investigation.

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United States v. Saul Enrique Jose De La Cruz, et al.

• No. 3:24-CR-00074 (District of Puerto Rico)
• ECS Senior Trial Attorney Patrick Duggan
• AUSA Seth Erbe

On November 21, 2024, a court sentenced Saul Enrique José De La Cruz to 24 months’ incarceration, followed by two years’ supervised release. Co-defendant Simon De La Cruz Paredes was similarly sentenced on November 14, 2024. The Dominican nationals attempted to smuggle goods from the United States and failed to allow the U.S. Coast Guard to board their vessel. They pleaded guilty to smuggling and Lacey Act trafficking (18 U.S.C. § 554; 16 U.S.C. §§ 3372(a)(1), (a)(4), 3373(d)(1)(B)).

On February 21, 2024, while on patrol, a Customs and Border Protection aircraft detected a suspicious vessel approximately 39 nautical miles north of Arecibo, Puerto Rico. The U.S. Coast Guard responded to interdict the vessel, which was flagless and outfitted for smuggling. Upon approach, Saul Enrique José De La Cruz and Simon De La Cruz Paredes failed to stop the vessel, forcing authorities to shoot out the engines. Following the vessel boarding, officials found 22 plastic bags (each holding approximately 5,000 live juvenile American eels), bottles of oxygen, a handgun, and a backpack full of ammunition.

The men stated that they had caught the eels in Puerto Rico and planned to sell them in the Dominican Republic.

The National Oceanic Atmospheric Administration and the U.S. Fish and Wildlife Service Office of Law Enforcement conducted the investigation, with assistance from the U.S. Coast Guard, Customs and Border Protection, the Puerto Rico Police Bureau Joint Forces of Rapid Action, and the Puerto Rico Department of Natural and Environmental Resources.

Related Press Release: Office of Public Affairs | Two Men Sentenced for Illegally Smuggling Juvenile Eels from Puerto Rico | United States Department of Justice

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